Forex Introduction

•Each country has a currency
•Each currency gains/loses value daily
•If the Dollar will lose value, it makes sense to
invest in Euro or British Pound, or Japanese
Yen
•We trade FOREX based on the movement of
the currency valuation
What is FOREX?What is FOREX?
Foreign Currency Exchange (FOREX)

Who Trades FOREX and Why?
•4500 World Banks
•Offset potential loss in Global portfolio
•Increase Equity Value
•Thousands of Global Corporations
•Hedge Future Price Contracts
•Reduce Future Price on Stationary goods
•Speculative Investors
•Supplemental Income
•Retirement Hedge
Justin Maynard
jmaynard@markettraders.com

What Factors Affect the Value of a Currency
•Interest Rates – Countries with higher interest rates, have a higher value
because companies borrow money from countries with lower rates and lend
them back to companies and people who live in the higher interest rate. The
bank makes the spread difference.
•Employment/Unemployment Levels – The strength of a country is partly
determined by the amount of employed individuals. If you work, you have money
to spend, thus increasing the economic engine to buy more goods.
•Many other small factors combined – Example: Consumer Price Index,
Consumer Confidence, Producer Price Index, Housing Price Index, New Home
Sales, Manufacturing Index, etc…

How do you make money trading
Forex?
• Buy Low and Sell High, Make pips
• Pip = Price Interest Point = 1/100th
of a
penny
• Each pip is worth 1% of whatever you
invest into the trade.
• $100 invested, each pips is worth $1
• $1000 invested, each pip is worth $10

CandleSticksCandleSticks
•Candlesticks measure the
price action within a certain
time period.
•The market opens at a
price, goes to a low point,
high point and eventually
closes at a price.
•A 15 minute candlestick
measures the price action
within a 15 minute time
period.
•Bullish Candle •Bearish Candle

CandleStick FormationsCandleStick Formations
•Evening Star –
Bearish pattern, signifies a
potential reversal to go down
•Morning Star –
Bullish pattern, signifies a
potential reversal to go up
•Bullish Engulfing –
•Bullish pattern, signifies strong
buying motives, best traded in an
up trend
Bearish
Engulfing –
Bearish pattern, signifies
strong selling motives,
best traded in an down
trend
Tweezer
Tops/Bottoms –
Indecision pattern,
signifies the market has no
current direction, market
could be reversing
direction

Support and ResistanceSupport and Resistance
•Support – An area or price
where the market will go no
lower.
•Resistance – An area or price
where the market will go no
higher
•Support and Resistance is
usually accompanied with a
market reversal or just where
the market stalls before
breaking through and
continuing to go in the direction
of the trend.

Trends and TrendlinesTrends and Trendlines
•Trend – An overall movement
of the market in one direction.
Uptrend or DownTrend
•Trend Line – A line drawn that
acts as support in and uptrend
and resistance in a downtrend.
•Important note – Trends
occur on all time frames. It is
important to always trade in the
direction of the trend.
Remember “The Trend is your
friend until it bends,” Jared
Martinez

Fibonacci RetracementsFibonacci Retracements
•Fibonacci Retracements –
High probability zones where
the market will reverse and
resume the normal trend
direction.
•.382, .50, .618, .786, .86
•Important Note – When the
market moves, it moves in
waves. The waves have
statistical patterns that give
indications where the market
will turn at.

Fibonacci ExtensionsFibonacci Extensions
•Fibonacci Extensions – High
probability zones where the
market will head toward after
the market confirms the end of
the retracement.
•1.18, 1.27, 1.618
•Important Note – Traders
make money by buying the
retracement and selling at the
extension.

ConsolidationConsolidation
•Consolidation – A range that
the market moves up and down
within and does not break
through. The tops are a major
level of resistance and the
bottoms are major levels of
support.
•Important Note – There are
large consolidation ranges and
small consolidation ranges.
When the market breaks a
small range, it usually goes in
the direction of the previous
trend.

Types of TradingTypes of Trading
•Scalping – In and out of the market within minutes to hours. Scalp
traders go for 15 – 30 pips at a time. Their trade strategy consists of
many trades with a high percentage of wins.
•Swing Trading – Buying at the low points and riding the whole
movement to the Fibonacci extension. Swing Traders are in trades
for 1 – 3 days as the market moves 100 – 300 pips. Swing trading
requires very specific entry points.
•Position Trading – Buying at the extreme low point of a move that
will take 6 – 12 months to complete. Typically 1200 – 8000 pips are
equated into a position trade.

What do I need to trade FX?What do I need to trade FX?
•Broker – A FOREX broker is essentially a bank account. The broker executes
the trades that you tell them to. Everything is done electronically. A broker
provides the actual platform to place a trade. Brokers get paid a spread that is
automatically calculated into the trade when you place it.
•Charts – The better the charting software you use, the better decisions you can
make. Information is key and the charting application will help you be more
informed.
•Education – Everything in life is learned. We learn by understanding first, then
practicing daily. More importantly having a tutor and a mentor can drastically
improve your chances of being successful.
•“Success in trading is not a fantasy, it is a formula,” Jared F. Martinez

How do traders succeed?How do traders succeed?
•Understand the mechanics of how the market moves.
• Trends, japanese candlesticks, support and
resistance, fibonacci
• How to put each piece of the puzzle together
•Practice a consistent approach towards each trade.
• The goal is to be consistent, not a hero
• Practice knowing the why you won or lost
•Continual practice
•“Two traders in a room. One has money, the other has the
experience. In the end, the man with the experience ends
up with the money and the man with the money ends up
with the experience.” Jared Martinez

Why do traders Fail?Why do traders Fail?
•No Strategy
•Arrogance
•No patience
•Don’t know when to buy
•Don’t know where to take profit
•Don’t know how to protect from loss
•Emotionally can not handle losing money
•Double down when they lose
•Let it run when they should get out
•Cut out of the trade too early
•Don’t believe that they can be successful
•“Success in trading is not a fantasy, it is a
formula,” Jared F. Martinez

Consistency TradingConsistency Trading
•Consistency Trading is the key to success.
•20 pips per day, 20 trading days per month, equals 400 pips per month.
•$100 investment equals $400 per month
•$200 investment equals $800 per month
•$300 investment equals $1,200 per month
•Once you can be consistent making 20 pips per day, who says that you
can not invest more per trade to make more? No one.
•That is why trading the FOREX market is the fastest growing investment.

Final TidbitsFinal Tidbits
•As the stock market goes down, global investors are pulling their money out
and putting it into more secure investments. They invest in Treasuries from
the US Govt. To do that, they have to convert their money into US Dollars,
thus Dollar Strength.
•As inflation goes up, the Dollar weakens.
•Oil and Gold will increase as inflation hits.
•In 2008, the Dow Jones went from 13,000+ to 6,500. This was a 45% loss in
value. During that same time, the US Dollar gained 5500 pips against the
Great British Pound and 4500 pips against the Euro. That is $100,000 in profit
if you would have put 1k into selling the Euro and 1k selling the GBP.
•Call me today to get your free consultation and see if FOREX Trading is for
you. Justin Maynard 800-866-7431 xt 250 or jmaynard@markettraders.com

Forex Introduction

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