The power to predict basics and advanced forex analysis

1. The Power to Predict
using advanced analysis to trade
today’s Forex market
by Mike Hamilton
Part one: back to basics
Part two: advanced entry / exit strategy

2. My background story
• Traded stocks in the UK from 1984 - using a value system
• Invested in TA training heavily 15 years ago (UK & US)
• Traded commodity futures (grains and oil) in the boom up to 2007
• I now focus on forex day trading. I swing trade stocks (UK / US) and commodities
• Founder of TradeTheEasyway.com - simple modular training
• Managing Director of Sandton Direct Forex Brokers
• Trading style: pivots and cycles………….
Sold 80% of portfolio in early Sept '87 / traded property from '98 / sold .coms Jan 2k
Здравствуйте from
Майк Хамилтон

3. 1 - Are you a scalper?
2 - A intra day trader?
3 - Swing trade / investor?
What type of trader are you?

4. Indicators are lagging / they can confuse the picture
I only use stochastics / macd on big time frames,
I only use 2 moving averages on small timeframes
I'm going to show you the code of trading
how the markets find levels
starting with the basics, then looking at advanced techniques for analysis
Part one: the basics
I’m going to share my trading edge with you

5. • support / resistance
• moving average
• trend line
Main market levels can be found using 3 pivots

6. • each touch weakens this pivot
• so if the level is retested enough times, it will normally break
• the 4th test is the break through normally
• resistance becomes support / support becomes resistance
Pivot 1 : support / resistance

7. Pivot 1 : support / resistance
EURJPY
daily chart 2013 to 2016
3rd test has false break
4th test is works well

8. Pivot 1 : support / resistance
GBPJPY
15 minute chart 12/7/2016
1 – London open – break out
2 – My entry 45 minutes later

9. Pivot 1 : support / resistance
This is a clean chart
No indicators, just a line
How many of you took the trade?

10. • these are guide ropes not defensive lines
• the 50 day average on a daily is the main trend guide line
• the 200 day average needs to be tested sometimes to improve liquidity – if
it holds – great sign of a move coming
Pivot 2 : moving average

11. Pivot 2 : moving average
Blue arrows = support line
Red arrows = touches of 200 ma
Daily EURJPY in 2007 / 08

12. Pivot 2 : moving average
To trade the trend in this chart , only buy above 50 ma
Same chart showing 50 ma
Daily EURJPY in 2007 / 08

13. Pivot 2 : moving average
This chart does not respect the daily 50 ma in the middle period
Same chart showing 50 ma
Daily EURJPY in 2007 / 08
But this later period is very clean and trending well
Many traders counter trend trade with lower
success rates

14. • the daily 50 ma is the trend keeper - if a chart is under the daily 50 I look to short
highs, if its above the 50 I look buy lows
• after a break away from the ma, the first test is normally a fade / pull back which
then continues in the direction of the original break
Pivot 2 : moving average

15. Pivot 2 : moving average
Same chart showing 50 ma
Daily EURJPY in 2007 / 08
Once this daily chart holds above this support line
Respect for the daily 50 tests is MUCH HIGHER

16. Pivot 2 : moving average
50 ma
Intra day EURJPY 15 minute
chart this week
Day traders can use this also!

17. These are a problem for many traders because there are a few ways you can use them
but I will show you how I use them, and later, why these are so crucial
Pivot 3 : trend lines

18. • from the most extreme point, find the next point
so for a market that has sold, find a lower high
• the more touches there are the better
• the bigger the time frame you use for these the better
• I do not use these on 5 / 15 minute charts
Pivot 3 : trend lines

19. Pivot 3 : trend line
EURJPY – daily chart
The higher lower trendline is drawn 1st
the 2nd is a copy of the 1st line
Then dropped down to find the right touches
You end up with a very powerful pattern
Which predicts these big drops

20. Pivot 3 : trend line
EURJPY – daily chart
Simple, but watch what happens when you build this up

21. Pivot 3 : trend line
EURJPY – daily chart
The lower trendline is a copy of the 1st line
Then dropped down to find the right touches
You end up with a very powerful pattern
Which predicts this recent low
Same theory – just bigger picture

22. Pivot 3 : trend line
EURUSD – 1 hour chart Sideways for 2 weeks!!!

23. Put them all together and you can find key pivots
Pivots are what we all need to find
Trend lines and support / resistance help you find very powerful chart patterns
They show you where the big funds are buying / selling
I find so many traders miss this as they do not do the basics on bigger time frame charts!
Basic Pivots summary : Why are these so important?

24. Pivots
USDCAD – daily chart
Where are we going?

25. Pivots
GBPAUD – daily chart
Where are we going?

26. We all know markets don't move in straight lines
but how do they move?
How do they find a better way to predict the level to enter and exit?
Part 2 : advanced forex analysis

27. Trading is not intuitive, you need to know how the markets think and behave
They move is predictive waves,
But these are not random
In the 1920’s Mr Elliot made a comprehensive study
of wave patterns.
This is one of the biggest part of my trade plan
I will show you how to use it in forex
Part 2 : advanced forex analysis

28. Part 2 : advanced forex analysis - waves
Wave 1 - happens when there is a lot of
fear but the buyers step in and break out
Wave 2 - profit taking and lack of support –
this wave must be inside the original move.
Wave 3 - those who missed out on wave
one join in and original wave one traders
are back in – this wave must be bigger
Wave 5 - trend traders keep buying lows
but momentum is now slowing

29. Part 2 : advanced forex analysis
Wave a, b, c, are corrections and the cycle
may repeat if wave c holds above wave 1

30. Part 2 : advanced forex analysis
GBPJPY – 1 hour chart Brexit move
Wave 3 is the powerful move, 3 and 5 are
the completion of the move

31. Part 2 : advanced forex analysis
GBPJPY – 1 hour chart Brexit move
wave pattern 2+ weeks later to close the
gap left by Brexit at 13950

32. Part 2 : advanced forex analysis
Weekly GBPJPY

33. Trading is based on support and resistance and emotion
Markets need a reason, a trigger, to buy and sell
Fibonacci is the best method to measure all of these elements
We have designed a way of using this
so it is the main part of our trading strategy
Part 2 : advanced forex - fibonacci

34. Here is a standard
fib grid showing
extension levels
This is all about
retracements / pull
backs for entries
Combine this with
Elliot wave theory
and you have the
‘code of trading’
Part 2 : advanced forex - fibonacci

35. This is an ideal 5
wave pattern
Retracements
would line up with
fib levels
So entry and exits
can be set by this
This is at the core of
my trading
Part 2 : advanced forex - fibonacci

36. Here is the Dow
winding down from
2007 to 2009
You have wave
counts
And action around
the 50 ma as we
saw earlier
But look what
happens next…..
Part 2 : advanced forex - fibonacci

37. Part 2 : advanced forex - fibonacci

38. Part 2 : advanced forex - fibonacci
This is how my 3 hour GBPJY chart looks.
Do I need ma’s?
Do I need rsi? DO I NEED ANY OTHER INDICATOR to trade this chart ?

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