TRADING GUIDE By Cyril Smaira MACROFOREX HUB Beirut, Lebanon P a g e | 1 Contents 1.1. Dow Theory: ................................................................................................................................... 5 1.2. Support & Resistance: .................................................................................................................... 5 1.2.1. Definition: ............................................................................................................................... 5 1.2.2. Truth and Rules:...................................................................................................................... 6 1.2.3. Dynamic SR: ............................................................................................................................ 6 1.2.4. Identifying Rejections: ............................................................................................................ 6 1.2.5. How to tell when Support or Resistance will break: ............................................................... 7 1.2.6. Trading SR: Support becoming resistance: .............................................................................. 7 1.2.7. Open-drive: ............................................................................................................................. 9 1.3. The Information behind candlesticks: .......................................................................................... 10 1.3.1. Candlesticks patterns: ........................................................................................................... 11 1.4. Wyckoff’s Rules: ........................................................................................................................... 13 1.4.1. Supply vs Demand: ............................................................................................................... 13 1.4.2. Effort vs Result:..................................................................................................................... 13 1.4.3. Cause vs Effect: ..................................................................................................................... 13 1.5. Supply and Demand: .................................................................................................................... 14 1.5.1. Definition: ............................................................................................................................. 14 1.5.2. Supply and Demand Trading: ................................................................................................ 14 1.5.3. Understanding Supply and Demand Zones: .......................................................................... 14 1.5.4. Difference between Supply & Demand and Support & Resistance: ...................................... 15 1.5.5. Tips for using Supply and Demand: ....................................................................................... 15 1.6. Trendlines and Channels: ............................................................................................................. 15 1.6.1. Trendlines: ............................................................................................................................ 15 1.6.2. Channels: .............................................................................................................................. 16 1.7. Chart Patterns: ............................................................................................................................. 17 1.7.1. Definition: ............................................................................................................................. 17 1.7.2. Double or Triple Bottom/Top: .............................................................................................. 17 1.7.3. Head and Shoulders: ............................................................................................................. 18 1.7.4. Inverse Head and Shoulder: .................................................................................................. 18 1.7.5. Triangles: .............................................................................................................................. 19 1.7.6. Wedges: ................................................................................................................................ 20 1.7.7. Further Readings on Patterns: .............................................................................................. 20 P a g e | 2 1.8. Stop Loss: ..................................................................................................................................... 21 1.8.1. Definition: ............................................................................................................................. 21 1.8.2. Stop Loss Placement Tips: ..................................................................................................... 21 1.8.3. Stop Loss Mistakes:............................................................................................................... 21 1.9. Divergence/MACD: ....................................................................................................................... 22 1.9.1. MACD Strategy: .................................................................................................................... 22 1.9.1.1. Identify direction of the trend:...................................................................................... 22 1.9.1.2. Use MACD crossover for opportunities in the direction of the trend: ........................... 23 1.9.1.3. Use MACD zero line to manage risk: ............................................................................. 23 1.9.2. MACD Strategy to Identify Tired Trends: .............................................................................. 24 1.10. The Confluence Concept: .......................................................................................................... 25 1.10.1. Definition: ............................................................................................................................. 25 1.10.2. List of Valid Confluences: ...................................................................................................... 25 2.1. The Economic Calendar: ............................................................................................................... 26 2.1.1. Introduction: ......................................................................................................................... 26 2.1.2. Top Benefits of Using Economic Calendar: ............................................................................ 26 2.2. GDP and Forex Trading: ................................................................................................................ 27 2.2.1. Understanding GDP: ............................................................................................................. 27 2.2.2. Trading Currency Pairs using GDP: ........................................................................................ 27 2.3. Interest Rate: ............................................................................................................................... 28 2.3.1. Definition: ............................................................................................................................. 28 2.3.2. Interest Rates Impact on Currencies: .................................................................................... 28 2.4. Non-Farm Payroll: ........................................................................................................................ 29 2.4.1. Definition: ............................................................................................................................. 29 2.4.2. NFP Impact on Forex Market: ............................................................................................... 29 2.4.3. Most Affected Currency Pairs by NFP: .................................................................................. 29 2.5. Which News Affects Which Currency Pair: ................................................................................... 30 2.5.1. Oil News: .............................................................................................................................. 30 2.5.2. Industrial Metal News: ......................................................................................................... 30 2.5.3. Trade Partners Countries: ..................................................................................................... 30 3.1. Introduction: ................................................................................................................................ 31 3.2. Rules: ........................................................................................................................................... 31 3.3. Position sizing:.............................................................................................................................. 32 P a g e | 3 3.4. Correlated Pairs: ........................................................................................................................... 33 3.5. Trading Journal: ............................................................................................................................ 34 3.6. Trading Psychology:.....................................................................................................................