INTRODUCTION

1.2 COMPETENCY ASSUMPTIONS AND REQUIREMENTS TO DO THE LONG CANDLE COURSE

No special software is required. You will however need charting software and a trading demo account to do this course. A few demo accounts may not be a bad idea. These can be obtained from www.fxcm.com or www.metaquotes.net if you don’t already have charting software or a dealing station. You can learn how to use their software from their comprehensive user guides. The most assumed important skills are the ability to use trading charts and to place orders.

This course can be completed by beginners to Forex trading. We do not provide formal introduction to Forex trading in the notes. If you are completely new to Forex trading you may have to reread the course a number of times. All the more reason for printing it out for constant reference.

Use this link to information on Fundamental and Technical analysis: - Fundamental and Technical Analysis.

Click the picture on the right to obtain more information on Technical analysis and about most Technical indicators

As this course is called the long candle course I think it would be a good time to make sure that everybody understands the basis of Japanese candles. Japanese candles give a good visual summary of the path the price took during the single (one) time span of the chart. If we say that we are using a 1 hour chart this means that every candle on the chart represents the price movement the price took during that 1 hour. A 1 hour candle would therefore equal the movement of the 12 five minute candles that can be found on the 5 minute chart. The key information obtained from every candle is: - The price high, the price low, the opening price, the closing price and the direction of movement from its colour.

The area between the opening and closing price is the body of the candle and represents the actual gains or losses made by the BEARS or the BULLS. If the price goes up (the BULLS have made gains) during the period of the candle the body is normally blue. When the price goes down (the BEARS have made gains) the colour is normally red. When the opening price is equal to the closing price there is no body. If the BULLS or the BEARS make BIG gains during the period of the candle you get a LONG Candle. In this course the objective is to catch the long candles where there are strong moves in the market.

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1.3 COURSE STRUCTURE and TERMINOLOGY

STRUCTURE

We have structured the course to encourage the practical aspect of trading as I would in a live training and trading environment. I have tried to make the course fun and full of variety with the use of links, Practical and Trading exercises, tables, charts, additional reading, references to articles and videos etc. I am providing as wide a perspective on Forex Trading as I can. Below is the format used to present some of the information:

LINKS

Wherever I have used a trading concept that you may need additional information on I have created links. They are normally coloured in blue like this Moving average and underlined. These are links to topics in this course, information on the Expert4x website and general information on the internet. Just click on these links and you will be taken to the information. Try clicking on moving averages above.

PRACTICAL EXERCISES

We have also included a number of practical exercises which will help you with your trading. These exercises are shown in a green box and are referenced

Exercise (number)

Exercise (number): Enter the following trade

CHARTS

We also have a number of charts with trading examples.

CHART 5.6: The GBP likes trading in dominant angles

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TABLES

We often supply tables with useful information Table 12.1 This table shows how often there has been a 60 pip move on a 1 hour candle for some of the major currencies during 2009 (147 days up to the end of 2009), The 40 pip moves on a 30 minute candles are also shown.

tabel

SUPPORT

This course is fully supported to make sure that you get the best value from this course. We use Emails for support enquiries. Before raising an enquiry please complete the whole course. Sometimes your question is clarified in a future chapter or example. Please send your enquiries to info@expert4x.com .

When raising an enquiry about any comments, exercises, examples, tables etc please use the references so that we are clear about what you are querying. Also please reference the parts of the course clearly you need clarification on in your emails.

BASIC TERMINOLOGY and TRADING CONCEPTS

The Price chart refers to the section where the price movement is shown and will normally be candle format. Some indicators can be overlaid on the price chart.

The indicator chart refers to the bottom part of the chart where only indicator information is displayed.

Bull traders want the market to go up. The bull participants use buy orders as they think the price is going up – they use sell orders as stops in areas where they think the price will go down.

Bear traders want the market to go down. The bear participants use sell orders as they think the price is going down – they use buy orders as stops in areas where they think the price will go up.

Non horizontal: I use the term non horizontal for lines or support and resistance areas that are not horizontal. It is a strange description but it covers all angles that are not 100% vertical or 100% horizontal. This will make more sense as the course progresses and we discuss trendlines and support and resistance areas in more detail.

1.4 COURSE OVERVIEW

The course covers psychological techniques, technical analysis methods, fundamental analysis techniques, Forex trading strategies, money management techniques, trading processes, Trading tips etc all aimed at one thing. Increasing your odds of becoming a money making Forex trader. To be a money making Forex trader you will have to study and read ALL the material to get the full benefit of the course. PLEASE don’t do like I often do – Buy an Ebook course and immediately flip to the trading technique section.

My other objectives with this course are

To convince you that your long term Forex trading mental and psychological attitude (especially your attitude to losing) is the biggest factor contributing to your Forex trading success
To show you the importance of knowing the phase the market is in (trending, wavy or sideways) before trading.
To show and convince you that a straight line is the best leading indicator and TRIGGER for successful Trades
To show and convince you that trading volumes represented by Bull and Bear orders are important trading tools for finding long candles.
To convince you that you need to be able to accept the use of a trading strategy which only relies on low (40% to 60%) success rate to make lots of money. If you get a better result it is a bonus.
To convince you that fast momentum indicators are the best tools for pointing you in the right direction in sideways and soft wavy market conditions.
To show and convince you that you only need a handful of confirmation signals to trade
To show you some great bounce and breakout trading strategies.
To convince you that money management and trading psychology are the most important contributors to a trader’s success, and to show you how 2 simple approaches can resolve money management and psychological problems experienced by many traders.

Please print this course out as soon as you start it. I have found the course has 500% more chance of being read and studied properly and applied if you print it out. The course is meant to be read through twice. The reason for this is that many trading concepts are used before they are fully explained later on in the course. When this happens links to the explanations made later on, are available. I have also included many links to many free external internet resources which expand or clarify many of the concepts. Please do not rush through the material looking for the juicy bits. The longer you take going through the course the better.

I suggest that you do all the practical exercises before moving on to the next section.

It is up to you whether you do these or not. You will get out of this course what you put into it. The ability to trade the Forex Market independently on a long term basis is a priceless skill. Like bicycle riding once you have it, it does not go away as long as you apply good money management and maintain a good trading psychology.

This is a practical course. It is very important to read this course with your charts open and available to test concepts and back trade to find examples of trades.

Understanding the concepts is 20% of the course. Applying them and making them yours is the other 80%. That part I can not do for you. You have to do it. Trading is a practical skill like golf or swimming. You only develop your skill if you spend a considerable amount of time in the water or on the practice tee and competing. If you are going to read through the course to get an idea of what concepts are used you are only going to get 15% of the potential advantages of the course. You need to apply the concepts or back test them.

Depending on your level of experience some of the concepts may require further explanation. Where I have thought this maybe the case, I have added links to that information. The objective of Forex trading is to make money, so if I am using simple techniques to make money, I am happy. You do, however, have to use these simple techniques to make the money – not just give the concepts an intellectual evaluation (you have to get into the pool and swim).

This is a course about hands on Forex trading. In the end you will be able to trade 20 minutes a day using the concepts of the course. It has become very practical to use automated trading packages and Expert Advisors for Forex trading. Although many of the concepts from this course may not be programmable what you will learn will enable you to better understand and evaluate automatic trading packages.

Trading long candles is more of a process than a very specific technique. So if you are looking for one simple trading system (recipe) for successful forex trading, you may be disappointed. The objective is to give you a complete picture of what it takes to make and keep money when trading the Forex market. There used to be an old Forex joke that went around forex training organizations which went something like this:

Do you want to know how to make One million dollars in the Forex market?

…………start with Two million.

My objective therefore is not only to show you how to make money in the Forex market but more importantly how to keep it.

OK, so let’s get started…………………………………………….

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