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The Ultimate Forex Trading Course (For Beginners) — Transcript

by Rayner Teo · 27,724 words · 4,443 segments · language en · Watch on YouTube

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0:00hey hey what's up my friends so welcome
0:02to the ultimate forex trading course
0:04for beginners so this is a comprehensive
0:07trading course that will teach you
0:08everything from a to z right to becoming
0:10a proficient forex trader so the cost is
0:12structured in a step-by-step manner so
0:14this is really for you if you have no
0:15forex trading experience or
0:17very little forex trading experience so
0:19the course is structured in such a way
0:20where the
0:21earlier lessons right builds on the last
0:23so you can't just you know
0:24maybe let's say skip to the last section
0:26because it might not make sense to you
0:28especially if you have no forex trading
0:29experience so my suggestion is to go
0:31through this
0:31program step by step as the techniques
0:34the strategies the concepts right
0:35builds on the foundation that you have
0:36learned earlier at the same time some of
0:38you watching this might be
0:40an experienced trader if that's the case
0:42right i will put the timestamps
0:43in the description you can see you know
0:45which part of this training video
0:47might interest you which topic right and
0:49just go to the relevant
0:50section of this video so without further
0:52ado let's get started
0:58so in this section you will learn number
1:00one what is forex trading
1:02who are the biggest players in forex
1:04trading the advantages of forex trading
1:06over the other markets
1:07like stocks and what are the forex
1:09market hours so let's get started
1:11so first and foremost what is forex
1:13trading well forex
1:14stands for foreign exchange in case you
1:16haven't you know realized it yet
1:18it is simply an exchange of one currency
1:20for another
1:21and you might be thinking why do i want
1:23to you know exchange currencies right
1:24now
1:24very simple let's say for example you
1:26want to go on a vacation
1:28and let's say you're in the u.s and you
1:30want to come to singapore for holiday
1:31well guess what
1:32if you bring your us dollars into
1:33singapore and buy a bowl of noodles the
1:35lady will give you the
1:37you know like what you're trying to do
1:38man so clearly right you can't use
1:40us dollars in singapore so what you need
1:42to do is to go to a money changer maybe
1:44in the us
1:44and what you'll do is sell your us
1:46dollars in exchange for singapore
1:48dollars and then you can you know come
1:49to singapore
1:50have a nice holiday have a bowl of
1:51noodles rice and you know have fun
1:53so that's pretty much you know one
1:54example of uh forex trading or
1:57rather you know the exchange of currency
1:58and what the purpose is for
2:00on the other hand for corporations let's
2:02say a company like toyota
2:04who produces car let's say they need to
2:06buy some
2:07rubber for their tires for example okay
2:09and you know
2:10uh you know they in japan right maybe
2:12they are not a producer of rubber and
2:14they need to go to
2:15india to buy some rubber for their cars
2:18so what do toyoto toyota cooperation do
2:20what they do is they will
2:22sell their yen in exchange for indian
2:24rupee so they can use that indian rupee
2:27go to india and buy some rubber for
2:29their tires make sense so that's another
2:31example of
2:32forex trading one is from a retail
2:33perspective and one is from a
2:34corporation
2:35perspective and this is a six point six
2:38trillion dollar market the forex market
2:39is a six point six
2:41trillion dollar market look at the
2:42number of zeros my man it has
2:44more the number of zeros is even more
2:46than the the hair i have on my head so
2:48that's a huge
2:49huge market so who are the players
2:52of forex trading so let me just you know
2:54give you a very simple
2:55chart right to kind of you know break
2:57down who trades the forex market
2:59so you can see over here primarily the
3:00forex markets are traded by you know the
3:02major banks this could be due to you
3:04know hedging their portfolios
3:05feeling they are you know uh meeting
3:06their requirements of their clients
3:09like commercial companies which i'll
3:10explain shortly uh this could
3:12a forex market is also you know traded
3:14by hedge funds for you know speculative
3:16purposes
3:16maybe to hit their portfolios and done
3:19by commercial companies for example like
3:20toyota as i've mentioned earlier
3:22so for example how does commercial
3:23companies and bank work hand in hand so
3:25very simple
3:26so let's say you know a company like
3:27again toyota they know they need
3:29let's say they want to buy rubber from
3:31india they can't use
3:32yen in india because you know the
3:34indians might think you know what is
3:36this piece of paper right am i supposed
3:37to make a paper plane out of this
3:38no so what toyota will do is they might
3:40go to a bank and say hey i need to
3:42exchange you know
3:43x number of yens right in exchange for
3:45indian rupee so
3:46commercial bank will go to i mean a
3:48commercial company will go to the bank
3:49right and you'll
3:50settle this uh this transaction so this
3:52is how they kind of
3:53work interrelated together and of course
3:55banks can you know trade them
3:56within uh among one another to hate
3:59their portfolio and stuff like that
4:00and finally at the bottom of the food
4:02chain you have the retail traders like
4:03us
4:04who you know go into this for maybe uh
4:07speculative purposes could be you know
4:08going for vacation you need to change a
4:09bit of
4:10currencies so yeah this is uh largely
4:12you know what
4:13what are the players in the forex
4:14markets do
4:16so advantageous of forex trading so
4:19what are the advantages number one right
4:21it is low barrier
4:22to entry so you can start with you know
4:24as little as 100 so unlike you know
4:26futures or stocks where you probably
4:28would have to start with a larger amount
4:29for forex trading right to open an
4:31account
4:31100 right is i'll say enough right to
4:34open an account
4:36it has high liquidity so you can enter
4:37and exit your trades easily so if you
4:39trade forex and you want to buy let's
4:40say
4:41a currency pair like euro dollar you can
4:43pretty much get at the price right that
4:45you see on your screen unlike you know
4:46certain
4:47markets like let's say penny stock
4:48sometimes uh market is moving quickly or
4:50market is illiquid when you
4:52thought you buy it hundred dollars and
4:53end up you buy the stock 105 dollars due
4:55to you know slippages and stuff like
4:56that so in forex trading
4:58you still have slippages but i would say
4:59it's lesser compared to the stock
5:01markets
5:02then uh the market is open 245 for forex
5:04right you can trade pretty much any time
5:05you want unlike the stock markets which
5:07is you know just open for a fixed number
5:08of hours in a day so what are the forex
5:12market hours so as mentioned right forex
5:14is open 24 hours
5:16five days a week so it's open from
5:18sunday to friday right depending on
5:20where you are in the world if you're
5:21like me
5:22in singapore it's open from monday to
5:23friday if i mean monday to saturday if
5:26you're in us then you'll be from sunday
5:27to friday because of the uh
5:28hours in the forex market because of
5:30your time zone so what are the forex
5:32market hours okay so let me just break
5:34this down so you can understand this
5:35chart
5:36so first one over here is the daylight
5:38saving time so this refers to the summer
5:40months
5:41in u.s okay in the overseas in other
5:43countries
5:44in singapore we don't have daylight
5:45saving time so this is a bit uh
5:47new to you if you are in asia and the
5:50time that we use to depict the hours we
5:52use gmt over here
5:53okay so for example let's say uh london
5:56market right for summer period the
5:59london
6:00session right starts at 7 00 am gmt and
6:03ends
6:04at 4 00 p.m gmt so 1600 is in essence
6:07at 4 pm if you convert it okay for new
6:10york
6:11it starts at 12 p.m gmt
6:15the new york session and it ends at 9 pm
6:17gmt new york session so you can see how
6:19this uh
6:20this uh table right breaks down the
6:22different forex sessions and their
6:24open and closing hours so this is for
6:27daylight savings time during the summer
6:29period
6:30and for standard time right during the
6:31winter period right the hours right are
6:33slightly different they are
6:34different by an hour so if you look now
6:36at london again now
6:38we open at 8 am whereas previously it
6:40opened
6:41at 7 00 am okay so previously 7 am here
6:46so during winter months right it starts
6:48at 8am
6:49and ends at 5pm for new york it starts
6:51at 1 pm
6:52and close it or ends at 10pm so you can
6:55see this table here
6:56i would say it's useful right to to know
6:59what time a certain forex
7:00market session opens or closed in your
7:02particular time zone
7:04and some of you might be wondering hey
7:05ray how do i know whether is it a winter
7:07or summer period simple just google
7:09if you google right then you know
7:10whether hey is it now standard time or
7:12is it daylight savings time so i'm not
7:14going to put that down here because
7:15it really depends on the time of the
7:16year so let's do a quick recap
7:19number one forex trading is simply an
7:21exchange of one currency for another
7:23it's traded by banks corporations
7:24brokers and retail traders like you and
7:26me
7:27forex trading has a low barrier to entry
7:29high liquidity and the market is open 24
7:315. and finally the forex market hours
7:33are broken down into four different
7:34sessions the sydney session the tokyo
7:36london and new york and one thing to add
7:38right a bonus thing is that uh
7:39the most volatile session right in the
7:42forex market is during the london
7:44and new york overlap so it's actually
7:45during this few hours from here
7:48to here because both the london and the
7:50new york session
7:51are open and these are kind of like the
7:52biggest financial markets in the world
7:54so a lot of transactions are going on
7:55during this
7:56forex market hours and if you look at
7:58the forex charts like the 15 minutes or
8:00one hour time frame
8:01you can see that during this period
8:02right the candles are moving a lot
8:04a lot more during this a few hours of
8:06the day so this is just one additional
8:08thing to
8:08share with you okay so we have done the
8:10recap so
8:12that's pretty much it now moving on
8:15right you will
8:16learn what is a currency pair
8:19what is the base and code currency what
8:21are the different types of currency
8:23pairs so
8:24let's get started number one what is a
8:26currency
8:27pair so one thing to note is that you
8:28trade currency in pairs not as a
8:31standalone so just like you know when
8:32you go to a supermarket to buy an orange
8:34you don't say hey i want to buy some
8:35orange they will tell you yeah you want
8:38to buy some orange right but
8:39you have to you know exchange right your
8:41money for an orange so same thing for
8:43currency pairs right when you want to
8:44trade currencies you have to exchange
8:46one currency
8:47for another currency you can't just say
8:48i want to buy some euros
8:50then the other person on the or the
8:52other party will be thinking
8:54sure you're gonna buy some euros so what
8:56are you giving me in exchange
8:57so this is why currency pairs or rather
9:00why currencies right trade in pairs
9:02not as a standalone so in essence right
9:05currency pairs help you
9:06measure a currency's value against
9:09another currency
9:11so for example let me explain right euro
9:13against the dollar so when you
9:14let's say buy the euro dollar in essence
9:17what you're doing is you're buying
9:18the euro currency all right and you're
9:21selling
9:22the us dollar so in essence right when
9:23you are buying the euro
9:25you're giving the other party us dollars
9:27in exchange for
9:28the euro currency so just like you're
9:29buying an apple from the supermarket
9:31you're giving your money in exchange for
9:33that apple so
9:34it works in pair likewise for dollar
9:37against the yen
9:38you are buying the us dollar and in
9:40return right you give the other party
9:42japanese yen make sense moving on
9:46what is a base currency or what is a
9:48base currency so let me explain the base
9:49currency is in essence right the first
9:52currency that appears in a currency pair
9:54so this will illustrate so for example
9:56euro against the dollar
9:57the first currency of the pair is called
10:00a base
10:01currency and i'll explain why shortly
10:04so what is a code currency so the code
10:06currency is
10:07the second currency that appears in the
10:09currency pair
10:10and for the euro dollar example the us
10:12dollar is the
10:14quote currency and now you might be
10:15wondering hey wayne and what's the
10:17purpose purpose
10:18of all this man so let me explain the
10:21purpose of all this is to
10:23tell you how much it cost in one
10:26in code currency to buy one base
10:27currency i know that sounds like a
10:29technical full so i'll break it down
10:32very simply which i've
10:33actually done earlier so for example
10:35euro dollar
10:36at 1.3500 what it means
10:40is you know that euro is the base
10:43currency
10:44right let's call it b base and the
10:47dollar as mentioned
10:48is the quote currency that's pretty cute
10:51so this
10:51tells you how much it costs in code
10:53currency to buy one based currency so in
10:55essence what this tells you is that
10:57for one euro dollar it will cost you
11:01one dollar and 35 cents
11:04usd so let's say you go to a money
11:07changer hey i'm gonna buy one euro man
11:09and the guy said sure my man give me one
11:12dollar and 35 cents
11:14usd and i'll give you one euro that's
11:16how it works right and that's how you
11:17kind of
11:17interpret this right okay it tells you
11:20how much
11:21it costs in code currency to buy one
11:23base currency
11:24and i think that should be a pretty
11:26self-explanatory
11:28if you don't understand this just rewind
11:30this video and i'm pretty sure you'll
11:31get it
11:32so when you're trading currencies right
11:34there are different types of currency
11:35pairs and i'll explain
11:36what are the three different types of
11:38currency pairs that you'll encounter
11:40number one is what we call the major
11:41currency pairs number two we have cross
11:44currency pairs and number three
11:45exotic currency pairs so let me explain
11:49major currency pairs these are in
11:50essence right
11:51or rather they refer to the most traded
11:53currency pairs in the world
11:54so these are the seven most traded
11:56currency pairs in the world they're all
11:58uh dollar denominated like you know the
11:59euro against the dollar
12:00the pound against the dollar dollar
12:02against the canadian etc so if you are
12:04new to forex trading right now these are
12:06i would say the seven
12:07currency pairs that you might want to
12:08consider starting
12:10i mean to trade first because they are
12:12usually uh i'll say their transaction
12:13costs are lower due to lower spreads
12:15and you know you get less slippages when
12:17trading this uh most
12:19seven most popular currency pairs so
12:21these are the major currency pairs
12:23the next one cross currency pairs this
12:24refers to currency pairs
12:26which are non-usd which doesn't have the
12:28usd you know denomination in it
12:30so for example let's say you have the
12:32euro crosses euro crosses simply means
12:34that their currency pairs that has the
12:36euro currency in it like the euro
12:38against the british pound euro against
12:40the aussie dollar euro against the new
12:41zealand dollar
12:42then you have the pound crosses like
12:43pound yen pound against the aussie
12:45dollar pound against the new zealand
12:46dollar etc pretty pretty simple stuff
12:49and finally the last type of currency
12:51parents that we have is the exotic
12:52currency pairs
12:53this is when one may when one major
12:55currency pair
12:56is paired with a developing country's
12:59currency so for example
13:02us dollar against the mexican peso us
13:04dollar is a major
13:05currency pair and mexican
13:08that's all right this is a developing
13:10country's currency so again this meets
13:11the requirement right one
13:12major currency is paired with a
13:15developing country's currency
13:16next one the euro against the turkish
13:18lira euro is a major currency turkish
13:20lira is a
13:21developing country's currency and
13:23finally the indian rupee against the
13:25british pound
13:25again so this is what we mean by exotic
13:28currency pairs
13:29so one thing to note right is that when
13:31you trade exotic currency pairs the
13:33spread
13:34tends to be wider so if you don't
13:36understand what the spread means right
13:37don't worry
13:37as you progress on your trading journey
13:39you understand but in essence right the
13:40transaction cost to trade
13:42exotic currency pairs they are more
13:43expensive compared to the
13:45major currency pairs so a quick recap
13:47number one currencies they are traded in
13:49pairs not as a standalone
13:50the base currency is the first currency
13:52in the pair the code currency is the
13:54second currency in a pair
13:56and then there are three types of
13:57currency pairs major cross and exotics
14:00so with that said let's move on
14:04so moving on in this section you will
14:06learn number one what is a bit
14:08number two what is a paypal and number
14:10three how to read a currency pair
14:12code so let's get started so first and
14:14foremost right what is
14:16a pip a pip stands for percentage in
14:18point in essence right what it's trying
14:19to do is to measure
14:21it's a measure right of a change in
14:22value in the currency pair
14:24don't worry we'll get to that later so a
14:27pip right remember it's the fourth
14:29decimal place in the currency pair code
14:31so let me explain right let me give an
14:33example
14:33so let's see let's say right euro
14:35against the us dollar moves from 1.3500
14:38to 1.3505
14:40now let me ask you where is where
14:44is the number to look at when you want
14:45to find out what is the the p value
14:47change so remember
14:48pip is the fourth decimal place so this
14:50is basically the fourth number
14:51after this dot so one two three four
14:53you're looking at this number here
14:55so you're comparing the difference
14:56between this number here and this
14:58number here okay so quiz time
15:01how many pips difference is this so
15:04let's find out
15:05an answer is quite straightforward this
15:06is actually an increase right of five
15:08pips from 1.3500 to 1.3505
15:12it's a difference of five pips so you
15:14can see right the last
15:15digit the fourth decimal placing digit
15:17right it has moved from zero
15:19to five that's an increase of five pips
15:23let's do another example let's say this
15:24time around the euro
15:26against the dollar moves from 1.3400
15:29to 1.3350 now how many pips
15:33is this right let's uh give you five
15:35seconds to figure this out
15:36one two three four five okay so the
15:39answer is
15:40a decrease of 50 pips so in essence
15:42right this uh
15:44euro against the dollar it has dropped
15:4650 pips from 1.3400 to 1.3350
15:50so quick tip that i have for you that if
15:51you have difficulty you you know using
15:53your fingers counting and stuff like
15:54that you just take a calculator
15:56take this last four digit minus this
15:58last four digit and you'll get 50.
16:00okay that's another way to go about it
16:03so moving on one thing to share is that
16:06the yen pairs they are special they are
16:08not like you know the other currency
16:09pairs where the
16:10pip right is at the fourth decimal place
16:12for yen pairs like you know the dollar
16:13against the japanese year and the pound
16:15against the japanese yen
16:16the pip value is the second decimal
16:19place so bear this in mind only for yen
16:20pairs the
16:22pit value or under the the peak check
16:24the
16:25the peak when you look at the currency
16:26code right is at the second decimal
16:28place
16:29so let me give you an example let's say
16:31the dollar against the japanese yen
16:33moves from 100.10 to 100.15
16:37how many pips is that how many
16:41uh how much pips did this pair move
16:44again very simple you can just
16:45remember second decimal place is where
16:47you look at
16:48for the pit for en pair so you just take
16:5415 minus 10 and the answer is an
16:57increase of
16:585 pips next one another example
17:02let's say the dollar against the
17:03japanese yen moves from 100.25 to 100.1
17:07how many pips difference is this again
17:09very simple take the uh
17:121 0 which is 10 minus 25 and you get
17:16a decrease of 15 pips and this is in
17:18essence right how you
17:20you are measure right how many pips a
17:23currency pair
17:24has moved and to take things a step
17:26further because the forex got you know
17:28like to make your life a bit more
17:29difficult
17:29there's another thing called a pipette
17:32and in essence right a pipe is simply
17:35known as
17:36fractional pips they are 110 the value
17:39of a pit
17:40confusing don't worry an example usually
17:42solves your pain
17:44so and one thing to bear in mind is that
17:46a pipette is the fifth
17:47decimal place for most currency pairs
17:50for the yen pairs
17:51it's the third decimal place so an
17:54example
17:54would ease your pain let's say euro
17:57against the dollar moves from one three
17:58five zero zero five
18:00which this one here is the pipette to
18:031.3505 seven this seven here is the
18:06pipette value
18:08so how many pips movement is this
18:11so again you just do a simple math you
18:13will realize that this is an increase
18:15of 5.2 pips makes sense i know
18:18it makes sense right so let's do a quick
18:20recap
18:21number one a pip is a measure of a
18:23change in value right in the currency
18:25pair
18:26it's the fourth decimal place for most
18:28currency pairs except the yen which is
18:29the third decimal place
18:31if you want to be a little bit more you
18:32know particular there's something called
18:33the pipette which is
18:34in essence 110 of a pip
18:46so in this section what will you learn
18:48you will learn
18:49number one what is leverage number two
18:52how leverage
18:53affects your trading and finally what
18:55are the different types of forex
18:57lot sizes so let's get started what is
19:00leverage
19:01how leverage affects your trading and
19:04what are the different types of
19:05forex lot sizes so let's begin
19:08so what is leverage so intuitively i
19:10know you know
19:12what leverage means but let's explain
19:14this when it comes to the forex markets
19:16so leverage is in essence right the
19:18ability to trade
19:20a larger amount of money relative to
19:22your account size
19:23and leverage is a double h so and i'll
19:26explain
19:27more so let me give you an example let's
19:29say you have a thousand dollars in your
19:31trading account and you buy
19:3210 000 worth of euro usd
19:36this means you borrow the extra nine
19:38thousand dollars
19:40to trade and if you want to measure the
19:43leverage this is a leverage of one to
19:44ten why is this a one to ten you take
19:46the ten thousand dollars
19:47that is worth of the euro usd divided by
19:50the initial capital that you have in
19:51your account
19:52and you get 10 so this is a leverage of
19:541 to 10.
19:56now the question is what if euro usd
19:58goes up how does leverage
19:59impact your trading so recall you have a
20:02thousand dollars
20:03account and you buy 10 dollars worth of
20:05euro usd
20:07your ten thousand dollars is now worth
20:09eleven thousand dollars
20:10why eleven thousand dollars very simple
20:12you just take ten thousand dollars
20:14and you multiply by one point one
20:17because you actually
20:18earn 10 because this currency pair went
20:21up 10
20:21so 10 000 minus or rather multiplied by
20:241.1
20:25is equal to 11 000 or if you look at it
20:27another way 10
20:28of 10 000 is one thousand one thousand
20:30plus ten thousand equals to eleven
20:31thousand that's another way to to do it
20:34next you return the nine thousand
20:35dollars that you owe what you're left
20:38with is the two thousand dollars
20:39and remember the two thousand dollars
20:41right what you had initially at the
20:42start was a thousand dollars so in other
20:44words your profit is
20:47one thousand dollars all right two
20:48thousand dollars minus your original
20:50capital that you started with you made a
20:51profit of
20:52a thousand dollars on this particular
20:54trade and i know man
20:55this looks easy man i'm gonna be the
20:57next market wizard millionaire trader
20:59well not so far as my young part padawan
21:01because what if
21:03euro usd goes down 10 and how would this
21:05change
21:06so now recall you have a thousand
21:07dollars account and you buy ten thousand
21:09dollars worth of euro usd your ten
21:12thousand dollars is now worth nine
21:13thousand
21:13why is that because ten thousand okay if
21:16you lose ten percent of your capital
21:18now it's worth nine thousand dollars you
21:21return the nine thousand dollars that
21:22you owe
21:23you're left with zero dollars in fact i
21:25have no idea why there's four zeros here
21:26but
21:27zero is zero is zero okay and your
21:29original capital is a thousand dollars
21:31so this means your loss
21:33is a thousand dollars because you
21:34started off with a thousand dollars and
21:35you're left with
21:36zero zero zero zero so in other words
21:38you lost a thousand dollars
21:40so the key thing to point out is that
21:43leverage can amplify your gains
21:45and losses so if you think about this if
21:47without leverage
21:48this right would have been a 10 loss to
21:50you but because you used leverage
21:52you lost 100 instead of 10 so likewise
21:55when you had a gain earlier
21:58when you had a profit when the market
21:59went up ten percent if you didn't use
22:01leverage that would be
22:02a profit of ten percent for you but
22:04because you use a one to ten leverage
22:05it is amplified ten times you made a
22:07profit of a hundred
22:08percent so in this case it's a thousand
22:11dollars but in percentage term is 100
22:13okay so this is uh pretty much the key
22:15thing that i want to point across is
22:16that leverage
22:17it can amplify your gains and losses and
22:19for this case in this example you lost
22:21100 of your capital because uh you use a
22:241 to 10 leverage
22:25if you didn't use leverage at all there
22:26would be a 10 loss of your capital
22:29moving on right i want to talk about
22:31forex lot sizes so
22:32what are the different types of forex
22:34slot size out there number one
22:36we have a standard lot which is
22:38equivalent to a hundred thousand
22:40units so when you key in a hundred
22:41thousand units to buy in your forex
22:43broker you are
22:44essentially buying one standard lot then
22:47below that we have a mini lot which is
22:4910 000 units followed by micro lot which
22:53is a thousand
22:54units and smaller than micro lot we even
22:57have
22:57nano lot which is a hundred units
23:01so one thing to point out is that you
23:02can trade fractional lot sizes it
23:04doesn't mean that you only can trade one
23:05standard lot one mini lot
23:06or five standard lots you can you know
23:08break it up and trade something like 1.3
23:10standard lot you can trade 2.5 mini lots
23:133.7 mini lots 2.6 standard lot
23:171.5 micro lots it is all possible right
23:20when trading the forex market so in a
23:22way you can you know better manage your
23:24risk as i will explain
23:25how that will work in the later section
23:28so let's do a quick recap number one
23:31leverage is the ability right to trade a
23:32larger amount of money
23:33relative to your account size and yes
23:36you have seen right leverage is a double
23:37double h
23:38so it can amplify your gains or losses
23:40and finally we talk about you know the
23:42different types of load sizes in the
23:43forex market standard lot
23:45micro lot mini lot and nano lots
23:48okay so in this section you will learn
23:50what is a pip value
23:52and how to calculate a pip value so what
23:55is a pip value so a pip value in essence
23:57is trying to answer the question how
23:58much is
23:58one pip worth and to find that out right
24:01you need to answer two questions
24:03number one the lot size that you're
24:04trading and number two the code currency
24:07of the currency pair so let me explain
24:09number one the lot size
24:10so as you know right in the forex market
24:13there are different lot sizes you know
24:14standard lot mini lot etc so one
24:16standard lot right is actually
24:18equivalent to a hundred thousand units
24:20and it's worth
24:21ten dollars per pip
24:24one mini lot is ten thousand units and
24:26it's worth a dollar a pip
24:28and one micro lot is a one thousand
24:30units which is 10 cent per pip or 0.1
24:32dollars
24:33a pip and one thing to point out is
24:3610 mini lots is actually equivalent to
24:38one
24:39standard lot because if you look at this
24:4010 000 units you multiply by 10 is 100
24:42000 units so in other words 10 mini lot
24:44is one standard lot so needless to say
24:4610 micro lots
24:48is equals to one mini lot right a
24:49thousand units you multiply by 10
24:51gives you 10 000 units so 10 micro lots
24:5510 micro lots is one mini lot as well
24:57okay so so bear this in mind
25:00and this holds true only if your code
25:02currency is
25:03in us dollar like euro dollar aussie
25:05dollar new zealand dollar etc
25:08so clearly right what if your code
25:10currency is not in u.s dollar so this is
25:12why we need to look at the second thing
25:14which is your
25:15code currency so let's say for example
25:17if the code currency is in euro
25:19then one standard lot clearly is 10 euro
25:22a bit one mini lot is one euro a pip
25:26and one micro lot is 0.1 euro per bit
25:29makes sense all right so far so good so
25:31let's have a look at an example
25:33you trade euro usd and buy 2.3 standard
25:36lots
25:37how much is the value per pip so if you
25:39just you know look at this
25:41you know that 2.3 standard lot
25:44is equals to two standard lot and three
25:47mini log that's one way to look at it or
25:49you can look at it as
25:5023 mini lot that is the same thing so
25:53depending how you want to look at this
25:54let's say let's treat it as 23 mini lot
25:57we know one mini lot is worth one dollar
26:00per bit okay so clearly 23 mini lot
26:03means it's 23 per pip
26:06and there you have it moving on next
26:09example
26:10let's say you trade the pound against
26:12the aussie dollar and by 5.5
26:14mini lots how much is the value per pip
26:16so again just remember the two things i
26:18shared with you number one
26:20what is the lot size trader 5.5 mini
26:22lots okay great next thing what is the
26:24code currency
26:25aussie dollar great you know one mini
26:27lot is worth one dollar
26:295.5 mini lots means it's 5.5 dollars
26:34so what is the currency the code
26:36currency this is aussie dollar so it's
26:375.5
26:38aussie dollar per pay
26:42okay great so that should be the answer
26:44so if you look at the answer
26:46it's 5.5 how do i know this because i
26:49did these slides and
26:50and uh clearly i don't know what's the
26:51answer so yeah there you have it that's
26:53the answer
26:54so all this actually would be useful to
26:56you if right let's say your let's say
26:58right now
26:58your account currency is in australian
27:01dollar and yeah 5.5
27:02aussie dollar per that would make sense
27:04but of course as you know
27:05there is no guarantee that the code
27:07currency will be the same currency as
27:09your account funding maybe you could
27:10find it in us dollar
27:11you could find it in singapore dollars
27:13it could be different so how do you
27:14actually
27:15translate this value into your own
27:17account currency
27:18if your own account currency is
27:20different from the code currency
27:21so this is where we can take things a
27:23step further and to find out the pip
27:25value in your accounts
27:26currency if the currency is different
27:28from the code currency
27:30so again you need a few things number
27:31one the lot size number two is the code
27:33currency and number three is the
27:34exchange rate between the code currency
27:36and your
27:37accounts currency so let me give you an
27:39example because example is your pay
27:41number one let's say you buy one
27:43standard lot of euro usd
27:46your account currency is in singapore
27:48dollars
27:49the exchange rate between the usd and
27:51sgd is 1.3
27:53how much is the value per pip so let's
27:54again right do this a simple
27:56exercise you know one standard lot is
27:58100 000 units reynolds say one
28:00standalone is worth 10
28:01per bit okay 10 per bit
28:05then you realize that your
28:08account currency is different from the
28:12code currency so what now so what you
28:14need to do is to
28:16to convert right usd into sgd as you
28:18know right now
28:19one usd is worth 1.3 sgd so this means
28:23one us dollar is worth one dollar 30
28:26cents singapore dollar so if you want to
28:27convert
28:28this 10 us dollars into singapore
28:29dollars i just take this multiplied by
28:311.3
28:33and i have a figure of 13 singapore
28:35dollars
28:36sgd okay and that's the answer right the
28:39value profit will be 13
28:40singapore dollars per bit and there you
28:43have it right in case you want to know
28:44the
28:45kind of like the math breakdown is 10
28:47usd per bit multiplied by 1.3 because
28:49it's the exchange rate between us and
28:51singapore dollars
28:52and you get 13 singapore dollars per pip
28:55another example shall we to really
28:56hammer home this concept
28:58you buy two standard lots of pound
29:01against the new zealand dollar
29:03your account currency is in canadian
29:05dollars the exchange rate for new
29:07zealand canadian is 1.5
29:09how much is the value per pick so i'm
29:11going to give you
29:12five seconds to do this i'm just kidding
29:14five seconds too fast i'm gonna do this
29:15together with you
29:16and let's find this out but you know
29:18kind of like you know pause this video
29:19and do it on your own if you wish to
29:21if not i'm gonna walk you through how to
29:23do this step by step so again first
29:24thing first
29:25is the number of lots we are trading two
29:27standard lots you know that's equals to
29:2920 new zealand dollar per pip
29:34okay if you do not know why it's 20 go
29:36and look back at the earlier slide so it
29:38makes sense
29:39your account currency is in canadian
29:40dollar exchange rate between new zealand
29:42and canadian
29:43canadian dollar is 1.5 so what i need to
29:45do is for to find out
29:47how much is 20 new zealand dollar worth
29:49in canadian dollars how much is that
29:51very simple just multiplied by the
29:53exchange rate this prevailing exchange
29:54rate
29:55of course this is not a real number i
29:56just came up with this if you just look
29:57at the normal forex website you will
29:58have
29:59you can find out what's the prevailing
30:00exchange rate so 20 i multiply by 1.5 it
30:03will
30:04give me right how much 20 or rather 20
30:06new zealand dollars
30:08is worth in canadian dollars an answer
30:10is 30. 30 canadian dollars
30:13per pip okay so let's have a
30:17look tada okay so so yeah so with that
30:21said right
30:22let's do a quick recap number one your
30:24pip value depends on a few things
30:26the lot size the code currency and
30:29finally right the exchange rate between
30:30the code currency and your account
30:32currency if they are different if they
30:33are the same then you just need the
30:34first two things
30:35and you can find out what is the pip
30:37value
30:41so in this section you will learn number
30:44one what is risk management and why
30:46it matters number two what is position
30:49sizing and finally how to calculate your
30:51position size such that you never blow
30:54up
30:54blow up another trading account so this
30:56topic that i'm about to share with you
30:58is very important right so pay close
31:00attention
31:01so first and foremost what is risk
31:03management so
31:04if you ask me risk management is the
31:05ability as a trader to encounter a
31:08series of losses right and not
31:10blow up your trading account so for
31:11example even if you sustain a series of
31:1310 losses in a row
31:15your trading account should be pretty
31:17much still intact yes you have a bit
31:19of a losses along the way but that
31:20account right should still have
31:22still have most of the money intact so
31:24that's what risk management is all about
31:27so it's important because you can have a
31:29winning trading strategy but without
31:32proper risk management right you will
31:33still end up
31:34a losing trader i can guarantee it so
31:36let me share with you an example so you
31:38know what i mean
31:39so let's say for example there are two
31:40traders john and sally and they both
31:42have
31:43a 1 000 trading account to start with
31:46their trading strategy has a 50 winning
31:49rate so this means they win half the
31:50time and a one to two
31:52risk reward ratio so let me explain what
31:54risk reward ratio is
31:56so let's say for example you risk
31:59a hundred dollars on a trade okay that's
32:02the amount of money that you're willing
32:03to lose on a particular trade
32:05and the outcome for you is favorable
32:07instead of losing hundred dollars right
32:08the market went in your favor and you
32:10made a profit of 200
32:12so in other words this 200 right is two
32:14times the amount that you had intended
32:17to risk initially so this is what we
32:18call
32:19a one to two risk reward ratio your
32:21reward right it's two times
32:22your initial risk so another example
32:24let's say you have a
32:26500 risk on the trade and instead of you
32:29know
32:30losing the 500 market went in your favor
32:32and you
32:33made five thousand dollars in state what
32:35is the risk to reward ratio on this
32:37trade
32:37this is a risk to reward ratio of a one
32:39to ten you were risking at five hundred
32:41dollars and you made five thousand
32:42dollars
32:43at the end of it so this is a risk
32:45reward ratio of one to ten
32:48next john risks 250 per trade and sally
32:52risk twenty dollars per trade
32:56let's say the outcome of the trades for
32:57both of them is in this
32:59sequence right l stands for losing right
33:01lose lose lose
33:02lose then win win win win so now what
33:06is the outcome for both traders let's
33:08look at john you can see for john
33:10he loses 250 because the first trade is
33:13a loser
33:14loses another 250 another 250 another
33:16250 and then he blew up
33:18so before he could even smell the winner
33:20he lost his entire trading account
33:23on the other hand let's have a look at
33:24sally
33:26as you can see sally goes through the
33:27same losing streak right she loses 20
33:29dollars
33:30lose 20 lose 20 lose 20 and then she
33:32made 40
33:3340 40 and 40 because this was a string
33:36of winners at the end
33:37but why forty dollars again because we
33:39have a one to two risk reward ratio
33:41right
33:41for their trading strategy so if sally
33:44risk twenty dollars on each trade and if
33:46the market
33:46or rather if she achieves a one to two
33:48risk reward ratio this means a profit
33:50is two times the initial risk so two
33:52times of 20 is forty dollars so this is
33:54how
33:54we get forty dollars and at the end of
33:56it sally made
33:58a total return of eighty dollars so
33:59that's about eight percent gain
34:01on her account whereas you look at john
34:04he actually lost 100 of his account so
34:07hopefully right
34:08using this simple example you can see
34:10the importance of risk management
34:12right in this case both traders they are
34:13trading with a winning strategy
34:15but because of risk management one of
34:18them loses his entire account and the
34:19other one
34:20is actually you know making some money
34:22right from trading the markets so this
34:23is important
34:24so now the question you might be
34:25thinking okay right now i get it right
34:27risk management is important but how do
34:29i
34:29manage my risk you know how do i make
34:31sure that every time i put on a trade
34:33right i don't lose everything and more
34:34so this is where the next topic comes
34:36into play
34:38position sizing so what is position
34:40sizing so position sizing is
34:42simply right trading the right number of
34:43units right such that
34:45even if a trade ends up being a loser
34:48it's only a fraction of your trading
34:49account
34:50okay let me repeat once again right
34:52position sizing is
34:54knowing right how many units you should
34:56trade
34:57such that if that trade goes against you
34:59you only lose a fraction of your trading
35:01account and as a general guideline i
35:03usually advocate right
35:04not to lose more than one percent of
35:06your trading account on each trade so
35:08for example let's say if your account is
35:09like a
35:10ten thousand dollars trading account one
35:12percent of ten thousand is a hundred
35:13dollars so this means every trade you
35:15put on
35:15you should not lose more than 100 on
35:18each trade
35:19and now brings us to the question right
35:21how do we you know
35:22calculate that in such a manner where
35:24you know you know you will lose more
35:25than 100
35:26on each trade so to do that you need to
35:28know a few things okay so
35:30this is kind of like the secret formula
35:32right so position size is equals to the
35:34amount
35:34to risk right the amount of uh dollar
35:37that you're willing to risk
35:38divided by a stop loss multiplied by
35:40value per pip so amount to risk is
35:41usually i
35:42recommend one percent risk on each trade
35:44some some traders will go with two or
35:45three percent
35:46uh that's pretty much you know up to an
35:48individual trader and after which you
35:49divide it by your stop-loss multiplied
35:51by your value per bit
35:52so i'm going to share with you a very
35:53simple uh way to do this okay you don't
35:57have to so i'll just
35:58go with you a manual way and then after
36:00which i show you how to do with a faster
36:01way so let's say you're risking 100
36:04you're willing to raise 100 and let's
36:05say you know your stop loss is let's say
36:07100 pips okay so you put 100
36:09and your value per pip right let's say
36:10you're trading euro usd is
36:12uh 10 per bit for a standard lot so you
36:14put your 10
36:15okay you plug in the numbers you get 100
36:18divide by a thousand
36:20and if you do it you end up with 0.1
36:23standard lot which is equivalent to one
36:26mini lot
36:27so the trouble with this is that your
36:30value per bit
36:30is constantly changing it really depends
36:32on the code currency it depends on the
36:34account funding that
36:36you have funded with with your account
36:37so you can see that you know things can
36:39get really cumbersome right so
36:40one thing i suggest is to use a position
36:43sizing calculator to make your life
36:44really easy and i'm going to show you
36:45how to do this step by step
36:48so you can google you know position
36:49sizing calculator and this is one that
36:50i've
36:51found you can you know use it it's free
36:53so let's say you're trading again euro
36:54usd
36:55your account currency let's say it's in
36:56us dollar let's say your account size is
36:58like what i said earlier ten thousand
36:59dollars
37:00and your risk on each trade let's say
37:02it's one percent you can put your one
37:03percent
37:04in this case you ever switch to you know
37:05dollar terms let's say you want to risk
37:07a hundred dollars
37:08which is also one percent that is fine
37:09as well but in this case let's go with
37:11the percentage
37:12let's say one percent let's say your
37:13stop loss in pips right is 100 pips put
37:15in hundred
37:16contract size let's leave it at hundred
37:18thousand which is equal to one standard
37:20lot
37:20you click calculate and there you have
37:22it right tells you the lots to trade is
37:230.1 which is equals to
37:250.1 standard lot or one mini lot can you
37:28see how fast this is
37:29let's do another example let's say this
37:30time around you're not trading euro usd
37:32you're trading pound against the aussie
37:34let's say your account currency is in
37:36new zealand dollars okay and let's say
37:38this time you're a baller your account
37:39size is hundred thousand dollars
37:41and you're a baller and you still risk
37:44one percent on this trade well done and
37:46let's say your stop-loss this time
37:48around is 350 pips
37:49contract size again hundred thousand you
37:51click calculate it will tell you
37:52how many units to trade right such that
37:55if even if the trade hits your
37:57stop loss you will only lose one percent
37:59of your account so you click calculate
38:01and in this case it tells you that you
38:02can trade 0.263
38:04standard lot which is about 26 uh sorry
38:07uh
38:082.63 mini lots make sense so again this
38:11is very useful so
38:12again let's you know interpret this
38:14together so this means right
38:16for this particular pound or z trade and
38:18let's say your account is in new zealand
38:19dollars
38:19and you're risking one percent of this
38:21hundred thousand dollars this means
38:22right if
38:23the trade goes against you right with a
38:25stop loss of 350 pips right
38:27you will lose right a thousand dollars
38:30thousand new zealand dollars right in
38:32your trading account which is the one
38:33percent that we have defined
38:34over here right and this is the position
38:36size that you should be trading with
38:372.6 mini lots okay it makes sense
38:42so this is how you use a position sizing
38:44calculator so okay let's do one more
38:45example so you really understand this
38:47big time
38:48so let's say this timer we do something
38:49simple like aussie dollar you want to
38:50trade the aussie against the us dollar
38:52let's say your account currency is in
38:55aussie how about that
38:56same uh just put aussie dollar let's say
38:58your account size this time around is
39:00five thousand dollars
39:01and let's say you are risking a little
39:03bit more two percent risk on each trade
39:04which is still about
39:06uh hundred dollars so your stop loss
39:08this time around let's say it's only 50
39:09pips
39:10okay contract size again hundred
39:11thousand units so now the question is
39:13how many
39:14units right should you be trading such
39:16that if this trade goes against you and
39:18hit your 50 pip loss
39:19the loss of on this trade is only two
39:21percent of your account two percent of
39:22this five
39:22thousand dollars five thousand aussie
39:25dollars
39:26click calculate and it tells you that
39:27you should only be trading 1.53
39:30mini lots make sense okay so don't worry
39:32i'll share with you uh
39:33uh we'll talk more about you know
39:34position sizing risk management with
39:36chart examples later on but for now i
39:38just want you to
39:38to know how to use this very useful
39:40calculator just click google there are
39:42many free available ones and just pick
39:44whichever that you know you're
39:45comfortable with so let's do a quick
39:48recap number one position sizing is the
39:50tool to manage your risk
39:52and use a position a position sizing
39:55calculator right to make your life
39:56easier i don't expect you to
39:58manually you know calculate it most
39:59brokers usually have an inbuilt
40:01calculator function if it doesn't have
40:02right then just you know you go to any
40:04of the free website
40:05via google and you can use the
40:07calculator to help you calculate the
40:08number of units to trade such that you
40:10know
40:11even if the trade is a losing trade
40:12right you only lose a fraction of your
40:14account
40:15now moving on let's talk about the
40:18different types
40:19of forex orders right so in this section
40:21it's all about you know learning the
40:22different types of forex orders and one
40:24thing to point out is that
40:25uh there are many more different types
40:27of orders that you can use especially
40:28when you're using professional trading
40:30platforms but the ones that i'm about to
40:32share with you right now is i would say
40:33the ones that you are likely to use
40:34right most of the time
40:36okay so let's get started first one
40:39market order second one is a limit order
40:41third one is a stock order and finally a
40:42stop loss
40:43order so let me explain each one of them
40:45step by step
40:46first one is a market order so let's say
40:48it's a buy market order order
40:50because it could also be a sell market
40:53or the concept is the same but in this
40:54case
40:55let's go with let's let's say a buy
40:56market order this is in essence right
40:58you're trying to you know
41:00buy at the current market price right
41:03now no matter what so this is like you
41:04know sending an
41:05order to your brokerage platform and say
41:06hey i want to enter euro usd
41:08right now no matter what now so your
41:11broker will fill you
41:12at a trade at the current prevailing
41:14price
41:15so the pros to it is that you know
41:18you're guaranteed to enter a trade there
41:20is no
41:20what if but or whatsoever you're
41:22guaranteed to enter a trade but the
41:23downside to this
41:24is you might get sleep page right during
41:27fast
41:27moving markets and you might be thinking
41:29right now what is slippage man
41:31so here's the thing right in the forex
41:32market yes it's liquid
41:34most of the time but when it when
41:36there's a big piece of news coming up
41:38like let's say you know
41:38nfp non-farm payrolls or fomc meetings
41:41right let's say euro usd is currently
41:42trading at one three
41:43zero zero zero right but during fast
41:46moving markets
41:47you if you hit market order right you
41:48could get slippage right where you
41:50thought hey
41:50i'm gonna buy a 1.3 but you end up you
41:52know buying actually at one three
41:53zero let's say two zero you had end up
41:56paying 20 pips more than expected so
41:58this is kind of like the downside to
41:59using market order because of this uh
42:01slippages so instead of you know buying
42:02at one point three zero zero zero you
42:04end up buying at one point three zero
42:05two zero
42:06a slippage of 20 pips so in other words
42:08you're paying 20 pips more than
42:10you expected okay so this is a market
42:12order
42:13the other type of market order right is
42:15limit order
42:17so again let's talk about buy limit
42:18order sell limit order is just the
42:20opposite
42:20so for a buy limit order right it's an
42:22order an order to buy
42:24below the current market price so let me
42:27give you an example
42:28so let's say market is in a range
42:31between these highs and this lows it
42:33goes up comes down goes up and now it's
42:35in the middle and you
42:36think to yourself ah man price right now
42:39is in the middle right i want to buy
42:40i want to be a cheapskate i want to buy
42:41the best price and it seems like the
42:43best price
42:44is near this lows over here and let's
42:46say this is zero usd this lows is around
42:48one point
42:50five okay so what you can do is you can
42:52place a buy limit order
42:54at one point five zero zero zero so such
42:57that if the market
42:58comes down into this level you will
43:01get filled on that buy trade but of
43:04course if the market doesn't come down
43:05you won't get fuel so that is kind of
43:07like the pros and cons
43:09to using a buy limit order so let me
43:10give you a chart example you can so you
43:13can see what i mean
43:14so this is uh for example pound canadian
43:17let's say you're looking at this chart
43:18maybe on the eight hour time frame
43:20okay and you zoom out a little bit and
43:22you realize oh this
43:23this market right this seems like a good
43:25place to buy this is an area of support
43:28don't worry if you're not familiar with
43:29this technical term i'll explain more in
43:31the later section but let's say hey
43:32you want to buy around 172 right this
43:34looks like a good place to buy because
43:36the market has bounced once twice
43:38you know and three times over here this
43:39looks like a good place to buy but the
43:41current market price is at this point
43:42over here which is almost
43:44near 1735 so what can you do you can
43:47place a buy limit order
43:48over here a buy limit at 1.72
43:52so this means only if the market comes
43:54down low
43:55enough into this 1.72 level
43:58only then will you get filled if not you
44:00won't be in this trade so this is what a
44:02buy
44:03limit order means so of course all right
44:06the good thing about it is that you get
44:07to buy at the price you want
44:09the downside is you might not get filled
44:11on the trade so maybe you're waiting for
44:12that level but the market doesn't come
44:14to the level and instead
44:15you know if it continues you know going
44:17up higher then clearly right you
44:19wouldn't you know be
44:20in the trade so vice versa right for a
44:22sell limit order the
44:24concept is just the opposite so moving
44:26on the third type of
44:27order is a stop order so again let's
44:29talk about buy stock order so this
44:31in essence right is to in order to buy
44:34only if the market moves above
44:36a specific price level so you might be
44:37thinking what does that mean
44:39so again i can give you an example let's
44:41say
44:42market is uh let's say it's trending
44:44higher it goes up pulls back goes up
44:46pulls back and it's starting to go up
44:48and you tell yourself
44:50i'm looking at this chart and it would
44:51make sense right that
44:53i want to buy only if the price can
44:55breaks above this highs because if you
44:57can breaks above this highs
44:58then there's a good chance that this
44:59market could continue higher so you want
45:01to tell yourself i will only
45:02buy if the price can breaks above this
45:05high if it doesn't break above this high
45:07i will not you know enter a trade so
45:09what you can do is to use a
45:11buy stop order so an example is this one
45:14here
45:16if you look at this chart dollar against
45:17the chinese yuan this is the eight hour
45:18time frame so again you can look at this
45:20and say hmm
45:21at this point right right now i have no
45:22idea when the price might go up and come
45:24back down
45:25you know and again i don't want to enter
45:26right now because you know this could
45:28happen
45:28and then you're thinking to yourself i
45:30feel more confident if the price
45:32can break above this highs only then i
45:34would be willing to buy
45:36so if that's your thought process what
45:37you can do is you can use a buy stop
45:39order you can place a buy stop order at
45:41this price
45:41around six dollars and 59 cents around
45:45this price point
45:46which is somewhere about here so you can
45:47place a buy stock order here
45:49let's call it bs buy stop not not not bs
45:52that you're familiar with but
45:53buy stop order at 6.59 so such that if
45:56the price goes up and breaks above
45:586.59 this is an order that would
46:01automatically you know get you
46:03into this trade right because it broke
46:05it broke about broke above this key
46:06level
46:07659 that you have you know uh put into
46:09your broker platform
46:11so it's in order to buy if the price
46:13moves above a specific price level
46:16so this is useful right with your
46:17trading breakouts this order is
46:19you know absolutely useful because in
46:21breakout trading the price will break
46:22out
46:22of a specific level and then you'll
46:24continue with the momentum right to hit
46:26higher so if you have a buy stop order
46:27you
46:28are you know kind of like assured to
46:29enter right if the price could break out
46:31of a level
46:32the downside to this is that it might be
46:34a false breakout so again what could
46:35happen is that let's say
46:37pound the dollar against the chinese yen
46:39so this is the highest
46:41price could go up break out and then
46:43boom reverse right this is possible as
46:45well
46:45anything can happen in the market so
46:47this is a one possibility that could
46:49happen right if you're
46:50you know using buy stock order to enter
46:52a trade
46:53so the next type of order right will be
46:56uh
46:57stop loss order so the first three
46:58orders that i shared with you right
46:59those
47:00are orders right to get you into a trade
47:02so for stop loss
47:03order is the opposite because this is an
47:05order to get you
47:06out of a trade so so let's say we are
47:09going with a long entry
47:11okay so a stop loss order is in order to
47:13sell your position if the price
47:15exceeds a specific level so for example
47:17let's say
47:19you market this in a range up down up
47:22down
47:23they start to go up okay and this is the
47:25area of support and you start to buy
47:26over here
47:27okay and what happens is that you know
47:29as you know in trading
47:30nothing is certain there's a possibility
47:32that this market could continue to
47:33reverse down lower
47:35and lower and if you don't bail out of
47:37your trade in time right you could you
47:38know lose a lot of money so this is
47:39where you can use a stop-loss
47:41order and say you know hey you can tell
47:43your broker hey you know what if the
47:44market
47:45you know breaks below this level in rate
47:47okay if the market
47:48reaches this level in rate i want to get
47:50out of that trade so to tell that you
47:52will tell your broker to set a stop loss
47:54order at this particular price let's say
47:55this price is at
47:56two dollars right and you will exit your
47:59trade so this is what we mean by a stop
48:01loss order is in order to sell your
48:02position if the market moves against you
48:05and reaches a specific price level so
48:08a chart example would help so let's say
48:11you look at dollar against
48:12usd against the singapore dollars so you
48:15can look at this right market right now
48:17looks a little bit bullish right this
48:19area of support
48:20and it's starting to hit higher but of
48:21course as you know market could possibly
48:23you know reverse down
48:24and break lower so to protect your
48:26downside what you can do is to set
48:28a stop-loss order okay so this is the
48:31area of support and what i would say a
48:33proper stop-loss order could possibly be
48:35at one thirty three
48:37six level around here so this means i
48:39can tell that broker and say
48:40hey you know i i am long
48:44usd against the singapore dollars but i
48:46know the trade could go against me so
48:48i'm going to set a stop loss order at
48:491.336
48:51so if the market let's say reverse down
48:53lower and hit my stop loss level which
48:55is
48:55this one over here the stop loss level i
48:58will want to
48:59sell the position that i have to protect
49:01my downside so i can leave to fight
49:03another day so this is how
49:04a stop-loss order works is to protect
49:07your downside
49:09okay and of course right the downside to
49:11using a stop-loss order is that you
49:13might get stopped out of your trade
49:14prematurely so what could happen also
49:16is that okay let's say you set your stop
49:20loss
49:20at this level here there's no
49:23there is you know nothing to stop the
49:24market from coming down lower
49:26when you hit your stop loss and then
49:28reverse up higher that could also happen
49:30so this is kind of like
49:31the downside downside to using a
49:32stop-loss order but as a forex trader
49:35as a trader who uses leverage in your
49:36trading i still suggest you use a
49:38stop-loss order
49:39sometimes yes this could happen it sucks
49:41but in the grand scheme of things right
49:42you
49:43will likely right have a longevity in
49:45your trading career because your losses
49:47right or
49:47are always kept small and that's
49:49achieved by using proper risk management
49:51and position sizing and again
49:52those are things that you have learned
49:53earlier and we'll revisit them
49:55later with chart examples but for now i
49:57just want you to be familiar with a
49:59stop-loss order
50:01okay and the opposite for stop-loss or
50:03the right is can be used for both the
50:05long trade
50:05and a short trade the concept is the
50:07same just you know the inverse so let's
50:09say for example you are
50:10in a short trade let's say market comes
50:12up into this area of resistance and you
50:15sell
50:15right you can put your stop-loss order
50:17above this high so if the market breaks
50:19out higher
50:19you would exit this trade if the market
50:21hits your stop-loss at this particular
50:23price point so it's just the inverse
50:24right of a long entry
50:26[Music]
50:27so let's do a quick recap right of the
50:29four market orders you have just learned
50:30number one market order gets you into a
50:32trade immediately no matter what
50:34a limit order gets you into a trade only
50:36if it comes to a specific
50:38price level that you have dictated a
50:40stop order gets you into
50:42a trade if the market exceeds a certain
50:44price level for example let's say buying
50:46breakout only if
50:46let's say breaks above let's say a
50:48hundred dollars will you be entering the
50:50breakout trade so that's
50:51what a stop order a buy stop order can
50:53do for you and finally a stop-loss order
50:56right would get you out of a trade if
50:57the market you know
50:58exit a certain price levels to protect
51:01your downside
51:03now moving on in this section you will
51:06learn
51:06the two prices in the financial markets
51:09not just the forex markets
51:10what is the spread and why it matters
51:13and how
51:13to reduce the spread okay so let's get
51:16started the two
51:17prices in the market so here's the thing
51:19right when you are trading the forex
51:20market the stock market
51:22or any of the financial markets there is
51:23always two prices
51:25so they are number one the bid the bid
51:28is the price which you can
51:30sell at and the ask this is the price
51:33which you can
51:34buy at so this concept is the same as
51:36you know going to a money changer
51:38whenever you let's say for example you
51:39want to you know buy and sell
51:41a certain currency let's say euro
51:42against the usd you are always being
51:44quoted two prices to beat
51:46and ask and it's the same concept over
51:48here so let me
51:51share with you you know and explain what
51:53this means so the bid right let's say
51:54for example if you look at a chart i'm
51:56going to bring up my charts
51:58over here you see this is the dollar
52:02the usd against the singapore dollar
52:04this over here
52:05is the bid and this is the ask so as of
52:08right now if i want to
52:10sell the us dollar against the singapore
52:12dollar
52:13i can sell it at 1.34101 and if i want
52:18to buy
52:19u.s dollar against the singapore dollar
52:21right now i will look at this blue box
52:22and i can buy it at one three four one
52:25one five
52:26make sense so there's always two prices
52:28right which is being quoted
52:30in the forex market the bid and the ask
52:34and depending you know what you're
52:35trying to do if you're trying to buy
52:36then of course you will
52:37pay attention and see what's the asking
52:40price
52:40if you're looking to sell if you're
52:42looking to short a currency pair
52:44you will pay attention to what is the
52:46bid price
52:48what is the spread well the spread very
52:50simply is this
52:51is the difference between the bid and
52:54the ask
52:56so let's say for example euro usd is
52:58trading at
52:59one three five zero zero this is the
53:03b and the ask is trading at one three
53:06five
53:06zero one this is the ask so the
53:09difference right
53:10between the bit and ask in this case is
53:12one pip
53:14so this is the spread on euro usd
53:18and now you might be wondering hey right
53:19now you know why does the spread matter
53:21as many what has it got to do with me
53:23well a lot right he has to do a lot with
53:25you
53:26and your own trading and here's why
53:29spread right if you look at it right you
53:30can look at it in the form of
53:32transaction cost in forex trading most
53:35of you probably don't pay commission to
53:36your broker
53:37so your transaction cost is in the form
53:39of a spread so let me explain how this
53:41works
53:42so the higher the spread the higher your
53:44transaction cost and likewise the lower
53:46the spread
53:46the lower your transaction costs and i'm
53:48going to give you an example
53:49so you can see what i mean so let's say
53:51you buy one standard lot of euro usd
53:54and the spread is three pips how much
53:57does a spread cost you in in dollar
53:59terms
54:00so you know as we have you know
54:02discussed earlier one standard lot is
54:04100 000
54:05units 100 000 units
54:08and the value per pip is 10 dollars
54:11so if your spread is three pips
54:14this means right the moment you put on a
54:16trade when you trade one standard lot of
54:19euro this should be usd it's not sure
54:20why it's i okay when you
54:22buy one a standalone of euro usd you are
54:24immediately down
54:2530 on this trade that is
54:28the cost of the spread in terms of us
54:31dollar to you
54:33so if you think about this right what if
54:36the spread
54:37now is one pip can you see how much of a
54:39difference this make
54:41if the spread now is one pip the cost to
54:43you is just ten
54:45dollars see see what i mean by
54:48having a wide spread and a tight spread
54:50the higher the spread
54:52the more expensive your transaction cost
54:53is going to be the lower the spread the
54:55cheaper your transaction cost is going
54:57to be
54:58so now the question is how can you
55:00reduce the cost
55:01of the spread so one thing to point out
55:03is that it's near impossible to you know
55:05tell your broker to give you
55:06a tight spread right because it's pretty
55:09much fixed and there's nothing you can
55:10do about it but what you can do on your
55:12end
55:12is just focus on major currency pairs so
55:16as mentioned earlier major currency
55:17pairs these are the most
55:18popular currency pairs that are actively
55:20traded in the world and if you look at
55:21their spread right they are
55:23usually right smaller tighter than the
55:25other currency pairs like the exotic or
55:27even the uh
55:28the uh cross currency pair so let me
55:31share this with you and you can see over
55:32here i'm going to pull up trading view
55:35if you look at our daily time frame and
55:37in case you guys are wondering right
55:38this platform is trading view it
55:39provides uh charting services in case if
55:41you need it
55:42so if you look at euro usd you can see
55:44what is the spread right now so for
55:46example
55:46the difference between the bit and us is
55:48actually shown over here in this middle
55:49the spread on euro usd right now is
55:510.2 pips if you look at pound dollar
55:54the spread now is about 0.3 it's moving
55:57you know up and down just pay attention
55:59to this
56:00portion here about 0.5 and if you look
56:02at aussie against the dollar it's about
56:040.23
56:050.2 right now but what if you look at
56:07other currency pairs maybe you look at
56:09you know something like the cross
56:10currency pair like
56:11pound new zealand the spread here is now
56:131.2
56:14if you look at something exotic like
56:16dollar against the turkish lira is 66.3
56:19pip so you can see right
56:20if you want to have you know lower
56:22transaction costs all right focus on
56:23major currency pairs the spreads are
56:25usually
56:26tighter usually lower and
56:29another thing that you can do is to
56:30trade the higher time frame so the cost
56:32of your spread is lower in terms of
56:34percentage so let me explain what this
56:36means
56:38so let's say you have one pip spread
56:41with a five pips stop loss if you think
56:43about it right your
56:45spread is 20 right of the size of your
56:48stop-loss so let's say if your stop-loss
56:50is five
56:50pips your spread is one pip right the
56:53spread as a function of your stop-loss
56:55eats up about 20 of it so this means
56:57right in essence your stop-loss is only
56:59four pips if the market moves four peeps
57:01against you you are going to get stopped
57:03out of your trade
57:04on the other hand if you have a one-pip
57:06spread but your stop-loss is
57:08100 pips and the reason why you can
57:10afford a hundred pip stop loss is
57:12because you're trading off the higher
57:13time frame
57:14you have a wider stop-loss right because
57:15you're trading on a higher time frame in
57:17this case the one pip spread is only one
57:19percent
57:20of the size of your stop-loss so in
57:22terms of cost it's only one percent
57:24of the size of your stop loss so you can
57:26see that in the way right your
57:28spread right you're paying or rather a
57:30percentage of your stop-loss is smaller
57:32when you have a wider stop-loss and to
57:34have a wider stop-loss is usually
57:36because you are trading off the higher
57:37timeframe and if you think about this if
57:39you trade on a five minutes chart on the
57:4015 minute chart
57:41the price action right the way the
57:43candle moves up and down right the range
57:45is usually
57:45smaller compared to trading off the
57:47daily time frame where the range is much
57:48larger so when you are trading off the
57:50higher time frame with a larger range it
57:52makes sense to have a wider stop-loss to
57:54accommodate right
57:55the largest swings on that time frame so
57:57this is why if you trade off the higher
57:58time frame
57:59your stop-loss is usually wider and if
58:01your stop-loss is
58:02wider you will realize that this spread
58:04right as a function of your stop-loss
58:06right in terms of
58:07percentage is usually lower compared to
58:09you know let's say you trade off the one
58:10minute or five minutes time frame
58:12the spread as a function of your
58:13stop-loss right is usually
58:15wider and you're gonna you know end up
58:16pay more in transaction costs
58:20so let's do a quick recap number one the
58:22spread is the difference between the
58:23beat and ask
58:24the bid is the price that you can sell
58:26it the ask is the price that you can
58:29buy at number two the lower the spread
58:31the lower
58:32your transaction cost and finally if you
58:34want to reduce the cost of the spread
58:36what you can do is to focus on the major
58:37currency pairs
58:38or trade off the higher time frames
58:41hey hey what's up my friend man i miss
58:44saying that because you know
58:45these videos actually they're all done
58:47separately and then stitch up together
58:48because
58:49if i were to say hey hey at the start of
58:51every section right you're gonna get
58:53irritated by me
58:54so anyway welcome back uh in this
58:56section you will learn
58:58the different types of forex traders
59:01and you know let me explain so there are
59:04different types of forex traders out
59:05there
59:05you can classify them as short-term
59:07traders medium-term traders and
59:09long-term traders so let's analyze you
59:10know
59:11uh what are the differences right
59:12between these type of traders number one
59:14short-term traders
59:16so for term traders right your time
59:18frame it's usually below the one hour
59:20time frame you will likely operate on
59:21the five minutes 15 minutes time frame
59:24your potential target in terms of pips
59:25right you're usually aiming anywhere
59:27between five
59:28to 50 pips and your holding time it's
59:30usually
59:31less than three days and one thing to to
59:33share is that whatever i'm sharing with
59:34you is just
59:35general guidelines it's not really cast
59:37in stone because short-term traders
59:38there are some
59:39really really short-term traders like
59:40scalpers who can be in a trade for just
59:42a few minutes
59:43and then you have some short-term
59:44traders traders which are slightly
59:46longer which could be under day traders
59:48where they could hold their trade for a
59:49day or two so what i'm sharing here is
59:50just
59:51uh a general guideline right to to take
59:53into consideration
59:55next one medium term traders so these
59:56are the type of traders who trade
59:58between the one
59:59and four hour time frame their potential
1:00:01target is usually anywhere between
1:00:0250 to 200 pips and they can hold their
1:00:05trades anywhere between three
1:00:07to 10 days and finally you have the
1:00:09long-term trader
1:00:10who trades right the four-hour time
1:00:12frame and above could be the four hour
1:00:14eight hour daily
1:00:15or even the weekly time frame then their
1:00:17potential target is usually you know
1:00:18more than 200 pips on each trade that
1:00:20they are aiming for
1:00:21and they can hold their trades you know
1:00:23for 10 days or more weeks or even
1:00:25months so a super quick recap this is a
1:00:29fast
1:00:29section right so you have short term
1:00:31traders medium term traders and long
1:00:33term traders and personally for me i'm a
1:00:35medium to long term trader so
1:00:37the key here right to share with you is
1:00:38to get you to understand the different
1:00:40type of
1:00:41trading time frames that you can be on
1:00:42and to find a type of trading style that
1:00:45suits you are you more towards
1:00:46short-term trading medium-term trading
1:00:48or long-term
1:00:48long-term trading and the only way to
1:00:50find out is to through trial and error
1:00:52right you know
1:00:52trading across the different time frames
1:00:54to see what works for you and also
1:00:55another thing is time commitment
1:00:57plays a part because if you have a
1:00:59full-time job it's unlikely that you can
1:01:00be a short-term trader because
1:01:01you just can't afford to be glued in
1:01:03front of the screen right all day to
1:01:04watch the markets while having a
1:01:05full-time job
1:01:06so probably i'll say medium term to
1:01:08long-term trading would suit you best
1:01:10but on the other hand let's say you are
1:01:11a someone who is very free
1:01:13uh you have a lot of time and you have
1:01:15you know interest in short-term
1:01:17day trading then hey you know maybe that
1:01:18is something for you but ultimately you
1:01:20have to explore experiment trial and
1:01:21error
1:01:22to see which type of trading approach
1:01:24would suit you
1:01:25best
1:01:30boom boom shakalaka hi my name is raynor
1:01:34pleased to meet you all right stop stop
1:01:36messing around so in this section right
1:01:37you will
1:01:38learn number one what is technical
1:01:39analysis what is market structure
1:01:41what is an area of value what is an
1:01:43entry trigger and more importantly
1:01:45how do you use technical analysis in
1:01:48your trading so let's get started
1:01:50so first thing first what is technical
1:01:52analysis so i define technical analysis
1:01:54as using past
1:01:55data to help you make your trading
1:01:58decisions and this past data could be
1:01:59things like volume indicators chart
1:02:01patterns candlestick patterns etc
1:02:03and of course right technical analysis
1:02:05is not the only way to treat the markets
1:02:07because you also have things like
1:02:08fundamental analysis
1:02:09sentiment analysis but me primarily i'm
1:02:12a technical trader so this is why in
1:02:13this video
1:02:14i would focus more on technical analysis
1:02:16and i want to share with you
1:02:17the three things right that you should
1:02:19focus on right when you kick-start this
1:02:21trading career of yours so technical
1:02:23analysis all right i would say there are
1:02:24three
1:02:24components which is very important to
1:02:26master the first component here
1:02:28is what i call market structure so
1:02:30here's the thing right when you look at
1:02:31the price chart
1:02:33the the first thing that comes to your
1:02:35mind should be no
1:02:36hmm should i be buying should i be
1:02:39selling or should i stay out of the
1:02:40market that's really the first
1:02:41thing that should come to your mind you
1:02:43shouldn't you know look at the chat and
1:02:43say oh let me buy now oh let me sell now
1:02:45no
1:02:45you should first ask yourself is this
1:02:47the type of price action is this
1:02:49chart telling me that i should be
1:02:50looking for buying opportunities
1:02:53or selling opportunities or maybe i
1:02:54should stay out completely of this
1:02:55market this is the first
1:02:56question right that you must answer and
1:02:59everything else right is secondary
1:03:00so the way to do that right is market
1:03:02structure helps you to answer this
1:03:03question it tells you what to do
1:03:05so market structure helps you to define
1:03:07the current market condition so you know
1:03:09whether to be buying selling or staying
1:03:12out of the market so let's dive
1:03:13a little bit deeper into market
1:03:14structure so market structure there are
1:03:16different types of market structure but
1:03:17for this video i will share with you
1:03:19three broad categories of market
1:03:20structure number one being
1:03:22an uptrend if you know a stock or sorry
1:03:25a market is in an uptrend not
1:03:26necessarily stock can be currency pairs
1:03:28etc you want to look for
1:03:30buying opportunities so let me explain
1:03:32to you what an uptrend is
1:03:33so in the grand scheme of things grand
1:03:35scheme of things an uptrend
1:03:37forms a series of higher highs and
1:03:40higher lows so it looks something like
1:03:41this
1:03:42market goes up but as you know market
1:03:43doesn't go up you want straight line he
1:03:44goes up he needs to take a breather it
1:03:46needs to pause and then he makes a
1:03:47pullback
1:03:48then once the pullback ends he will
1:03:50continue up higher breaking above this
1:03:52previous swing high this previous high
1:03:54if you want to call it and goes up again
1:03:56it doesn't go up in one straight line
1:03:57you need to take a breather
1:03:58pause once it pause once it rests
1:04:01finished and then it continues up higher
1:04:03breaking out above the previous swing
1:04:04high again and then the pattern rings
1:04:06repeat itself
1:04:07so when you look at this you will notice
1:04:08that an uptrend consists of
1:04:10a series of higher highs and higher low
1:04:12look at this high
1:04:13another higher high a cluster disc as
1:04:16one and another higher high
1:04:18if you look at the lows it's a higher
1:04:20low
1:04:21higher low high low okay had to do that
1:04:25so this is what i mean by an uptrend a
1:04:27series of higher highs and higher lows
1:04:29and if you see a market has this
1:04:32market structure this currency pair has
1:04:33this market structure then what you want
1:04:35to do
1:04:35well you want to look for buying
1:04:37opportunities because the market is in
1:04:39an uptrend the path of least resistance
1:04:41is higher so this is why you want to be
1:04:42looking for buying opportunities so if
1:04:44you see a chart that looks like this
1:04:46tell yourself promise me you will only
1:04:48look for buying opportunities right you
1:04:49don't want to look for
1:04:50selling opportunities not they can be
1:04:52done they are traders who specialize in
1:04:53counter trend trading but for you
1:04:55the beginner is much easier to be
1:04:57trading along the path of least
1:04:58resistance
1:04:59trading in the direction of the trend
1:05:01then against it okay so uptrend look for
1:05:03buying opportunities
1:05:05next one downtrend this is just a
1:05:07reverse you want to look for selling
1:05:08opportunities
1:05:09so downtrend right in essence is a
1:05:11series of lower highs
1:05:12and lower low so market hits down lower
1:05:14makes a pullback
1:05:16heads down lower again breaking below
1:05:18the previous low
1:05:19makes a pullback heads down lower
1:05:21breaking the previous low
1:05:22sometimes it could consolidate and then
1:05:24break down lower once again breaking
1:05:25below the
1:05:26previous swing low so if you look at it
1:05:30you will notice a series of lower high
1:05:32lower high
1:05:34lower high and lower low
1:05:37lower low lower low so if you see a
1:05:40market is in a downtrend
1:05:42then what should you be doing buying or
1:05:44selling
1:05:45well the path of least resistance is
1:05:47towards the downside so promise me when
1:05:49you see a chart that's in a downtrend
1:05:51you only
1:05:52think of selling opportunities okay
1:05:54that's the path of least
1:05:56resistance and finally you have what we
1:05:58call
1:05:59a range market and in this market
1:06:00condition you can know be both a buyer
1:06:02or seller so a range market looks
1:06:06something like this
1:06:07price is contained between the highs and
1:06:09the lows so
1:06:10when a market is in a range right you
1:06:11can look for both buying and selling
1:06:14opportunity and one thing to point out
1:06:15is again how do you know a market is in
1:06:17range is where
1:06:18you see the the highs of the range right
1:06:20the price just keep testing it right but
1:06:21unable to break out higher compared to
1:06:23an uptrend the price is able to break
1:06:24above the previous swing high it's able
1:06:26to break above the highs
1:06:27but in the range it's just you know
1:06:28getting rejected at the highs
1:06:30consistently over here same for the the
1:06:33lows of the range it just cannot break
1:06:34down lower
1:06:35it's just you know contain uh above the
1:06:38lows
1:06:38of the range so you can think like the
1:06:40price right it's being trapped like in a
1:06:41in a big giant box just can't
1:06:43get out of it so with that said let's
1:06:46have a look at a few
1:06:46chart examples so you know how this
1:06:48looks like because one thing to
1:06:50to know is the theory is one thing but
1:06:53when you
1:06:54look at the live charts the market it
1:06:56can look completely different out of
1:06:57whack
1:06:58like one is in in uh one is in heaven
1:07:01and one is on earth so it's going to be
1:07:02quite different so i want to
1:07:04walk through with you right when you
1:07:05look at the chart so if you look at this
1:07:07chart new zealand against the swiss
1:07:08franc this is the daily time frame as
1:07:10you can see over here
1:07:11on the daily chart what market structure
1:07:13is this
1:07:14well if you notice this this market in
1:07:16the grand scheme of things is forming a
1:07:17series of higher highs
1:07:19and higher lows higher high higher high
1:07:22higher high
1:07:23higher high higher high and higher low
1:07:26higher low higher low high low high yeah
1:07:29low there's another minor one over here
1:07:31okay so yeah so we can see that in the
1:07:33grand scheme of things
1:07:34in a big picture if you look from left
1:07:37left to right this market is
1:07:38heading higher it's in a uptrend and if
1:07:41a currency pair if a market is in an
1:07:43uptrend
1:07:43what should you be doing looking for
1:07:45buying opportunities or selling
1:07:47opportunities
1:07:48i'm sure you got the answer okay so
1:07:49let's have a look at
1:07:51another one dollar against canadian
1:07:55okay so if you look at this again this
1:07:56pair just identify the highs and lows on
1:07:58the chart this is the highs
1:08:00the highs the highs highs highs the
1:08:03highs
1:08:03the highs and the low the low low low
1:08:06low low and low so you look from left to
1:08:09right
1:08:10where is this currency pair heading over
1:08:11time it's heading down
1:08:13lower so in other words you can see that
1:08:15the us dollar is depreciating against
1:08:17the canadian dollar
1:08:18over you know over the last there's a
1:08:20number of months over here that you see
1:08:22at the bottom
1:08:22okay so this is in the downtrend and one
1:08:24thing to also share is that
1:08:26when you look at a chart right there are
1:08:28many swing points what i call a swing
1:08:30point is
1:08:30the heights and lows on the chart that
1:08:32kind of stick out like a sore thumb
1:08:33which is very obvious like you know this
1:08:35is a swing high
1:08:35this is a swing high i wouldn't consider
1:08:37this a swing high because this isn't as
1:08:39obvious this isn't as
1:08:40in your face kind of thing so when you
1:08:42want to identify the series of higher
1:08:44highs and higher lows on the chart pay
1:08:45attention to the swing points the ones
1:08:47that really
1:08:47stick out like a sore thumb right the
1:08:49minor ones you can just pretty much
1:08:50ignore it because if you
1:08:52try to pay attention to every single
1:08:54minor highs and lows on the chart
1:08:56you will get confused right and lose the
1:08:58big picture so for example let's say you
1:08:59look at this over here
1:09:01you might look it's oh it rainer the
1:09:03price you know broke out of the
1:09:04the uh there's high man you know this
1:09:07looks like an uptrend
1:09:08so i know it sounds silly but you know
1:09:10sometimes when you get too
1:09:12fixated on trading in the now you might
1:09:14actually think along those lines so just
1:09:15remember
1:09:16pay attention to the major swing points
1:09:18if you're unsure and look from left to
1:09:19right
1:09:19left to right don't just look at the
1:09:22last five six candle loops
1:09:23look from look at the big picture
1:09:24perspective bird eyes view that is
1:09:26important
1:09:26okay so dollar against the canadian we
1:09:28can both agree that this is
1:09:30in the downtrend moving on british pound
1:09:32against canadian
1:09:33dollar in this case i'll go to the
1:09:34weekly time frame okay
1:09:36and you can see over here what is this
1:09:39market condition and oh yeah before i
1:09:40continue
1:09:41dollar against the canadian daily time
1:09:44frame
1:09:44okay in this current market structure
1:09:46what do you want to be doing buying or
1:09:48selling
1:09:48i'm sure you want to look for selling
1:09:50opportunities that's the path of
1:09:52lease resistance next one pound against
1:09:55canadian so if you look at this one
1:09:58again what is
1:09:59this market structure well you can see
1:10:01that this one's a little bit different
1:10:02it's a bit different from the earlier
1:10:03ones
1:10:04this market seems to be contained
1:10:06between this highs
1:10:08and this lows we'll talk more about this
1:10:10exact highs
1:10:11and lows what is the terminology and how
1:10:13we can use them in your trading
1:10:14later on but for now just pay attention
1:10:16that this market is kind of
1:10:17contained in in a box stuck between the
1:10:20highest and the lows and this is what we
1:10:21call
1:10:21a range market and in a range market you
1:10:24can look to buy low and sell high buy
1:10:25near this low
1:10:26or sell near this high but personally
1:10:29for me i like to trade
1:10:30trends okay but i still want to share
1:10:31with you what the range market looks
1:10:32like because hey some of you might go on
1:10:34to be you know
1:10:34pro range traders in future but for me
1:10:36personally i simply like to trade trends
1:10:38buy in uptrend and sell in downtrend so
1:10:41but nonetheless this is what we call a
1:10:43range market you can look to buy
1:10:45near the lows and sell near the highs
1:10:48and one a couple of more examples you
1:10:51can see is on
1:10:51british pound against the us dollar what
1:10:54is this market structure
1:10:56so again if you look at this this
1:10:58overall seems to be
1:10:59in an uptrend right series of higher
1:11:02highs higher highs
1:11:03higher highs and higher lows higher low
1:11:06higher low higher low higher low
1:11:09and possibly this higher low so you can
1:11:11see that you know
1:11:12this right if you are again too fixated
1:11:15in the now you might think that
1:11:17ah rainer this looks like you know a a
1:11:19downtrend man look rainer
1:11:20this market has made a lower high and a
1:11:23lower low this market is in the
1:11:25downtrend
1:11:25yes i get it right if you look at just
1:11:27those few candles right you
1:11:29uh you can think that it's a downtrend
1:11:31but you let's take a step back and look
1:11:33from left to right again
1:11:34you want to make sure that you are
1:11:36taking a bird eyes view and not just
1:11:38looking at
1:11:38an individual tree and missing the
1:11:40forest this is a mistake that i want you
1:11:42to make so if you look from left to
1:11:43right you can see
1:11:44that this market overall is in an
1:11:46uptrend okay so this will be
1:11:48a swing the next or rather the swing low
1:11:51that is pretty much still intact if the
1:11:53market right can break below this
1:11:55low and this low over here then hey then
1:11:57maybe you know you can see that this
1:11:59up trend is getting weak right maybe the
1:12:00trend is starting to reverse but again i
1:12:02don't you know
1:12:02take things too far out of hand because
1:12:04that is where we go into more advanced
1:12:06technical analysis but for now
1:12:08looking at the big picture i would say
1:12:09the pound against the us dollar looking
1:12:11from left to right this market is in an
1:12:13uptrend
1:12:13and i'm looking for buying opportunities
1:12:15and don't worry you know about you know
1:12:16hey where to buy how much to buy when to
1:12:18buy we'll cover all that stuff later on
1:12:20now just focus on this market structure
1:12:24and what's one last final example is
1:12:26euro against
1:12:27the us dollar so if you look at this
1:12:29this market
1:12:30is it in an uptrend or is it in a
1:12:34range so you can see that you know
1:12:37this chart i purposely picked this one
1:12:39up because
1:12:40when you deal with technical analysis
1:12:42there is subjectivity involved and if
1:12:43you say
1:12:43this is an uptrend some traders are
1:12:45going to say this in a range i won't say
1:12:47anyone is right or wrong because it's
1:12:48kind of like in between
1:12:49the it's kind of like in between okay so
1:12:51personally i'll say
1:12:52that this market is more towards the
1:12:54range right given this uh
1:12:56price chart that i'm looking at right
1:12:57now this would be the lows of the range
1:13:00and this is the high even though this
1:13:02high is just tested one time
1:13:03some might argue not right now this is
1:13:04an uptrend or higher high high low
1:13:06fine that's your point of view so this
1:13:07is why as a discretionary trader as a
1:13:09technical trader
1:13:10there is always you know someone with an
1:13:11opposing view of your so
1:13:13and one thing to also point out is that
1:13:15if a chart doesn't speak up to you if
1:13:17the chat right makes you feel confused
1:13:19and frustrated and you do not know what
1:13:20to do
1:13:21remember you always have the option to
1:13:22stay out of the markets
1:13:24move on on to something else no one is
1:13:25pointing a gun in your head hey
1:13:26everybody put on a damn trick man
1:13:28no no one is doing that so if it's not
1:13:30clear if it's conflicting information
1:13:32move on onto another currency pair does
1:13:35it make sense
1:13:37now moving on number two area of value
1:13:39so you've learned right what is market
1:13:41structure earlier if the market is in an
1:13:43uptrend
1:13:44you want to look for buying
1:13:45opportunities but here's the thing just
1:13:46because a market
1:13:47is in an uptrend doesn't mean you
1:13:48blindly hit the buy button no because
1:13:51the trend right could be about to make a
1:13:53reversal it could could be about to make
1:13:54a pullback so this is why
1:13:56you want to look for this next second
1:13:57thing an area of value so this is like
1:13:59you know going on a date with a girl for
1:14:01the first time
1:14:01doesn't mean you go on a date once
1:14:03you're gonna marry her because you don't
1:14:04not know what type of person is she does
1:14:05she really like you do you really like
1:14:07her
1:14:07you know you need more confirmation and
1:14:09it's the same for trading we're looking
1:14:10for more confirmation to give us
1:14:12clue that this is a good time to enter
1:14:15into an uptrend okay so the second thing
1:14:18is what i call
1:14:19an area of value so this in essence
1:14:22right tell you
1:14:23tells you right where to buy or sell so
1:14:25market structure previously it tells you
1:14:26what to do
1:14:27should you be looking for buying
1:14:28opportunities or selling opportunities
1:14:30but it doesn't mean
1:14:31hit the buy button no you are only
1:14:32looking for opportunities
1:14:34whether to buy or sell for this one it
1:14:37tells you
1:14:39where to buy or sell the key word here
1:14:41is where where on the chart to buy
1:14:42yourself so area of value
1:14:44really is about this to help you
1:14:46pinpoint the area on your charts to look
1:14:47for
1:14:48trading opportunities and to to look for
1:14:51areas of value on your chart there are
1:14:52numerous tools that you can use but for
1:14:54me personally
1:14:55i use support resistance and moving
1:14:57average often and so this is the two
1:14:59things
1:14:59the two tools that i want to share more
1:15:01with you so support and resistance
1:15:03otherwise known as sr
1:15:04so what is support and resistance so
1:15:06here's my definition of it so support is
1:15:09an
1:15:09area on your chart where buying pressure
1:15:12could step in i didn't say mass right
1:15:14because in trading
1:15:16nothing is guaranteed trading is all
1:15:17about probabilities never a certainty so
1:15:19it's an
1:15:19area on your chart where buying pressure
1:15:22could maybe
1:15:23come in to push the price higher so it
1:15:25looks something like this let's say
1:15:26market is in the range
1:15:28so support is at near the lows of this
1:15:31range this is what we call
1:15:32support right where buying pressure came
1:15:34in and pushed the price up higher
1:15:35buying pressure came in push the price
1:15:37up higher
1:15:39support this year buying buyers came in
1:15:41and pushed the price up higher so let's
1:15:42say now price is at support
1:15:43what's gonna happen go up no it could
1:15:46also go down okay so this is why i say
1:15:48that
1:15:48it's an area on your chart where buying
1:15:50pressure could step it
1:15:53so next resistance this is an area on
1:15:56your chart where
1:15:57selling pressure could step in so again
1:16:00this is an
1:16:01area of resistance over here where the
1:16:03price came up
1:16:04hit down lower went up kept down lower
1:16:06went up
1:16:07and what happens came down lower so
1:16:10again anything can happen
1:16:11in markets it can go up it can break out
1:16:13of resistance or it can
1:16:14face selling pressure resistance and
1:16:16then reverse down lower once again so
1:16:17this is why
1:16:18the word is could could step in so now
1:16:21that you understand what is support and
1:16:22resistance
1:16:23so in essence right support is where
1:16:25buyers could come in and push the price
1:16:26up higher
1:16:27resistance is an area on your chart
1:16:29where sellers could come in and push the
1:16:31price down
1:16:31lower and another thing to add is that
1:16:35when support is broken it tends to
1:16:37become or it could
1:16:38become resistance so let's say this is a
1:16:40port
1:16:41okay so support support support right
1:16:44previous support
1:16:45could now become resistance right where
1:16:47fights where price could face selling
1:16:49pressure and then continue
1:16:50lower down for from here and vice versa
1:16:53if
1:16:53resistance is broken that area could now
1:16:57become
1:16:57support let's say this is resistance up
1:16:59down up
1:17:00down up down up break out come back
1:17:03previous resistance resistance
1:17:05resistance could become support and the
1:17:08price could
1:17:08possibly heat up higher from here so let
1:17:11me share with you
1:17:12a few charts so you can kind of like let
1:17:13this concept sink in to your head so
1:17:16first one here is pound canadian
1:17:19so if you look at this uh weekly time
1:17:21frame chart which i've marked you can
1:17:23see
1:17:23where is your support and resistance
1:17:25area support right tested once twice
1:17:27three times four times
1:17:28the resistance that's the ones over here
1:17:31and this is why i said it's an area on
1:17:32your chart if you look at this over here
1:17:33the price didn't respect
1:17:35this level to the peak in fact you break
1:17:36out people thought it's a breakout and
1:17:38then came back collapsed back into the
1:17:40range
1:17:40once again okay so if another
1:17:43one over here almost touching almost
1:17:45touching it broke out
1:17:47went back in the range again and then
1:17:49this was almost near to the pit and then
1:17:50went back into the range again so this
1:17:52is why we are dealing
1:17:53with an area but the reason why i draw
1:17:54support resistance as lines is because
1:17:57it's my habit it's something that i've
1:17:59been so used to doing but if you don't
1:18:00want
1:18:01to uh to to face this problem of you
1:18:05know treating this as
1:18:06a a line or whatsoever you can use a
1:18:09tool right i think it's called the
1:18:10rectangle
1:18:11tool to make your life easier this one
1:18:14over here
1:18:15so what you can do is just you know
1:18:16treat this as a box and area you can
1:18:17just draw it
1:18:18like this like an area if that makes
1:18:20your life easier same for this one over
1:18:22here right
1:18:23draw it like this to kind of know better
1:18:25interpret it but again
1:18:26as i've said right my preference is to
1:18:28use a line but if you think a box method
1:18:30would make more sense for you feel free
1:18:32to go ahead
1:18:33next one platinum so in this one i want
1:18:35to share with you the eight hour time
1:18:36frame so you can see over here
1:18:37the concept that i've shared earlier
1:18:40resistance right tested once tested
1:18:41twice
1:18:42almost three times fourth time here
1:18:44fifth time then price breaks out
1:18:46if price breaks out of resistance what
1:18:48could possibly happen previous
1:18:50resistance could become
1:18:52support buyers could possibly step in
1:18:54here right to push the price up higher
1:18:56in this case it did
1:18:57happen one more example or rather a
1:19:00second last example this one here is
1:19:02euro against the aussie dollar
1:19:04this is an area of support tested once
1:19:06tested twice came back here
1:19:08consolidate a little breakdown re-test
1:19:11previous support becomes resistance
1:19:13head down lower re-test this same area
1:19:15of resistance
1:19:16and then continue to grind kind of lower
1:19:19around here
1:19:19so again this is how support resistance
1:19:21looks like on your chart and again i
1:19:23didn't draw the full thing i just wanted
1:19:24to point
1:19:25out the obvious one to share with you
1:19:26the concepts that i've mentioned but
1:19:28really if you want to draw another one
1:19:29i'll say this would be another level
1:19:30that you could look at this heist over
1:19:32here
1:19:34okay and one final example this one here
1:19:36is a bitcoin
1:19:38just to illustrate to you that you know
1:19:39hey the concepts that i'm sharing with
1:19:40you are can be applied to uh
1:19:42different markets as well so if you look
1:19:44at this one over here
1:19:46can you see this area of support okay
1:19:49tested almost here almost the first time
1:19:52second
1:19:52third fourth fifth then what happened
1:19:54price broke
1:19:56below support okay broke down great
1:19:59so as you know right if price breaks
1:20:01below support what could happen
1:20:03previous support could become resistance
1:20:07which happened over here previous
1:20:08support price breakdown
1:20:10became resistance and again support
1:20:12resistance they are an area on your
1:20:13chart so this is why
1:20:15you shouldn't expect the price to reach
1:20:17a particular
1:20:19dollar amount or exact same right and
1:20:20reverse from there no it's an area
1:20:22it could exit by a lot it could exit by
1:20:24a little bit or you can undershoot it
1:20:25right doesn't even touch it and then
1:20:27reverse from there
1:20:27okay so you can see what happened next
1:20:29right for bitcoin price continues down
1:20:30lower and it retains right it's going to
1:20:33retest this area of resistance
1:20:34and watch what happens it didn't respect
1:20:38this this area that we had drawn out
1:20:40earlier in fact it
1:20:41went deeper right to re-test almost this
1:20:43highs over here so you can see i just
1:20:45pulled it back out
1:20:46okay so now so at this point right
1:20:47support resistance it's kind of fluid
1:20:49it's dynamic you have to
1:20:50make adjustments to it from time to time
1:20:52so if i want to look at this chart right
1:20:53now
1:20:53okay i wouldn't leave my line on my area
1:20:56of resistance here i might shift it up
1:20:57higher
1:20:58right to take into account right the
1:20:59recent price move so this one now would
1:21:02make more sense because they tested this
1:21:03one here once and twice over here
1:21:05so let's see what happens next then
1:21:07price i'm going to zoom out a little bit
1:21:09price then re-test this for a third time
1:21:12over here and then it
1:21:15finally broke out so price has broke out
1:21:17of resistance so as you know if price
1:21:19breaks out of resistance
1:21:20what could possibly happen previous
1:21:23resistance could become
1:21:25support right previous resistance could
1:21:27now become
1:21:28support buyers could possibly step in
1:21:31could step in
1:21:32and push the price up higher which he
1:21:34did in this case and of course all these
1:21:35charts are cherry picked right just to
1:21:37you know
1:21:37make sure that the teachings the
1:21:38concepts that i'm teaching you right are
1:21:40crystal clear in the
1:21:41real world of trading right there are
1:21:42things that often things will not go
1:21:44away and
1:21:45you know you have to be prepared for it
1:21:47[Music]
1:21:49okay so in this section right it's about
1:21:52entry trigger so let's do a quick recap
1:21:54what you've learned so far so so far you
1:21:56have learned about market structure it
1:21:57tells you
1:21:58what to do should you be looking for
1:21:59buying opportunities selling
1:22:01opportunities or to stay out of the
1:22:02markets
1:22:03there we covered about area of value
1:22:04there are two things we covered in area
1:22:06of value
1:22:06support resistance and moving average
1:22:08and these are tools that you can
1:22:10use right to tell you know where to buy
1:22:12or sell so
1:22:13market structure tells you what to do
1:22:15area of value tells you
1:22:16where to buy or sell and now we're
1:22:18moving to the third component entry
1:22:20trigger this tells you
1:22:22when to buy or sell okay so
1:22:26entry trigger there are many ways you
1:22:28know you can
1:22:29use the many tools out there to help you
1:22:31time the market but what i find
1:22:32personally to be very useful is
1:22:33candlestick
1:22:34patterns and i want to dive deeper into
1:22:36this section since i find it so
1:22:38useful so what is candlestick pattern so
1:22:42candlestick patterns is a method of
1:22:43reading a price chart of course it's not
1:22:45the only way you have bar chart you have
1:22:47line chart of all the different types of
1:22:48chart out there
1:22:49so candlestick pattern is just one of
1:22:51the methods to read the price chart and
1:22:52it's obviously one of the more popular
1:22:54approaches
1:22:54so how do you actually read a
1:22:56candlestick pattern one thing to
1:22:57understand is that there is four data
1:22:59points for every candlestick pattern
1:23:01you have the opening price the closing
1:23:04price
1:23:05and the high and low of the session so
1:23:07if your candlestick pattern is let's say
1:23:09on the
1:23:10one hour time frame then what you'll see
1:23:12is that the highest
1:23:13price point over the over the last one
1:23:15hour and the low
1:23:16is the lowest price point over the past
1:23:18one hour so a little bit more about
1:23:20candlestick patterns is that you can use
1:23:22it
1:23:23to trade different time frames so for
1:23:26example if you see a candlestick pattern
1:23:28on the one hour time frame it simply
1:23:29means that on a one hour time frame
1:23:31every one hour a new candle is formed if
1:23:33it's on the four hour time frame every
1:23:35new candle is formed
1:23:36every four hours and if you're on the
1:23:38daily time frame one candle is formed
1:23:39every single day
1:23:41same for the weekly monthly same concept
1:23:43so now let me explain you know
1:23:45how to actually read a candlestick
1:23:47pattern so you'll see
1:23:48primarily two types of candlestick
1:23:50pattern one is green and one is red
1:23:52but let's talk about the green one first
1:23:54so remember i said that there are four
1:23:56data points so how do you actually know
1:23:59know where the four data points so very
1:24:01simple for green candle it simply means
1:24:03right that the price has closed
1:24:05above right the opening price so let's
1:24:07say this is like a one hour candle okay
1:24:09let's say this is a one hour candle
1:24:10so what it tells you that the price
1:24:12right has closed
1:24:14right higher than where it was one hour
1:24:16ago so that's why it's great right he
1:24:18has closed higher
1:24:19you know compared to where it was at the
1:24:21opening price one hour ago so that's why
1:24:23it's great so the opening price
1:24:24will be at here and the closing price
1:24:28will be here this is the only way for
1:24:30the closing price to be above the
1:24:31opening price the closing price has to
1:24:32be higher than it so that's why it's
1:24:33green
1:24:34it's bullish so the opening price was
1:24:36once again over here at this line
1:24:38and over here is the closing price we'll
1:24:40add in some numbers later on so you can
1:24:42see how it all makes sense
1:24:43so what about here this simply means is
1:24:45the highest price point over the last
1:24:47one hour if you're on the one hour time
1:24:48frame
1:24:49and this is the lowest price the market
1:24:51has win right
1:24:53during the past one one hour right is
1:24:56the lowest price point so this is the
1:24:57high highest price point over the past
1:24:59one hour
1:25:00and the lowest price point over the past
1:25:02one hour of course if we change this to
1:25:03a different time frame to the eight hour
1:25:05time frame the
1:25:05daily timeframe concept is the same so
1:25:07let's say we try the weekly time frame
1:25:10let's take another one hour the weekly
1:25:11time frame so what does it mean it means
1:25:13that
1:25:13at this price point of the candle that
1:25:15is the highest price point right
1:25:18over the week over the past one week and
1:25:21this is the lowest price point over the
1:25:22past one week over here
1:25:23and this is the opening price of the
1:25:24week and this is the closing price of
1:25:26the week so same same concept
1:25:29so now what about great candle so this
1:25:31is just the inverse so if you recall
1:25:33this over here was the closing and this
1:25:35is the opening
1:25:36so the closing price is higher than the
1:25:38opening price that's why it's bullish
1:25:39that's why it's green
1:25:40but for a rate candle it simply means
1:25:41that the closing price is below
1:25:44the opening price i repeat right the
1:25:46closing price is below
1:25:47the opening price for a rate bearish
1:25:49candle so your closing price has to be
1:25:51here
1:25:52see and over here is your opening price
1:25:54that's the only way right for this
1:25:55candle to close lower
1:25:56is if the closing price is below the
1:25:58opening price and likewise over here
1:26:01is the highest and this is the lows
1:26:03exactly the same
1:26:05concept so if i do you know piece all
1:26:06this together you will have a chart that
1:26:08looks like this
1:26:10okay this is what i just said earlier so
1:26:12a little bit more uh
1:26:13so-called technical definition if you
1:26:15want so we call this color thing the
1:26:17body
1:26:18and this this line over here we call
1:26:20this the
1:26:21upper wick or upper shadow whichever you
1:26:23know whichever term that you prefer
1:26:25there's no right or wrong over here and
1:26:27this is what we call the lower wick
1:26:29or lower shadow okay so this is how you
1:26:32read a candlestick
1:26:34pattern now moving on let's let me
1:26:37let me share with you how it looks like
1:26:39right on a real chart and how you
1:26:41interpret it
1:26:43so i'm going to look at this uh
1:26:46currency pair let's look at the daily
1:26:47time frame this is aussie against the
1:26:49japanese here and i'm going to zoom in
1:26:50so you can see what
1:26:51so we are on the same page so you can
1:26:53see over here i am going to
1:26:55i want you to pay attention to these
1:26:57numbers over here right this is the
1:26:58opening price
1:27:00this is the highest price point over the
1:27:01last one day this is the lowest price
1:27:03point over the past one day and this is
1:27:05the closing price
1:27:06and is the percentage change right in
1:27:08pips so this number will move right
1:27:09depending where my mom's cursor is so
1:27:11pay attention
1:27:12so let's look at the most recent one
1:27:13this candle here how do we interpret
1:27:15this so let's interpret this together
1:27:17one by one so for this candle it tells
1:27:19you that this market
1:27:20opened at 83 589 so it opened at this
1:27:23price point
1:27:2483 589 the highest price point for the
1:27:27day is 83.788 which is over here 83.78
1:27:33the low of the day is 83.036 which is
1:27:36here the low of the day
1:27:3783.036 and the closing price for this
1:27:40this uh this market for this day is
1:27:4483.529 which is at this price
1:27:46point over here does it make sense so
1:27:48let's do one more example
1:27:49how about the dollar against the
1:27:51japanese yen okay now we have a green
1:27:52candle
1:27:53so same same thing right for this market
1:27:56the opening price what does it say
1:27:58109.248 this is the opening price 109
1:28:02248 where is the highest price point for
1:28:04the day
1:28:05109.96 109.96
1:28:08where is the lowest price point for the
1:28:10day 109.193
1:28:13over here 109.193 and where is the
1:28:16closing price for the day 109.614
1:28:20109.614 and along the ways you will
1:28:23probably see
1:28:24some candles where they are missing a
1:28:25body man the candle is weird right now
1:28:27where's the body
1:28:28so this is usually when you're opening
1:28:30and closing price are too near one
1:28:32another where you get a very
1:28:33almost a non-existent body kind of like
1:28:35this one here look at this right almost
1:28:37a non-existent body so yeah it happens
1:28:39especially when the opening price
1:28:40and the closing price are very near each
1:28:43other so if you have a look at this
1:28:44right
1:28:44let me just see what the numbers are so
1:28:46you don't freak out
1:28:48so for this candle the opening price
1:28:51uh opening price for this is 103.76
1:28:54and the closing price is 103.75 okay so
1:28:57this is why
1:28:58you can see they are just like a three
1:29:00pipette different 0.3
1:29:02pips different so that's why their body
1:29:05is almost non-existent
1:29:06so this is how you actually read a
1:29:08japanese candlestick
1:29:10chart so moving on right so now you know
1:29:12the basics right how do you actually you
1:29:14know
1:29:14or rather how do you use it to time your
1:29:16entries so to do that right you want to
1:29:18focus or learn a few patterns right to
1:29:21help you do so and there are two
1:29:22patterns
1:29:23or maybe four patterns i want to share
1:29:24with you so first let's talk about the
1:29:26bullish
1:29:26reversal candlestick pattern and
1:29:28understand you know what is it how it
1:29:29works
1:29:30and the story behind it so the first
1:29:32pattern i want to share with you is what
1:29:33we call
1:29:34a hammer so different candlestick
1:29:36patterns they have different names they
1:29:37have hammer harami engulfing you know
1:29:39dark cloud cover and stuff like that so
1:29:40that's really really really a lot out
1:29:42there but i'm not gonna teach you
1:29:43everything because
1:29:44it's not needed right as you progress
1:29:45and learn and grow as a trader you
1:29:47realize that hey
1:29:48most of these patterns are pretty much a
1:29:49variation of one another so i'm going to
1:29:51share with you the most common
1:29:52variations the most useful ones and
1:29:53after which you can go on and explore
1:29:55the other you know patterns out there
1:29:57and of course the basics i've already
1:29:58taught you so
1:29:58you can just you know stack upon what
1:30:00you've learned and to to learn even more
1:30:03so first one is what i call ornate i
1:30:05call it right people
1:30:07you know others out there the
1:30:09technicians call it a hammer so let's
1:30:10understand what
1:30:11hammer is about so again where is the
1:30:13opening price price open over here
1:30:16where is the closing price for green
1:30:17candle the closing price has to be above
1:30:19the opening price
1:30:20so it's here where is the high of the
1:30:22day
1:30:23over here so let's assume that this is
1:30:25the daily candle right the high of the
1:30:26day is here
1:30:27and the low of the day is over here so
1:30:29what's the story
1:30:30of this hammer so it's quite interesting
1:30:31right you can imagine like that for when
1:30:33the market opened
1:30:34over here the sellers they were in
1:30:36control like
1:30:37out of the gate right here like
1:30:38barbara's you know running out the gates
1:30:39and they pushed the market they pushed
1:30:41the price down near the lows
1:30:43of the day then when all the buyers they
1:30:45all defeated all right then somehow
1:30:46rather
1:30:47there's like one tour one captain
1:30:48america from the middle of nowhere
1:30:50shelter
1:30:50vengers assemble and then they all unite
1:30:52and you know push the price up all the
1:30:54way up higher
1:30:55finally closing near the highest of the
1:30:57day so you can imagine that this kind of
1:30:58tuck of four
1:30:59between the buyers and sellers right
1:31:00when market open sellers came in with
1:31:02smash and you know
1:31:03uh push the price all the way down
1:31:05suddenly sometimes in the middle of the
1:31:06day the buyers they woke up right they
1:31:08assemble the united and they push
1:31:09the market all the way up to close near
1:31:11the highs of the day so this tells you
1:31:13that hey you know the buyers are now
1:31:14in control that's why they managed to
1:31:15push the price right push the price all
1:31:17the way
1:31:18near the highs of the day and this is
1:31:19what we call a hammer because you kind
1:31:20of look like a hammer
1:31:23okay so another another pattern that's
1:31:25worth learning is what we call a bullish
1:31:27engulfing pattern so the story is very
1:31:28similar but this time around it's
1:31:30expressed right using two candles so for
1:31:32this one over here this is a rate
1:31:34bearish candle so you can see that the
1:31:35sellers took control and closed the
1:31:38price right near the lows of the day so
1:31:39the buyers were all defeated ah
1:31:40you know injured already painful the
1:31:42next day right somehow the
1:31:44the buyers they got revived right they
1:31:46grew stronger right maybe they put you
1:31:47know a little bit too much steroids in
1:31:48their body or
1:31:49or whatsoever it takes a magic potion
1:31:50and they they push the price right to
1:31:52close near the highest of the day once
1:31:54again
1:31:54so they pretty much just overwhelm right
1:31:56the selling pressure of the previous day
1:31:58how do i know that because you can see
1:31:59that the range
1:32:00of the candle or the range of the body
1:32:02over here was previous previously from
1:32:04this opening price
1:32:06to this closing price but the next day
1:32:08it opened low
1:32:09and closed even higher than the previous
1:32:11day opening price so you can see that
1:32:12the buyers has even overwhelmed right
1:32:14the
1:32:14the sellers right by a lit even a little
1:32:16bit more so this is what we call a
1:32:18bullish
1:32:18engulfing pattern so next one the
1:32:22opposite of uh
1:32:23bullish candlestick patterns right this
1:32:25is what we call the bearish reversal
1:32:26candlestick pattern so there are two
1:32:28as well this one is called a shooting
1:32:30star so this is actually the inverse of
1:32:31a hammer
1:32:32i'll just explain the story behind this
1:32:34so since you know it's a red color
1:32:35candle opening price
1:32:37is here closing price is here so what
1:32:40happened right so you can see that
1:32:42when the day started right let's say
1:32:43this is a daily candle buyers push the
1:32:45price all the way up
1:32:46this higher and mark this highs for the
1:32:48day and then
1:32:50suddenly the sellers came in you know
1:32:51took control
1:32:53and push the price near the lows of the
1:32:55day finally closing near the lows
1:32:57of the day i saw the buyers so you know
1:32:59when the market just opened oh i'm
1:33:01really excited
1:33:02you know let's push the price up higher
1:33:03then somehow middle of the day you know
1:33:04things got depressed you know maybe you
1:33:06know
1:33:06he got reminded of his ex-girlfriend
1:33:08item this ex-sweater let me throw this
1:33:10sweater let me sell sell everything
1:33:11and then the market collapsed and sell
1:33:13sold off and nearly pretty much closed
1:33:14near the lows of the day so you can see
1:33:16that
1:33:16initially buyers they had the upper hand
1:33:18but they were overwhelmed by the sellers
1:33:20right towards the end of the day so this
1:33:21is where you get
1:33:22a shooting star so for this
1:33:25bearish engulfing pattern right it's
1:33:27pretty much uh
1:33:28same uh similar story so we can see for
1:33:31the first candle
1:33:32it is bullish right buyers are happy
1:33:34woohoo i celebrate right they have
1:33:36closed near the highs of the day
1:33:37but for the second day right the sellers
1:33:38took control and pushed the price right
1:33:41all the way down lower
1:33:42exceeding even below the lows of the
1:33:44previous day and the and even the
1:33:46opening price
1:33:47of the previous day they closed near the
1:33:48lows over here so we can see that the
1:33:50buyers once again they were defeated ah
1:33:51i know
1:33:52you know injured hospitalized and
1:33:53they'll never i won't i don't want to
1:33:54say
1:33:55never to recover because in the market
1:33:56it always always goes up goes down so
1:33:58for now
1:33:59i would say the sellers has temporarily
1:34:01won the war
1:34:02okay for now so let me share with you a
1:34:05a few uh charts all right so you know
1:34:08how this looks like
1:34:09on the chart and you can see that you
1:34:10know all the different variations of it
1:34:12out there
1:34:13so let me point out to you the first one
1:34:14let's have a look at how about
1:34:19dollar against the japanese yen so you
1:34:21can see over here
1:34:23this one looks something like a in
1:34:26between a shooting star and a bearish
1:34:28engulfing
1:34:29pattern then we have this one as well
1:34:33more of a shooting star
1:34:36if you look at other example like euro
1:34:38against the usd
1:34:40you can see over here this is similar to
1:34:42shooting star but the difference
1:34:43is the body of the candle is green so
1:34:46again when you trade the markets right
1:34:47it doesn't
1:34:48mean that it has to be a textbook
1:34:49example it has to be rate to be red
1:34:50color sometimes it can be green as well
1:34:52but the meaning is pretty much the same
1:34:53because if you look at this right
1:34:54this is the price rejection that you
1:34:56have seen right the buyers tried to push
1:34:57the price up higher but got overwhelmed
1:34:59by the sellers and finally
1:35:00close right near the lows near the
1:35:02opening opening price of the day
1:35:05over here you have a bearish engulfing
1:35:07pattern right look at how this range of
1:35:09the candle has you know
1:35:10overcome right the body of the previous
1:35:13day
1:35:15and uh this is a bullish engulfing
1:35:16pattern notice how the body of this
1:35:18candle has you know
1:35:19uh is larger right and close right even
1:35:22above the
1:35:23highs and the opening price of the
1:35:25previous day this is a bullish engulfing
1:35:27pattern
1:35:28and then this is another bearish
1:35:29engulfing pattern and yeah so later
1:35:32we'll look at some
1:35:32chart examples uh you know in terms of
1:35:35the uh
1:35:36the market structure area value entry
1:35:38trigger and stuff like that but for now
1:35:40let's do a quick
1:35:42recap so i know i've covered a lot so
1:35:44number one
1:35:45remember market structure it tells you
1:35:47what to do should you be looking for
1:35:48buying opportunities
1:35:49selling opportunities or to stay out of
1:35:51the markets then we have area of value
1:35:53which tells you know where to enter a
1:35:55trade you know
1:35:56where and finally the thing that we just
1:35:58covered entry trigger
1:35:59tells you when to enter a trade
1:36:02and by the way if you're enjoying this
1:36:03training so far smash the thumbs up
1:36:05button
1:36:06if you are not then hit subscribe and
1:36:08then smash the thumbs up button
1:36:10now moving on let's look at some real
1:36:12world
1:36:13trading examples and to combine the
1:36:16trading strategies
1:36:17techniques and concepts that you have
1:36:18learned right and see how we can apply
1:36:20it to the
1:36:20real world of trading using real
1:36:23chatting
1:36:24examples so this is the chart of
1:36:28dollar against the south african rent as
1:36:30you can see over here on
1:36:31this is on the daily time frame so first
1:36:33and foremost let's ask
1:36:35ourselves what is the market structure
1:36:37so when we are
1:36:38trading the markets this is the first
1:36:39question that we want to ask ourselves
1:36:41what is the market structure this would
1:36:42tell us you know what to do whether to
1:36:44be a buyer seller
1:36:45or to stay out of the markets so if you
1:36:47look at this market structure we see a
1:36:48series of lower highs
1:36:49lower highs lower high and lower low
1:36:52lower low
1:36:52lower low so we can see that this market
1:36:54the market structure is in a
1:36:56downtrend second thing the area of value
1:37:00let's put it aov
1:37:01is there an area of value over here so
1:37:03you know area of value could be things
1:37:05like moving average
1:37:06support resistance so from what i'm
1:37:07seeing over here there
1:37:09is an area of value over here i can just
1:37:11use it this tool over here
1:37:13and to draw this area of resistance over
1:37:16here
1:37:17i'll just change this to black color
1:37:19okay so now we have an area of value
1:37:21over here so do we have a valid entry
1:37:24trigger so remember the candlestick
1:37:27module
1:37:28or section that we just covered this
1:37:29over here looks like a
1:37:31bearish engulfing pattern all right so
1:37:34let's
1:37:34call it a bearish engulfing pattern so
1:37:38from the looks of it right we have a
1:37:39numerous
1:37:40factor right working in our favor number
1:37:42one the market structure is in the
1:37:43downtrend
1:37:44area of value the price is at resistance
1:37:46our entry trigger we have
1:37:48a bearish engulfing pattern that's being
1:37:50formed so in this case
1:37:51we can look for a short trade right to
1:37:53shop this market in expectation of
1:37:55lower prices and of course right this is
1:37:56clearly a cherry pick chart in this case
1:37:59the price you know
1:37:59did when in our favor
1:38:03okay so now moving on let's look at
1:38:06another trading example right using the
1:38:07market structure area of value and
1:38:09candlestick patterns that you've just
1:38:10learned and you know use it to help you
1:38:12make a trading decision to to know
1:38:14whether to buy
1:38:14or sell so again let's revisit right
1:38:18what we have learned number one ask
1:38:19ourselves what is the market structure
1:38:21of this currency pair this currency pair
1:38:23is new zealand yen
1:38:24on the eight hour time frame so market
1:38:26structure as you can see this market
1:38:27structure is in an uptrend
1:38:29price forming a series of higher highs
1:38:31and higher lows here
1:38:32higher low higher low higher high higher
1:38:35high
1:38:35okay what about area of value can you
1:38:37see it being
1:38:39near any area of value so from what i'm
1:38:41seeing over here the price
1:38:42has retested this area of support right
1:38:45support support and support and also
1:38:48previously this was actually resistant
1:38:50so
1:38:50price broke out of this swing high
1:38:52resistance it became support
1:38:54now what about entry trigger is there
1:38:56any like signal entry trigger that tells
1:38:58us hey
1:38:58it's time to enter a trade so if you
1:39:01look at this candlestick pattern right
1:39:02this over here
1:39:03what does it look like to you this right
1:39:06i would say it's close to a bullish
1:39:07engulfing pattern but as per the
1:39:09definition of bullish engulfing pattern
1:39:10this isn't quite one because this
1:39:12green candle didn't cover the body right
1:39:14of this red candle but that
1:39:15isn't going to stop us and say hey you
1:39:17know this is not a bullish signal it's
1:39:18not time to enter because
1:39:19if you read the candlestick pattern if
1:39:21you read the price section it's telling
1:39:22you that the buyers
1:39:23they did right close higher for the day
1:39:26and they did show
1:39:27you signs of strength right closing near
1:39:28the highest of the day and almost right
1:39:30the previous day opening price so it
1:39:32closed pretty strongly so this
1:39:34few reasons right the market structure
1:39:36the area of value and the entry trigger
1:39:38right
1:39:38is uh the story is telling you that hey
1:39:41you can now look for
1:39:42a buying opportunity so what you can do
1:39:44is you can enter on the next day
1:39:45open let's say on this candle here the
1:39:47next day open which is on
1:39:49this candle here okay so now what about
1:39:52stop loss now you know where to enter
1:39:53which is very
1:39:54simple the next day open but stop loss
1:39:55is something that i've not covered and i
1:39:56want to
1:39:57talk about in this uh this example here
1:39:59since it's quite straightforward
1:40:00so when it comes to stop-loss right you
1:40:02want to set your stop-loss
1:40:03at a level which invalidates your
1:40:06trading setup so what i mean by this so
1:40:07for this particular trading setup that
1:40:09you're trading you're trading
1:40:10is you know in the direction of the
1:40:11trend uptrend and
1:40:13buying near an area of support so this
1:40:15means that if the price
1:40:17breaks below the pawn then it means your
1:40:20so-called hypothesis right is wrong
1:40:22right because this is the area of
1:40:23support that you expect
1:40:25the price to hold if the price breaks
1:40:27below this area of support and clearly
1:40:29this so-called theory this hypothesis
1:40:31that he had that this trade could hit
1:40:33move higher
1:40:34is clearly wrong and you want to exit
1:40:35your trade so to do this right it's a
1:40:37very simple
1:40:38what you want to do is to set your stop
1:40:39loss at a level right which will
1:40:41so-called
1:40:41break support so if you look at this
1:40:43right clearly you know anywhere from you
1:40:45know 72
1:40:4650 or below right at this level clearly
1:40:49clearly if the price breaks down and he
1:40:51hit this level this area of support
1:40:53is broken and you want to exit your
1:40:54trade but so is there a objective way
1:40:57you know to set your stop loss instead
1:40:58of just blindly you know putting it at
1:41:00some
1:41:00level that looks like you know far away
1:41:02from support and the answer is of course
1:41:04yes right and to do that you can use an
1:41:06indicator called the average true range
1:41:08so over here i've shown you this
1:41:09indicator below but i'll show you where
1:41:11to get it just
1:41:12go to indicator tab search atr average
1:41:15to range
1:41:16it will come out as this one over here
1:41:17the settings i like to use is 20 period
1:41:19atr using sma so this is just my
1:41:22preference over here
1:41:23and as you can see right now the atr
1:41:25value is about 0.32 about 32 pips so
1:41:28what this tells you is that on this time
1:41:30frame
1:41:31for new zealand yen on the eight hour
1:41:32time frame over the last
1:41:3420 candles right this currency pair
1:41:36moves an average of about 32
1:41:38pips on average i'm not saying every
1:41:40single cannon but every single candle
1:41:42but on average over the last 20 candles
1:41:44or so
1:41:44this currency pair has moved about 32
1:41:46pips so what this means is that you can
1:41:48actually use this value
1:41:50right and give it some buffer right to
1:41:52set your stop loss below
1:41:54support so let's say for example the
1:41:55lows of support is at this level over
1:41:57here
1:41:57what you can do is take this level and
1:41:59minus let's say this level is x
1:42:01right and you minus this atr value this
1:42:04one atr value
1:42:06okay so one atr is equal to 32 pips
1:42:08right and let's say you get the value of
1:42:09y
1:42:09so let's say y is somewhere about here
1:42:11this right can be your stop-loss and
1:42:13it's an objective way to set your
1:42:14stop-loss based on the
1:42:15volatility of the market since atr
1:42:18indicator you know
1:42:19takes into account the volatility of the
1:42:20market so let me walk you through how to
1:42:23actually set your stop-loss so what you
1:42:24want to do is to find out what is this
1:42:27low of support so in this case at the
1:42:28low of support the value is on this
1:42:30candle here and
1:42:31the value is about from what i'm seeing
1:42:34over here it's
1:42:3672 and 72.72 so you just look at this l
1:42:40value which is the low of the candle and
1:42:41you can see it's about seven
1:42:43seven two dot seven two so what i'm
1:42:45gonna do is take seven two dot seven two
1:42:47minus thirty two pips sorry seven two
1:42:50dot seven
1:42:50two and a minus thirty two pips which is
1:42:53zero point
1:42:54three two that is going to give me a
1:42:57value of about 72.4
1:43:00am i right okay so what i'll do is i
1:43:03will set my stop loss at this level
1:43:05at 72.4 change this to rate so you can
1:43:08see it better
1:43:09and your stop loss will be at 72.4
1:43:13okay so as you can see over here i will
1:43:15show you where your entry point entry
1:43:17point is on the next day open the candle
1:43:19i'll put it in green
1:43:20so you can see it green okay and there
1:43:24you have it right so this is
1:43:25this candle here this candle here the
1:43:27opening price is where you
1:43:29look to buy this rate level here is your
1:43:31stop loss so now let's take things
1:43:33a step further right if you have a 10
1:43:36000
1:43:37trading account and you want to raise
1:43:39one percent risk
1:43:40on each trade how many units of new
1:43:43zealand yen can you buy
1:43:44aha okay so now what we need to do is to
1:43:47again revisit the concepts that you've
1:43:48learned so what you'll do is
1:43:49first and foremost measure the
1:43:53the uh your entry price to your
1:43:54stop-loss so your entry price let's say
1:43:56let's make this more precise let's say
1:43:58your entry price is at this
1:43:59opening price of this candle which is
1:44:01about 73.31 okay so
1:44:03i'm going to change this to 73.31 and
1:44:06your stop loss is 72.4
1:44:08so you take 72.31 672.31
1:44:14minus 72.4 that gives me a 91 pip stop
1:44:17loss 91 pips
1:44:19okay so what do we do with this
1:44:21information so how do i get 73.31 again
1:44:24the entry price on this candle over here
1:44:26the opening price is 73.31
1:44:28stop loss at 72.4 which is this level
1:44:30here minus one atr
1:44:32and it gives us 72.4 as our stop loss
1:44:35and we take the entry price
1:44:36minus your stop loss right and this is
1:44:39your distance right
1:44:40in pips right for stop loss so in other
1:44:42words from your entry price
1:44:44here all the way down to here is 91
1:44:48pips so now the question is how
1:44:52many units of new zealand can we buy
1:44:55such that we don't lose more than one
1:44:56percent of our current of our account
1:44:58so time to revisit your position sizing
1:45:01so let's go to this
1:45:04so let's say currency pair is new
1:45:05zealand type in new zealand yen
1:45:07account currency let's keep it you know
1:45:09as usd let's say your account size is
1:45:11ten thousand dollars
1:45:13risking one percent on each trade your
1:45:15stop loss as mentioned earlier is about
1:45:1691 pips click calculate it tells you
1:45:20that you can buy
1:45:210.121 lot which is about 1.2
1:45:25mini lots okay so if you're going to
1:45:26trade this you know i hope it's a demo
1:45:28account right
1:45:29you can buy 0.121
1:45:33law okay which is about 1.2
1:45:36million lot does it make sense so you
1:45:38can see that we have you know
1:45:40used a number of you know concepts that
1:45:42you have learned earlier the market
1:45:43structure area of value entry trigger
1:45:45then we learn how to set our stock loss
1:45:46we learn how to calculate calculate the
1:45:48optimal
1:45:48position size right such that we don't
1:45:50lose more than one percent
1:45:52of our trading account as shown in this
1:45:54position sizing calculator over here
1:45:57okay so how are you feeling do you feel
1:45:59overwhelmed ah
1:46:00there's so much to cover well don't be
1:46:03because
1:46:04you know if this is your first time you
1:46:05know watching this video or you're new
1:46:07to forex trading yes it's perfectly
1:46:08normal to feel overwhelmed
1:46:10and confused but this is nothing you
1:46:12know new this is actually all the topics
1:46:14that we have covered in the earlier part
1:46:15of the video if you're unsure you can
1:46:16know just go back watch through the
1:46:18videos and to clarify you know on any
1:46:21concepts
1:46:22or techniques right that is unclear to
1:46:23you so i'm going to go through another
1:46:25example because this is so important
1:46:26right understanding the the
1:46:30position sizing the risk management as
1:46:32well you know how to analyze a chart
1:46:33and you know how to combine all this
1:46:35together and place a trade
1:46:36so that you don't blow up your trading
1:46:38account so let's have a look at another
1:46:40one using the same framework
1:46:41so number one ask ourselves market
1:46:42structure what is the market structure
1:46:44of this currency pair so this is
1:46:46dollar against the japanese yen eight
1:46:48hour time frame market structure is
1:46:50down i'm just kidding it's up right
1:46:52higher highs and higher lows higher
1:46:54highs sorry sorry higher low
1:46:55higher low higher low market structure
1:46:57is up and then you have higher high
1:46:58higher high higher high
1:47:01area of value is the price near an area
1:47:04of value as you can see over here
1:47:05it is at this previous resistance
1:47:08resistance which became support and yes
1:47:10this is an area of value
1:47:12and not just then right we also have if
1:47:15you pull out your 50 period moving
1:47:16average right
1:47:17this 50 period moving average also
1:47:19serves as an area of value we tested
1:47:21once twice
1:47:22three times and then fourth time over
1:47:23here so this is what we mean by
1:47:25when we have like support and the 50
1:47:28period moving average coming together
1:47:30you know from two separate area of value
1:47:32coming together at a
1:47:33at a similar area i call this uh stack
1:47:36areas because you have multiple factors
1:47:38coming together to work in your favor so
1:47:39this is a stack area you have the aerial
1:47:41value of the 50 period moving average
1:47:43as well as previous resistance which
1:47:45became support
1:47:46the third thing right do you have an
1:47:48entry trigger so from the looks of
1:47:50things
1:47:50when you studied the bullish reversal
1:47:52candlestick patterns earlier this isn't
1:47:54actually any
1:47:55of the candlestick pattern which you
1:47:57have learned but again the
1:47:59memorizing of the candlestick pattern
1:48:00the name is not important what's
1:48:01important is that you can see right
1:48:02buyers stepping in right to push
1:48:04and close higher it breaks and close
1:48:06above the 50 period moving average
1:48:07looking at the range of this candle is
1:48:09pretty nice and large as well and the
1:48:11price is closed near the highs
1:48:12so this tells you know the buyers are in
1:48:14control right and managed to close
1:48:16right near the highs of this eight hour
1:48:17time frame so what we can do is again
1:48:19uh to me this is a valid trading setup
1:48:22and you can look to
1:48:23buy so let's say you buy on the next
1:48:25day's open
1:48:26opening price of this candle over here
1:48:29so now what about stop loss so again
1:48:31stop loss we want to set it
1:48:33at a level which invalidates our trading
1:48:35setup so our area of value
1:48:36is over here this previous previous
1:48:39resistance which became
1:48:40support okay we want to set our stop
1:48:42loss right a distance
1:48:44below support we don't just want to set
1:48:45it smack below support because
1:48:47like for example this is directly over
1:48:48here because the price will just come
1:48:49down spike rate and then continue higher
1:48:51so
1:48:52if you set your stop loss just below it
1:48:53this could happen to you right
1:48:55pretty often and it sucks so this is why
1:48:57i recommend right
1:48:58finding the low of support right and
1:49:00then just minusing off one atr for it so
1:49:02in this case one atr it tells you it's
1:49:03about 34 pips
1:49:04so what's left for you to do right now
1:49:06is to find out what's the low of support
1:49:08the low of support is again right let me
1:49:09look at this candle as the low
1:49:11it's about one zero eight let's make it
1:49:13one zero nine
1:49:14as shown over here right is the low the
1:49:16low support is about one
1:49:18zero nine so i'm going to take one zero
1:49:20nine minus thirty four pips again
1:49:22using my trusty calculator one zero nine
1:49:25minus 34 pip
1:49:26it gives me 108.66 so this tells me it
1:49:29might stop more so it should be at
1:49:31108.66 i'm going to change this to rain
1:49:34i am going to also change the
1:49:36coordinates
1:49:37to 108.66
1:49:41okay this is my stop-loss level
1:49:45great so now i want to take things
1:49:49a step further right you know how to set
1:49:51your stop-loss you know your entry is at
1:49:53this
1:49:54this price over here okay let me just
1:49:56change this to green about here
1:49:58entry price is like this candle open
1:50:01which is about
1:50:03109.88 okay let me just change this to
1:50:06109.88 so another thing to
1:50:09to talk about is your target so so far
1:50:11so far we have talked about
1:50:12the trading setup right market structure
1:50:14area of value entry trigger to know when
1:50:16exactly to enter a trade
1:50:17i shared with you how to set a proper
1:50:19stop-loss so you don't get stopped out
1:50:20too early and the final component that i
1:50:22want to add as well is to
1:50:23where to take profits right if the
1:50:24market moves in your favor so coming
1:50:26from let's say a swing trading
1:50:28perspective
1:50:28and bear in mind there are many ways to
1:50:30take profits i'm going to share with you
1:50:31one method which
1:50:32is what we call swing trading which is
1:50:34in essence right just capturing one
1:50:35swing in the market so this is like
1:50:37one swing right from this retracement
1:50:39then we pull up one swing
1:50:41this is one swing this is uh another
1:50:44swing so
1:50:44basically one move in the market i'm
1:50:46going to share with you how to do that
1:50:47so to capture one swing in the market we
1:50:49usually want to set our target profit
1:50:52at before right previous swing highs are
1:50:54low in the market so you know what is
1:50:56swing right this is our swing point
1:50:57swing high
1:50:58swing high swing low swing low so if you
1:51:00are long right you want to exit right
1:51:02before
1:51:02the nearest swing high because this is
1:51:04where potential selling pressure could
1:51:05come in
1:51:06you know and you know push the price
1:51:08lower so you're gonna set your target
1:51:09before it
1:51:10so in terms of target i would say a
1:51:12reasonable target could be at this
1:51:14price point over here before this
1:51:16remember this over here
1:51:18is an area on your chart not a line so
1:51:21don't set your
1:51:22target right just you know one bit below
1:51:24this heist because remember it's an area
1:51:26the price may not get to that high right
1:51:27before it starts to reverse it could
1:51:29just you know
1:51:30come close into that area doesn't hit
1:51:32the highs doesn't hit these highs over
1:51:34here and then starts to collapse so if
1:51:35you're too like you know greedy if you
1:51:37take profit you set it at these highs
1:51:38over here
1:51:39or even over here you know you're making
1:51:41difficult for the market you know
1:51:43to give you a profit so be reasonable
1:51:45with your targets
1:51:46so my recommendation is to set it before
1:51:48the swing high so let's say we set it
1:51:50somewhere
1:51:52about here right this i would say it's
1:51:53reasonable and let's change this to blue
1:51:55color
1:51:56okay so let's say our target is at let's
1:51:59put it at a number that is easy to
1:52:01understand
1:52:03107 dot let's say seven three seven two
1:52:05okay
1:52:06okay so now if you look at this right
1:52:09now you can see that
1:52:10where is your entry price which is this
1:52:12green line over here
1:52:14where is your stop loss this red line
1:52:15over here where is your
1:52:17target which is this blue line over here
1:52:19so now again let's revisit you know
1:52:21position sizing since that is so
1:52:22important right that is what
1:52:23keeps your account intact let's find out
1:52:26right
1:52:27the size of our stop loss so basically
1:52:29from entry price to your stop loss right
1:52:31what is this
1:52:32distance over here so again just take
1:52:33the entry price minus
1:52:35the stop loss so what you can do is you
1:52:36can pause this video and do the math
1:52:38with me and see whether you get the
1:52:38answer correct
1:52:39so i'm going to take 109.88
1:52:43minus 108.66
1:52:48all right so basically i'm thinking this
1:52:49green number minus this rate number it
1:52:51gives me about
1:52:55122 pips
1:52:58okay that's the distance of my stop-loss
1:53:01so in essence from here to here is 122
1:53:04pips
1:53:04so now let's use this number and find
1:53:06out how many
1:53:08units of dollar against the japanese yen
1:53:10can we buy such that you know
1:53:11we uh we can you know still adhere to
1:53:14our risk management
1:53:15so to do that just go to look for dollar
1:53:17yen this is the currency pair
1:53:18you're trading okay let's say your
1:53:21account currency is funded in us dollar
1:53:22as well
1:53:23account size let's say now you're a
1:53:24baller right hundred thousand units your
1:53:26trade i mean your account size is
1:53:27hundred thousand dollars
1:53:28and let's say you are still the same you
1:53:30know prudent trader you still risk one
1:53:32percent on that trade well done
1:53:34stop losses 122 pips as we have
1:53:37mentioned earlier things about one two
1:53:39two if i'm not wrong here it is
1:53:41then you're just gonna click calculate
1:53:43and it tells you that you can buy now
1:53:45zero point eight nine nine standard lot
1:53:47this is equivalent to about eight point
1:53:50nine i would say nine mini lots right
1:53:52you just rounded up it's about nine mini
1:53:54lots or 0.9 standard lot so
1:53:56in other words okay if you have a
1:53:57hundred thousand dollars account and
1:53:59you're risking one percent
1:54:00of that account let's say one percent is
1:54:02a thousand dollars of your account
1:54:04and you're trading this currency pair
1:54:06dollar against the japanese yen
1:54:07your stop-loss is 122 pips okay
1:54:11how many units of this currency can you
1:54:14buy and according to that
1:54:15uh risk risk management or rather
1:54:17position sizing calculator you saw
1:54:19earlier it's about 0.9
1:54:21standard lot or nine mini lots it's
1:54:24actually 0.899
1:54:25i just rounded up to make my life easier
1:54:26so that's how you you know combine all
1:54:28these different uh
1:54:29elements together this concept
1:54:31strategies like to make sense right out
1:54:33of
1:54:33your forex trading career
1:54:37so let's now take things one step even
1:54:39further okay so this is actually
1:54:41stuff we've covered earlier i'm just
1:54:42revising it so we're going to take
1:54:44things a step further because
1:54:45one thing that you might not notice if
1:54:48you look at this hey rayner
1:54:49this is my entry price this is my
1:54:51stop-loss
1:54:52and this is my target it seems that my
1:54:54stop-loss over here
1:54:56okay let's call it sl stop-loss is kind
1:54:59of smaller
1:55:00than my profit target right if i just
1:55:02pull it out let's call it tb
1:55:03target profit my stop-loss is wider than
1:55:05my target profit then if you
1:55:06are thinking along those lines you are
1:55:08absolutely correct you can actually use
1:55:10a tool
1:55:11like this over here okay just use the
1:55:13long position one to help you access
1:55:15right your risk to reward ratio so just
1:55:16pull this tool out right just click this
1:55:18one
1:55:19choose long and if you're going to click
1:55:20let's say click on this green line this
1:55:22thing will come out
1:55:22so the way we're going to do it is that
1:55:23we're going to adjust this thing right
1:55:25such that this level here is at our stop
1:55:27loss
1:55:28okay and this one over here is at our
1:55:31target
1:55:32the blue line and this over here
1:55:35is smack at our entry point which is
1:55:37fine and you can see something very
1:55:38interesting what it's telling you how
1:55:39you actually made use of this tool
1:55:41is that is that you can see you are
1:55:44risking 122.2 pips right which is your
1:55:47stop-loss
1:55:48122 pips and this over here 84.7
1:55:53is your target profit what you have
1:55:54targeted which is about 84 pips
1:55:56so in other words if you look from a
1:55:57risk to reward standpoint
1:55:59you are risking one dollar to
1:56:02potentially make back
1:56:0369 cents as shown over here 69 cents
1:56:07how do i know 69 you can see over here
1:56:09risk to reward ratio 0.69 you're risking
1:56:12one dollar
1:56:12to make 69 cents so it's not exactly
1:56:15very favorable and most traders will say
1:56:17uh that's not really a trade i want to
1:56:19take and i can perfectly understand that
1:56:20so what can you do
1:56:22to make this risk to reward on your
1:56:24trade more attractive
1:56:26so now there are a few things that you
1:56:27can do number one you can of course
1:56:29shift your target
1:56:30up higher okay to to a point where you
1:56:33know okay
1:56:34you're risking a dollar and make a
1:56:35dollar 37 cents back in return but
1:56:37you know to put your target over here
1:56:39it's a bit of a i won't say it's a
1:56:41stretch right since this is a trending
1:56:42market but what has to happen is that
1:56:44the market right has to break above this
1:56:46highs to get to your target so that's
1:56:48like kind of like
1:56:50a little bit more work right for the
1:56:51market to go through to reach your
1:56:52target and i'll say that's a lower
1:56:54probability
1:56:55right since the market has to break
1:56:56through above this swing high but again
1:56:58right in the context of this
1:56:59price action that we are seeing i
1:57:00wouldn't say that it's impossible
1:57:01because we are after all in an uptrend
1:57:03but if it's a range market right i would
1:57:04say clearly a very bad
1:57:06decision so let's say we don't touch the
1:57:08target right let's keep the target the
1:57:09same
1:57:10let's say around this level over here
1:57:12okay this is our target
1:57:14right so what else can we do to make the
1:57:16risk to reward
1:57:17more favorable what we can do is again
1:57:19we can shift our stop loss we can make
1:57:20it tighter right shift it up higher
1:57:22but again we don't want to mess with our
1:57:23stop-loss because our stop-loss is at a
1:57:25level
1:57:25where it reaches right it will
1:57:28invalidate our trading setup you don't
1:57:29want to exit the trade
1:57:31while the setup is still there it
1:57:32doesn't quite make sense right you want
1:57:33to be buying and support and support is
1:57:35not broken but you already exit your
1:57:36trade
1:57:36that's that's not very you know uh wise
1:57:39so the last thing that you can still do
1:57:40is to
1:57:41adjust right your entry point so you
1:57:43know your entry point right now is about
1:57:46109.88 which is this green line over
1:57:48here this is your entry point
1:57:50what you can do is to use a buy limit
1:57:52order
1:57:53see this is one of the orders that we
1:57:54have mentioned earlier to use a buy
1:57:55leave in order
1:57:56to enter at a more favorable price so
1:57:58what if we
1:58:01shift right our entry price to somewhere
1:58:03about here at let's say
1:58:05109.5 okay so let me just
1:58:09just just double click this let's say
1:58:11our entry price now is at 109.5
1:58:13our take profit level the price we keep
1:58:16it unchanged
1:58:17our stop-loss level will keep it
1:58:18unchanged as well and we click
1:58:20ok so now if you look
1:58:23at your risk to reward right now you can
1:58:26see now you're risking a dollar
1:58:28to potentially make 1.45 cents
1:58:32as shown over here one dollar and 45
1:58:35cents now your risk to reward right
1:58:37let me just put it one over here your
1:58:39risk reward right has been now
1:58:40improved by using a buy limit order of
1:58:42course everything has its pros and cons
1:58:45so let me share with you the downside to
1:58:46using this method
1:58:47if you go with a buy limit order your
1:58:49order might not get filled and you know
1:58:51if the market continues higher
1:58:52you would have you know missed the trade
1:58:54but in this case right uh of course it's
1:58:55a cherry pick chart you would have you
1:58:57know gotten filled
1:58:58and entered you know at a more favorable
1:59:00price as you can see
1:59:01this market did deep down lower and
1:59:03giving you a better entry price and now
1:59:04it's starting to kind of you know hit
1:59:05higher
1:59:06so this is another technique that you
1:59:07can use in your own trading if
1:59:09at as of right now right if you're
1:59:11looking at your entry stops and target
1:59:12the risk to reward
1:59:13doesn't quite make sense you can
1:59:14consider using a buy limit order to get
1:59:16in
1:59:17at a better price but a few things that
1:59:19i would caution you is to not adjust
1:59:21your original stop-loss because that is
1:59:23at a level right that is plan right to
1:59:25set right where if the price reaches it
1:59:27it will invalidate your trading setup
1:59:28and you want to get out of it don't make
1:59:30it too tight because sometimes
1:59:31a slight spike right might get you
1:59:33stopped out of your trade if your
1:59:34stop-loss is too tight
1:59:35as for target this there's some
1:59:36discretion over here since as you've
1:59:38seen right this is a trending market
1:59:40it's not
1:59:40far-fetched to say that hey maybe i can
1:59:42move my target up slightly higher
1:59:43somewhere about here
1:59:44since it's a trending market the price
1:59:45tends to break above the previous high
1:59:47that is fair enough for that i would say
1:59:48it's a fair call
1:59:49but one thing to to note that if if
1:59:51right if the market right now is in the
1:59:52range market
1:59:54all right and you buy let's say
1:59:56somewhere over here and your risk to
1:59:57reward
1:59:58is not very good don't set your target
1:59:59above the highs of this
2:00:01resistance because you are expecting the
2:00:02price to break above that resistance
2:00:04to give you this target that you have
2:00:05over here just so your risk to reward
2:00:07makes sense and this is really
2:00:08a very bad idea if you're going to shift
2:00:10your target to even above resistance but
2:00:12for this context that we are talking
2:00:13about here in this uptrend i would say
2:00:15that is a perfectly you know fair
2:00:17call okay so are you still with me
2:00:20right i hope so and if you want to smash
2:00:23the thumbs up button but if your mind
2:00:25your soul is wandering elsewhere then
2:00:26hit the subscribe button
2:00:28okay so now let's have a look at another
2:00:30example this is aussie against the swiss
2:00:32franc
2:00:33as you can see over here and this is the
2:00:35eight hour time frame as well
2:00:37so you know you should be a pro already
2:00:39by now if you even know what i'm going
2:00:40to say first thing first
2:00:41market structure what is this market
2:00:43structure
2:00:45from the looks of things this market is
2:00:46in an uptrend higher high
2:00:48and higher low higher high higher high
2:00:50higher high higher high
2:00:52and higher low higher low higher low
2:00:54higher low
2:00:56so what about area of value so clearly
2:00:58this one here you can see that this
2:00:59market is at this area of
2:01:01support entry trigger do we have any
2:01:05valid entry trigger to enter a trade
2:01:06while we have this nice
2:01:08bullish engulfing pattern okay so this
2:01:11this candle
2:01:12has reversed and closed above the
2:01:14previous day
2:01:15closing or rather the highs of the
2:01:17previous day closing now near the highs
2:01:19of this
2:01:20day so this is bullish great so what we
2:01:22can do is that we have a you know number
2:01:24of factors working in our favor
2:01:25uh market structure is up trading from
2:01:28an area of value and
2:01:29a valid entry trigger to go long let's
2:01:31see we overlay for 50 ma
2:01:33okay not too bad as well we even have
2:01:34the 50 period moving average you know in
2:01:36our favor tested once
2:01:37twice and now here for third time again
2:01:40so now
2:01:40where can we enter a trade the next day
2:01:42open so now next day looking pretty good
2:01:44as well we enter on the next stage
2:01:45open okay so what about stop loss i pull
2:01:48out the atr indicator
2:01:50you can see the stop loss all right the
2:01:52atr value is about 0.003 which is about
2:01:5430
2:01:55pips so again though to way to read this
2:01:58stop-loss indicator is the same
2:01:59as you're reading a pip right you know a
2:02:01fourth decimal place same concept over
2:02:03here
2:02:03so now let's find out what is the low of
2:02:05this support right so we can set a
2:02:07proper stop loss level
2:02:08so the low over here is about 0.6818
2:02:12so 0.6818
2:02:16minus 30
2:02:20that gives us about 0.6788
2:02:23okay so our stop-loss will be at 0.6788
2:02:27changes to rate 6788
2:02:30great entry price pretty straightforward
2:02:32we enter on this uh
2:02:33opening price of this candle which is
2:02:36about here
2:02:37i'll change this to green so we can mark
2:02:38as the entry price that we enter
2:02:41so now i am not going to go through the
2:02:44position sizing because you should be a
2:02:46pro by now already as for target it's
2:02:48going to be quite straightforward your
2:02:49target
2:02:50could set it just before this swing high
2:02:53so let's say somewhere about here
2:02:55okay i'll change this to blue okay and
2:02:57that's a potential
2:02:59level right where you can use to set
2:03:01your target profit so as
2:03:03of right now if you just eyeball you can
2:03:05see that your risk to reward you're
2:03:06probably risking a dollar to make like
2:03:0880 cents or so
2:03:09and as you know you can use a buy limit
2:03:10order to improve your risk to reward on
2:03:12the trade
2:03:13and you know to manage your risk you can
2:03:15use a position sizing calculator
2:03:17to know how many units of currency you
2:03:19should buy right such that
2:03:20you risk like for example one percent of
2:03:22your account so that is something that
2:03:24we have done through
2:03:25previously as well so one thing to point
2:03:27out is that uh for this particular
2:03:28example i want to show you
2:03:30how a losing trade looks like in this
2:03:32case the market you know did went in our
2:03:33favor
2:03:34a little bit you can see that it goes up
2:03:37here
2:03:38halfway through to our target over here
2:03:40before it starts to
2:03:42reverse and then stop us out for a loss
2:03:44of this trade so this trade clearly is a
2:03:45losing trade it hits our stop loss
2:03:47and only after that right you can see
2:03:49this trade continue
2:03:51to rally and break out higher so this
2:03:52will happen right in your trading career
2:03:54i
2:03:54assure you i guarantee you a confirm
2:03:56plus chop right no matter
2:03:58how good a trading setup looks like no
2:04:00matter how proper stop-loss how good of
2:04:02a stop-loss that you have set now below
2:04:03the
2:04:04the price structure below support the
2:04:05market right sometimes will just you
2:04:07know play tricks on you you will still
2:04:08hit your stop-loss all right and to make
2:04:09you feel
2:04:10the anguish the pain only to reverse
2:04:13back and you know go
2:04:13so much in your favor right and and to
2:04:15you know
2:04:17make you feel like a loser so that will
2:04:18happen be prepared for it and this
2:04:20example is really
2:04:21clearly one that it and how do i know
2:04:23that it's because this is a
2:04:24it's a trait i took right and it
2:04:26happened to me
2:04:28okay so moving on right let's have a
2:04:31look at a few
2:04:32trading examples and this time around it
2:04:34will be a little bit different it will
2:04:36be traits that i will
2:04:38not want to trade and again we will use
2:04:40the same formula we will use the same
2:04:43uh concepts that we have talked about
2:04:45earlier we have a look at the market
2:04:46structure
2:04:47area of value and the entry trigger so
2:04:50first one
2:04:50aussie against the japanese yen so if
2:04:52you look at this chart
2:04:54on this time frame the daily timeframe
2:04:55you can see that the market structure is
2:04:57up great so what will we do we look for
2:05:00buying opportunities second thing where
2:05:02is the area of value so on this chart
2:05:05and on this time frame i see that the
2:05:07area of value is around the 82
2:05:09price point somewhere here so right now
2:05:11the price is kind of like in the middle
2:05:13of
2:05:13i would say nowhere so it's not near any
2:05:15area of value i'll give it a cross
2:05:17entry trigger is there any valid entry
2:05:19trigger at this point in time
2:05:20well since it's not even at an area of
2:05:23value i wouldn't
2:05:24really care if it's there's an entry
2:05:25trigger or not because i'm not trading
2:05:27from an area of value and right now the
2:05:29price the market is still open it's not
2:05:30closed yet so again
2:05:31uh entry trigger is pretty much i'll say
2:05:33no as well since
2:05:34this market is currently still uh moving
2:05:37and not closed yet
2:05:38so as you can see this is clearly a
2:05:40trade that i don't want to trade yes
2:05:42market structure is up it's in an
2:05:44uptrend but
2:05:45it's not from an area of value and there
2:05:47is no valid entry trigger for me
2:05:49to pull a trade second one dollar
2:05:52against the norwegian
2:05:53chrono so same same thing let's have a
2:05:55look at this
2:05:56market structure you can see that this
2:05:58one here is in the downtrend
2:05:59series of lower highs and lower lows
2:06:02downtrend
2:06:03area of value is there is it near any
2:06:06area of value so again area value i
2:06:08would say somewhere around the 8.70
2:06:10price point somewhere here
2:06:11price is over here at this point in time
2:06:13so i'll say no
2:06:14entry trigger wise if it's not at an
2:06:16area of value then really usually i
2:06:18don't even bother looking at the entry
2:06:19trigger but for the sake of let's say
2:06:21this training we look at the entry
2:06:22trigger we see there was a shooting
2:06:24start on the previous
2:06:25day right so there is an entry trigger
2:06:27but because
2:06:28again it's not from an area of value i
2:06:30would choose to skip this trade
2:06:32altogether so hopefully by now you can
2:06:33understand
2:06:34how market structure area of value and
2:06:36the entry trigger give you a good idea
2:06:38to hey you know whether should i be
2:06:39taking a trade
2:06:40or not okay so at this point i'm sure
2:06:44you know you have learned
2:06:45a fun right you covered forex trading
2:06:46basics risk management some simple
2:06:49numbers to run through and the final
2:06:50section was actually more of a
2:06:52price action trading right learning
2:06:54about market structure area of value
2:06:55support resistance candlestick patterns
2:06:57and stuff like that and if you're
2:06:58enjoying the training or if you've
2:06:59enjoyed it so far smash the thumbs up
2:07:00button if not then hit the subscribe
2:07:02and yeah so for those of you who wants
2:07:05to learn more about price section
2:07:06trading so basically the stuff that we
2:07:08have just covered right the chart
2:07:09analysis
2:07:10the support resistance the candlestick
2:07:11patterns and whatnot if you want to dive
2:07:13deeper into it then i've actually got
2:07:15this book over here that
2:07:16will meet your needs it's called price
2:07:18action trading secrets you can get it on
2:07:20this link over here i'll put this link
2:07:21below
2:07:22and what is price action trading secret
2:07:24so this is actually a physical color
2:07:26trading book right
2:07:27that will be shipped out to you and in
2:07:29this book right you'll learn
2:07:30more about price action trading you'll
2:07:32learn how to you know draw support
2:07:33resistance how to tell when support
2:07:34resistance will break we dive deep into
2:07:36candlestick patterns chart analysis
2:07:38how to trade reversals how to trade
2:07:39breakout and much much more
2:07:41so this book over here you can get a
2:07:44copy here today
2:07:45and if you get a copy today today i'll
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2:07:49a few bonuses i'll give you a few
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2:07:52first bonus is the digital edition of
2:07:54price action trading secrets this is
2:07:55actually a pdf version
2:07:56so when you purchase the book today uh
2:07:59i'll also
2:08:00send you a pdf version so you don't have
2:08:01to wait for your book to arrive right
2:08:03you can start reading immediately
2:08:05the second bonus i'll give you is this
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2:08:23right this is a webinar right that will
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2:08:40gonna give you
2:08:40give you the fourth bonus it's actually
2:08:42the slides right off my presentation so
2:08:44all these slides
2:08:45this slides over here this one this
2:08:46entire slide i will
2:08:48give it to you so this way as you're
2:08:50watching this video and if you want to
2:08:51take notes
2:08:51at least you have all this powerpoint
2:08:53slides with you you don't have to you
2:08:54know manually take notes you know to
2:08:55find out what you've learned always in
2:08:56the slides
2:08:57you can have a copy of the slides and
2:08:58they'll help you with your further
2:09:00revision
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2:09:07trading
2:09:08secrets today and if you're wondering
2:09:10right well hey rayner what if i don't
2:09:11like price action trading secrets
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2:09:21in this book whatsoever we'll gladly
2:09:22refund you in full
2:09:24so just go to this website price action
2:09:26trading secrets dot com
2:09:28click on it right you'll be brought to
2:09:29this uh checkout page
2:09:31over here so just go to the page right
2:09:32you see all these blue buttons along the
2:09:34page
2:09:34click on this blue button you'll be
2:09:35brought to this checkout page at the
2:09:37bottom just fill in your
2:09:39name your address so we know where to
2:09:40ship the book to you and this book is
2:09:42like
2:09:42what 1290 for those of you who are
2:09:43living in the united states for those of
2:09:45you outside of the united states it's
2:09:47like 18
2:09:4890 cents and that includes the cost of
2:09:50printing of the book and the shipping
2:09:51fee
2:09:51that's it so go to price action trading
2:09:54secrets.com right get your copy of it
2:09:56with that's it i wish you good luck good
2:09:57trading i will talk to you soon

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