Fta Modules

FORGE TRADING ACADEMY
FOREX GUIDEBOOK
BY: GIO GAMELO

Thank You
Thank you for investing in this

Forex guidebook kababayan. By
reading this book you will be able
to develop a full understanding of
the forex market to make personal
growth.
This module is written by

Mr. Gio Z. Gamelo with the
intention of helping other Filipino
Forex traders gain the correct
knowledge and skill set to create
another source of income trading
the Forex market.
Contact Me
Tel: +63614379047
Email: gio12611@gmail.com
BY: GIO GAMELO

```
BY: GIO GAMELO

Forex Trading Guidebook
Now that you have made it this far and taken the action to find
out more about the world of Forex, it's time to go in 100%. This
module and the guidance provided by myself will be assist you to
cut out many years of failure, which means becoming profitable
faster. Never the less, the experience that you will personally gain
from the Forex market will build you into a much stronger
person. You will be faced with barriers that will test your skillset,
but the psychological strength that you will build, will improve
your mindset in trading, outside of the market and in everyday
activity.
By absorbing the knowledge presented in this module and within the materials which
you have received from me, you will know exactly how to trade correctly and how to
extract another source of income from the Foreign Exchange market.
BY: GIO GAMELO

About this Guidebook

This module will guide you through all the aspects of the Forex Exchange Market. This
will involve Technical Analysis (price action); Risk Management (banking); and
understanding Psychology (emotions) in order to preserve your capital.
Strategies will be shown in detail and will help you develop a complete understanding
to apply the knowledge constructively to your own Forex charts.
Subjects covered in this Guidebook
TOPIC Section
What is Forex?
Why does the Forexmarket exist? Forex
What sits behind the market and how does it work? Introduction
Trading Terminology
When is the Forex market open?
An Introduction into Risk Management
Disciplined approach to correct risk Risk
Risk:Reward Management
Capital Preservation
An Introduction into Technical Analysis
What is a PIP? Technical
Charts I Technical Analysis Analysis
Candlesticks
Support and Resistance Levels
Market Movement
Trendlines
What is a ichimoku cloud?
Moving Averages
Ranges
Fibonacci
Head and Shoulders Strategy
Market Manipulation on the charts
An Introduction into Trading Psychology
Mood and Emotions Psychology
Invest in yourself and your future
Stick to your own analysis
How to be the perfect trader!
BY: GIO GAMELO

What is 'Forex'?
The Foreign Exchange Market also referred to as 'Forex' or 'fx' or even 'currency
market', is the exchange of one currency for another. The Forex market has become
the world's largest and most traded market in the world, with a turnover excess of $4
trillion per day. Yes, that’s right
$4,000,000,000,000.00. Compare the Forex market to the New York Stock Exchange,
that has a daily turnover of about US $70 billion, and it is obvious that the Forex market
is the largest financial market on the globe. This shows us that there is no limitation
when it comes to making money. However, it's vital to consider investment size and
appropriately managing your capital.
Essentially foreign exchange is most known to be just a simple 2 decimal place conversion
between 2 different currencies. People will probably know this from going aboard and
needing to convert their base currency into the currency in which they need.
But Forex goes much deeper than that, when trading on the currency market, rather
than only 2 decimal places, there are 5. The fourth decimal place is a pip and we will
place trades depending on the pip value. The fifth decimal place is a tick. As traders,
we can choose how much money we will be "betting" per pip. And then the pip
movement will rise or fall instantly after we make the trade execution. Most people won't
even know that the price changes every second. However, looking at the bigger picture,
the foreign exchange market values each currency and commodity, which is
extremely important to be aware of. Most economical data (i.e. news events) won’t
even affect the value of each currency dramatically, it's the technical charts that paint
the overall picture about what really occurs in our major currency pairs.
In essence, Forex currency trading is the act of simultaneously purchasing one foreign
currency whilst selling another, mainly for the purpose of speculation (anticipated
market movement) and profit. Foreign currency values increase (appreciate) and drop
(depreciate) towards one another as a result of a variety of factors such as economics
and geopolitics, but most importantly technical price action. The normal objective of
Forex traders is to make money from these types of changes in the value of one foreign
currency against another by actively speculating on which way foreign exchange rates
are likely to turn in the future and aiming for certain price levels. So in order to be
profitable we need to read what the charts are telling us, and make organised
decisions to place trades with very small risk to our account size.
When trading Forex, it's all about the percentage growth. So let's say you make 10%
return in 1 month. That’s £100 profit with an account size of £1000. Or £10,000 profit,
with an account size of £100,000. The advantage of dealing with percentages rather
than money figures, is that we can scale it down to each trade we place. So if we risk
1% on a trade, and we aim for 3% profit, our account size will drop a small 1% or we will
gain a 3% increase. Rather than aiming
BY: GIO GAMELO

for unrealistic, large money returns instantly, you will build upon developed skill
set and
patience to make consistent percentage returns on a monthly basis.
From my past experience, the Forex market will pay you for approaching each trade like
a business. Don’t try to jump in and make a "quick buck" or "flip" some money, and
treat it like a hobby. If you want to join the top 5% of winning traders, then you need to
stay disciplined. Be more organised than all of the other traders, and record and
document everything along the way. The more organised you are, the more relaxed
you will be. Keep folders to store your screenshots in and develop a logbook system
that works for you. You will only have to work 1 to 2 hours per day to revise charts and
review the bigger picture. So keep things simple and well organised for when you
return to the screen.
Why does the Forex market exist?

I have looked at the main basis why most people will be affected by this Forex data and
why it's simply the biggest market in the world, with the most amount of capital pushed
through each day. Let’s now look at what the real structure to this huge world market
and what sits behind it.
• Price setting
The value of each currency is always rising and falling. These constant movements
determine the value and price of the specific currency (money) or commodity (i.e. Gold,
Silver, Oil, etc,.) The value of an ounce of gold or 1 GBP sterling is set by the market
activities and is essentially the price that someone will pay for the asset. Price setting
will also give a certain currency a value compared to the others out there. But overall
the technical analysis that this guide will go onto, paints a larger image about where
the values of each currency will end up within certain timeframes.
• Commercial Transactions
As well as the long term capital movements, the financial markets provide the liquidity
(movements within the charts) that will make some large commercial transactions
possible. An important part of the foreign exchange market comes from the financial
activities of companies seeking foreign exchange to pay for goods or services.
Commercial companies often trade fairly small amounts compared to those of banks or
speculators, and their trades often have little shortaterm impact on market rates.
BY: GIO GAMELO

• INVESTING
Obviously as a trader, we can take advantage of the opportunity to trade these liquid
patterns in order to make a return on our investments. Investing will be done all over
the world in different sizes. Yet most retail traders (trading from home) will not have
any major impact on the market because their account size is nowhere near as large as
the banks. But in todays economy, it's crazy not to invest in the currency market with
the correct Forex education, as the potential is uncapped. With correct risk
management, you will be able to exceed the average bank interest for a whole year in
just one month, trading the Forex market.
What sits behind the markets and how does

it work?
In contrast to the majority of financial markets, the OTC (Over_The_Counter) currency

markets do not have any physical place or main exchange and trade 24hours every
day via a worldwide system of companies, financial institutions and individuals.
Because of this, currency rates are continuously rising and falling in value towards one
another, providing numerous trading choices and opportunities for us. One of the
important elements regarding Forex's popularity is the fact that currency trading markets
are available 24_hours a day from Sunday evening right through to Friday night (GMT
time zone). Buying and selling follows the clock, beginning on Monday morning in
Wellington, New Zealand, moving on to Asian trade from Tokyo and Singapore, ahead
of going to London and concluding on Friday evening in New York.
Stepping back from that, the bigger picture is that the Forex game is manipulated. 80%
of the Forex market or about $3.2 trillion of the daily turnover is controlled by 10 major
banks across the world. This means that all of the other retail traders only equate to
20% of the daily capital which is pushed through this market. Due to this manipulation
and control made by these big banks, there is high amounts of liquidity in the charts.
This is due to the fact that the 10 major banks need to turn a profit off traders buying
into the market erratically. These extremely large banks with the mass capital, have
one objective; to push all of the capital that is needed against the majority of traders to
take as much profit for themselves as possible. If a standard trader enters the market
without knowledge, this can lead to losing all of your invested wealth and having your
account completely wiped. This is a trap that we hit many times over before
BY: GIO GAMELO

investing our funds the correct way. This doesn’t mean that you can’t profit from this
market, you plainly can, but you have to be extremely conservative when investing
your hard earned money.
The ten top major banks that actually control the FX market:
Rank Major Bank Share volume size

1 Citi 16.11%
2 Deutsche Bank 14.54%
3 Barclays Investment Bank 8.11%
4 JPMorgan 7.65%
5 UBS AG 7.30%
6 Bank of America Merrill Lynch 6.22%
7 HSBC 5.40%
8 BNP Paribas 3.65%
9 Goldman Sachs 3.40%
10 Royal Bank of Scotland 3.38%
Above, you can see that only 3 banking organisations really dominate the mass
market. This isn’t just a small market remember this is $4,000,000,000,000.00 per day.
So you need to learn how to step back and look at what all of the losing traders are
doing through the charts and trade properly. By continuing through this guide book and
following the plan precisely you will be rewarded highly in returns on your investment.
"It’s manipulated for profit” – Always think about what the market makers (banks) are
thinking behind the movements and the history of the candlesticks (covered shortly). There
is a design behind the market as to why traders lose money and brutally get their account
wiped. It’s the harsh reality of trading Forex yet it can be overcome. Just ‘buying low’ and
‘selling high’ does not work, many will fall into that trap, however after clearly defining the
key movements and levels, the technical analysis on the larger timeframes will show
through and give you a much clearer indication regards to the next movement.
Once you decide to start Forex trading, one of the first things you need to do is choose
a broker, set up a demo account and apply the knowledge and discipline you have
extracted from this guide to make sure that you are trading correctly and most
importantly profitably. The Forex broker will connect you to the Forex market. This
means using the correct technical knowledge, risk management and psychology,
you will be able to extract monetary profits through your brokerage account online.
Choosing a reliable broker isn't really important when trading demo money. However,
this decision does become important when it comes to trading with real money. There
are 1000's of Forex brokers out there which offer different deals to suit
BY: GIO GAMELO

your own requirements; it is down to your own preferences and needs. For example,
account size, software, deposits and withdrawal methods, withdrawal time, spreads and
other factors. We will cover this in more detail later within this guide book.
Banks manipulative aspects to consider
As already mentioned, it’s in the large capital market movers (the banks) interest to move
the markets price in a direction that will gain the most amount of profits and net returns.
These may include:
• Pushing the price into areas by where the mass majority of traders will
have stop loss placements to wipe out their active trades.
• To margin call retail traders (make the traders that aren’t using stop losses blow
their accounts with their current open positions).
• To push erratic movements in the direction that might get many traders into the
market one way, but then reverse and continue with the current trend
momentum.
BY: GIO GAMELO

Trading Terminology
Basic trading terms that you will need to know:
Term Meaning
Currency pair Currency pairs are when two types of money are traded for one
another. For example "EUR/USD".
Spread The spread is the difference between the bid or buying price for a
currency and the ask or selling price for it.The average spread
is 3 pips
i.e. you need to make 3 pips before you enter profit. The broker will
take this fee.
Pip A pip is the smallest unit movement on the Forex market. In some
cases, two currencies have four digits to the right of the decimal point
– the furthest right is the pip. For example, if the price moves from
1.1290 to 1.1300 _ that is a movement of 10 pips.
Leverage Leverage refers to the use of credit or margins to trade currencies on
the Forex market. With leverage, an individual can make one dollar
have as much power as fifty dollars. Leverage isn't really important,
so keeping it down to 1:200 is fine as we aren’t risking more than 3%
per trade.
Stop Loss A stop loss is your best friend. If you set a stop loss properly, you
will only stand to lose a small amount of your investment, regardless
of where the Forex market goes. If your trade goes into profit, you
can move the stop loss to lock in a portion of the profit which then
makes that trade risk free.
Take Profit A level in the market where you will bank your profits and be cut out
of the trade with your growth.
Long Buying a currency pair (also known as the ask price). When a trader
will anticipate an upwards price movement.
Short Selling a currency pair (also known as the bid price). When a trader
will anticipate a downwards price movement.
LOT A standard unit size of transaction. On a standard account, '0.01' is
10p per pip. '0.10' is £1 per pip. '1.00' is £10 per pip. And '10.00' is
£100 per pip. (Later within the risk management section, you
will learn about
BY: GIO GAMELO

finding the correct lot size to use, in relation to your account size.)
Bullish Anticipating upward movement.
Bearish Anticipating downward movement.
Confluence A combination of tools showing a same level of importance on the
chart.
Entry Point A price in the market where you enter your position at.
Exit Point A price in the market where you close your position at.
Broker The organisation that connects your trading account to the Forex
market.
Risk:Reward This amount of risk compared to the amount of reward on a trade in
a ratio.
(1:3) 1% risk to gain 3% reward.
When is the Forex market open?

The Forex market is tradable from Sunday evening 22:00 PM (London GMT Time) right
through to Friday night at 22:00 PM (London GMT Time). As the market is open for a
long period of time, this gives much opportunity to plan and execute trades, hold them
and do all of the documentation. It is important to not spend all of your time trading! A
great quote we found online is "5% of your time should be trading, 95% should be
spent doing something else". Remember, trading is all about the freedom in terms of
your finances and your free time. Only spending a few hours each day monitoring the
bigger picture, is all you need to stay profitable and maintain a consistent income.
BY: GIO GAMELO

(Above is a diagram of the time zone sessions that play out each day)
A lot of traders will typically only enter the market at certain hours of the day, however
through my experience within the market, we will enter the market upon reviewing the
complete plan of how the trade will play out. This could be at anytime during the week. I
tend not to open a position on a Friday evening due to the market closing (UK time). So
in this case we would have time to review the Risk to Reward and apply the
appropriate risk to the setup over the weekend. As you read further through this
guidebook, you will gain a greater understanding of the amount of risk to apply to a
trade in different conditions.
The best trading hours
I have found that good trading hours are during the London session, which is when the
volatility is high. By finding your setup correctly and then placing your trade on the
morning, your trade will yield all profits made during these higher peak times of
liquidity. More information about time management and trading hours will be included
during the ‘Psychology’ section of this guidebook. This will help you understand the
emotion and thought process that you will need to obtain in order to stay relaxed,
enjoy trading and most importantly make loads of money.
(In the above example, the market has moved sideways, then upwards, then
downwards and finally upwards. This all occurs in one single day and the different
market sessions are marked with separate boxes.)
Does the market move in different directions throughout the different time zones?
I have seen many traders get caught up in the emotions whilst holding a trade
position. It’s important to understand that the market will move in different directions
as we go through the different time zones of the trading day. This is because of the
business hours of trading operations around the world and the different levels of buying
and selling pressure.
BY: GIO GAMELO

As the market moves in different directions, this can throw many traders into a
downwards spiral due to the lack of patience when sitting in a small loss or breakeven
for a short while. When you have defined your correct trading bias within the market
and in your trade, you will need to adapt the skills to be patient and know when to sit
on your hands to wait for the profits to come in.
BY: GIO GAMELO

RISK
MANAGEMENT
BY: GIO GAMELO

An Introduction into Risk Management

Manage your risk effectively – Risk management in trading is essentially protecting
your deposit. Each trade will be either be a small loss to your account size, or a decent
growth.
Before we look at the ‘technical analysis’ behind trading, we need to cover the very
important topic called ‘risk management’. Without applying this correctly with solid
discipline you will simply fail. Risk management is simply banking. All of the risk
management you complete on your own account should be prepared and professionally
managed during every single trade. Make sure that you keep a record of the trade
results you place and document all of your trades _ this includes losses!
Cutting your losses short
Forex bankroll management or 'risk management' can make the difference between
your success or sudden defeat within Forex trading. You can have the best trading
system in the world with a high win rate and still fail without proper risk management.
Risk management is a combination of multiple ideas to control your trading risk. Limiting
your trade lot size, the number of trades placed at once, and also knowing when to be
in trades are the key components to risk management. You should only be placing a
maximum of 3 to 5 trades per week. You will face losses, most likely 20% to 40% of
your trades will result in you losing money, but because of the small risk and larger
rewards, you will be profitable. Even if you won 90% of all your trades, you would still
need to lose 10% of the time. So you have to face them and control your emotions.
Your losses should never be more than 3% of your trading account anyway. This means
that it would take almost 40 trades in a row to have any impact on your investment.
The importance of risk management
Risk management is one of the key concepts to surviving as a professional Forex

trader. It is an easy concept to grasp for traders, but more difficult to actually apply.
Brokers in the industry like to talk about the benefits of using leverage and keep the
focus off of the drawbacks. This means that there are many mental barriers to trade with
far too high risk in order to make massive returns instantly. The brokers will tell you this
because, the more you trade with, the more net profit they will be taking. It’s important
to stick to your own rules that you define yourself. Only risking 1% per trade with a good
strategy will make you profitable. If you risk more than 3%, you only have to lose a few
trades in a row before your emotions come in and throw more money away. Your risk
will increase to try every chance to claw back the funds you lose and it becomes a
slippery slope before it’s all gone. This is how important it is to risk a small amount of
your investment (1% to 3% max) and focus on gradual, long term growth.
BY: GIO GAMELO

(The above image shows a simple trade and position on a real account that was
taken by me, which shows how simple we keep our banking positions. Make sure that
you know why you are in the market, and treat each position with care. Protect your
account and discipline yourself.)
The trick is to keep the banking, little and often. You don’t want to see more than 4
trades open at once. In addition, keep the positons and charts clean and simple like in
the image above. This will help with your trading emotions and keep your mind clear
about where your current investments are. Each trading decision to open and close
trades should move swiftly and effectively.
Disciplined approach to correct risk

A big factor to understand before entering the market is the risk per trade. You should
always be aware of how much trading capital you have available. Risk per trade should
always be a small percentage of your total capital. A good starting percentage could be
1% of your available trading capital. So, for example, if you have $5000 in your account,
the maximum loss allowable should be no more than 1%. With these parameters your
maximum loss would be
$50 per trade. A 1% loss per trade would mean you can be wrong 100 times in a row
before you wipe out your account. This is an unlikely scenario if you have a proper
system for stacking the odds in your favor. That is when the technical analysis will come
into play and something very important called Risk:Reward which will be covered later
on. Overall you want to keep risk down to a minimum. So anything between 0.5% risk to
3% is acceptable to stay profitable.
BY: GIO GAMELO

How do I know the amount of risk to apply to a trade?
This is a question that I get asked a lot. The amount of risk to use will all depend on the
trading setup, the timeframe, the Risk:Reward and amount of pips. However, we can
decide the risk by judging the whole scenario. Say if you were risking 50 pips on the
4_Hour timeframe, then you will only need to risk 1% because the trade won't last for
weeks and the returns will come in more quickly. In fact, the trade may only last for 24
hours. However more long term setups, such as a weekly range bounce, with 200 pips
at risk, you should apply slightly more risk due to the fact that you may be holding the
trade for a short while and make the trade worth the wait.
Another example might be if you were looking to place a long term trade, anticipating
that your target will hit after a week or two and you were using 150 to 200 pip stop loss
then naturally you would use higher risk of 2% to 3%. If you place a short term trade,
with only 40 to 80 pips and the target looks achievable in a shorter period of time, then
apply smaller risk of around 1%. By doing this you will naturally find the easy balance
and level of risk. If you were to always risk 3% with only 20 to 30 pips stop loss, then
this can lead to less profitable performance. So make sure that you consider the
trade, and slightly increase or decrease risk as and when appropriate. Overall all traders
have different trading styles but this level of risk approach needs to be implemented, as
this will help with growth and overall income.
The dangers of over risking capital
The dangers of risking too much capital is that it causes traders to come to the trading
platform with the mindset that they should be taking large risk and aim for the big bucks. It
seems all too easy for those that have done it with a demo account, but once real money
and emotions come into play, trading changes. This is where risk management is
important to stay disciplined. By calculating the correct lot size with appropriate risk, you
will be able to be in trades without it affecting your emotions. You won’t feel the need to be
always looking at the trade, and when you do take a loss, it won’t affect your emotions nor
will you want to make it back because the loss is so small.
BY: GIO GAMELO

How to work out your correct lot size:
(The above image shows the tool to enter your LOT size within the program ‘Metatrader’.
If you are using a different platform then this image should look similar to the one you are
using.)
When it comes to positioning your correct trade sizes, most will not know what to do,
they may even use the highest lot size possible in order to achieve the largest profits.
However, by using the largest lot size possible, you would only have to lose one single
trade in order to wipe out all of the money in the account. Yet, by correctly calculating
the lot size for the risk you are applying, by the amount of money in your account, you
will be able to lose 40 to 50 trades before wiping out your account. By allowing this for
the worst_case scenario, your mindset will instantly adapt to more of a longeraterm
trading style. You will have losing trades, guaranteed. You will need to look at these
losses as ‘small overheads’ that will lead you to the larger profits and rewards. (We will
cover more of this within the psychology section later.)
The LOT size calculation:
Not many traders will actually be using the correct LOT size, or even know how
to calculate the LOT size to use in relation to their own account size.
(Use the steps below in order to calculate the LOT size to use on each trading setup)
1. Total Account size divided by 100

2. Then times this number by the Risk in % that you are using
3. Divide this number by the total amount of pips stop loss
4. Finally move the decimal place left once
BY: GIO GAMELO

YOU SHOULD NOW HAVE YOUR CORRECT LOT SIZE TO PLACE THE
TRADE
Example:
Let’s say I have £10,291.23 in my trading account; I want to short the

EUR/USD with an 80 pip stop loss at 2% risk.
£10,291.23 divided by 100 = 102.91
£102.91 times by 2 = 205.82
205.82 divided by 80 = 2.57
Move the decimal place left once =
0.25 LOT SIZE TO USE = 0.25
1.25 Lots is then what you would enter into ‘Metatrader’ along with your stop loss
placement and target.
(Make sure that you do this calculation for every single trade you place! Don’t be lazy!)
As your trading capital grows, you need to earn the right to trade bigger lot sizes in
order to achieve larger monetary profits. As long as you adapt the quality risk
management to each position, keep it slow, and steady, you will be rewarded with an
uncapped income from this market.
BY: GIO GAMELO

Risk:Reward
(Ratio between your amount of risk and amount of reward on one trade.)
In general terms Risk:Reward is risking a small percentage of your capital in order to

achieve a larger return on the investment. You will need to make sure that your reward
is always larger than your risk! So you may hear 1:2 Risk:Reward. So in this scenario, if
I'm risking 2% and it’s a 1:2 Risk:Reward I will gain 4% return if I win. Alternatively, I will
simply lose 2%. Risk:Reward is another way you can increase your chances of
profitability; trade when you have the potential to make 3 times more than you are
risking with a 1:3. If you give yourself a 1:3 reward to risk ratio, overall you have a
significantly greater chance of ending up profitable in the long run. By using effective
Risk:Reward, you will only have to win half of all trades you place in order to be
profitable. Example on the charts:
BY: GIO GAMELO

(In the above image, it shows the red area as my level of risk and green area as my
reward on this specific trade. I was risking 2% and at the time of this screenshot,
you can see that my trade has moved into roughly 2% profit with more room to the
downside.)
Take a look at the table below with an example of 10 trades all using a 1:3 Risk
Reward and 2%
risk each:
Trades Placed Loss Wins

Trade 1 2%
Trade 2 +6%
Trade 3 2%
Trade 4 +6%
Trade 5 2%
Trade 6 +6%
Trade 7 2%
Trade 8 +6%
Trade 9 2%
Trade 10 +6%
Totals 10% +30%
(Here this table shows that I make 10 trades, and I make 5: 2% losses, and 5: 6% wins.)
As you can see, in this example with only winning 50% of all trades it can still lead to
20% gain, countering in the losses. This is a very brief example but it shows you how
important it is to focus on using at least a 1:2 minimum risk reward ratio. If you were
to reduce your position size (i.e. LOT size), then you could widen your stop to maintain
your desired reward/risk ratio. Now, if you increased the pips you wanted to risk to 50,
you would need to gain 150 pips. By doing this you are able to bring your
risk_to_reward ratio somewhere nearer to your desired 1:3 Risk:Reward ratio.
BY: GIO GAMELO

Capital Preservation
Once you figure out how much to allocate to your real trading account, you have to
strive hard to protect your capital and the profit you make. You must replace your all
too human urge for profit with a desire to protect your account from losses. The simple
reason is that you have to survive in order to win. You have to overcome transaction
costs, a sophisticated competition, the element of volatility and randomness, human
emotions like greed and fear, false expectations, inexperience , lack of knowledge,
and also you have to construct a sound trading plan that limits the risk of loss.
Needless to say, there are so many factors that make it easy to lose in Forex, which
makes it very important to learn how to properly lose, which is the basis behind sound
money management. By ‘properly losing’ we mean that you lose a small fraction of your
account and you don’t go chasing it back instantly.
To preserve your capital as much as possible, you should follow these two rules:
1. Only risk a small fraction of your account. (MAXIMUM 3%)

2. Locking in profit with the stop loss.
Only risking a small fraction of your account
As mentioned through this guide so far, it's evident that you need to only risk the small
percentages to stay profitable. If you risk any more than 3% on any trade, chances of
surviving are very slim.
(In this image above, I have dragged the stop loss past my entry point and into profit. By
doing so I have actually taken out all of the risk on this setup.)
BY: GIO GAMELO

Locking in profit with the stop loss
ALWAYS USE A STOP LOSS! It's like putting on a seatbelt on before you
drive off.
Once you know that a stop loss is always essential, moving stop to breakeven is based
upon your understanding of the market, which implies that you had a plan when you opened
a position. In addition, knowing where lock in profit is, is dependent on how much profit you
are in and the structure of the previous market movement. Overall, a great rule to apply to
your trading plan is to cover your risk at break even and move your stop loss to your
exact breakeven point. Make sure that you do this, every time you are floating in
50 pips+ profit. You will then find your results improve dramatically and your emotions
will become even more relaxed.
Not trading can also be a form of risk management
When trading for the first time, you may feel the urge to always be in a trade. This
addictive effect can be dangerous to the volume of money in your account. This is
because you will be opening too many trades; this leads your account to be overexposed
to the market "Less is more". Think of trading as a slow marathon rather than a 100_meter
sprint. Always look at the bigger picture from the charts to your account growth. If you
make 4% by Wednesday, then don’t trade for the rest of the week. If you make 20% in 3
weeks, then don’t trade the fourth week. Always step back, document what you see and
pick out the best opportunities to trade. By simply monitoring the markets for short periods,
briefly, this will allow you to think about the trading scenarios and what would really be a
profitable trade. And not simply a rash, erratic click of the button.
Learn how to sit on your hands and wait for the market to become tradable.
BY: GIO GAMELO

You have to know that by being a trader means that you only have to work very few
hours each day. This means that 90% of your time should be spent doing something
else. Many will also think that you have to quit your day job to trade the market correctly
but this is a false statement as you could review the markets for short periods of time
in the morning and in the evening.
By simply monitoring the market movements you will gradually grasp the balance
between trading and your current lifestyle.
Non Farm Payrolls
Don’t trade Non farm payrolls (the first Friday of every month)
The non_ farm payrolls survey is released by the Bureau of Labor Statistics on the first
Friday of each month. I do not trade this day and I recommend for you to close
trades or make sure that you have locked in profit. The data can push so much capital
through the market and can disrespect the technical analysis, which you create. The
data is released to remote individuals and instructors; the non_farm payrolls data is also
closely looked at by the Federal Reserve in the US as part of the process leading to the
interest rate decisions. The Federal Reserve can often choose to reduce its main rate
in case that the non_farm payroll data is showing a labor market under pressure, with
obvious consequences for the Forex market due to the monetary decisions.
The main value of the non_farm payrolls survey is born of its timeliness and depth.
The report covers the entire U.S. economy, with the exclusion of farming sector jobs
which form a tiny fraction of the overall labor market. The NFP sample size is extremely
large, and in contrast to the weekly jobless claims data, the non_farm payrolls survey is
released only twelve times each year, with more volatility and less reliability. Because
of this we preserve our wealth by not trading these days 12 of the year.
BY: GIO GAMELO

(The image above shows some high volatility on the charts that was impacted by the
NFP.)
This is why I simply stay out of the market and create a positive plan for the following
trading week ahead. This will help with your trading emotions and will avoid getting
caught up with risky sharp moves that may not fall in alignment with your current trend
or bias.
Conclusion to Capital Preservation
The advice, “Try not to lose too much money,” is simplistically cogent. All traders
make mistakes and have losing trades. You won’t win every trade and losses should
be expected. The worst thing that can happen is that after some initial success with
small size trades, you think you are a trading ‘natural’ and you take more aggressive
positions, only to find that honing your trading skill is still a work in progress. This was
the process and development that we went through. For many, many years. Our
account was going sideways but this was simply a stepping stone to profitable trading.
You have to remember your long term goals. Making 100% gain won’t happen
overnight. But it can happen within 12 months.
There are no cutting corners in learning how to trade, and there are no graduation
ceremonies because this is a never ending school. You will feel like you hit the wall
and it’s difficult to hold trades for long periods of time. Sometimes this will happen when
learning and when it does, it's best to take a step back, analyse what you did, and why
it went wrong. Then learn from it to push forward.
BY: GIO GAMELO

t
TECHNICAL ANALYSIS
BY: GIO GAMELO

An Introduction into Technical Analysis

Now it’s time to learn about the creative and powerful side to Forex. Depending on your
technical ability on the charts, combined with discipline, you may find yourself winning up
to 80% to 85% of all your trade activity. It’s always imperative to keep all of this section
organised to reduce confusion. We also recommend that you only look at 4 to 6 currency
pairs overall. The idea behind this is to build and develop your understanding to a select
few currency pairs. This gives you a chance to actually comprehend and program the key
levels in your mind so that you ‘live the pairs out’ so to speak. You want to master your
craft over your chosen select pairs and execute the trading setups that come to you. If you
trade in this way, with the risk management in place, it will heavily increase your chance to
succeed within this industry by making consistent returns.
The major currency pairs
Currencies are designated by three letter symbols. The standard symbols for some of the
most commonly traded currencies are:
EUR – Euros
USD – United States
Dollar CAD – Canadian
Dollar GBP – British
Pound
JPY – Japanese Yen
BY: GIO GAMELO

AUD – Australian Dollar
CHF – Swiss Franc
There are so_called majors, for which around 75% of all market operations on Forex are
held:
EUR/USD (euro)
GBP/USD (pound)
USD/CHF (Swiss)
USD/JPY (Dollar
yen)
As we see, the US dollar is represented in all currency pairs, thus, if a currency pair
contains the US dollar, this pair is considered a major currency pair. Pairs which do not
include the US dollar are called "cross currency pairs", or 'cross rates'. The following
cross rates are the most actively traded:
EUR/CHF = euro_franc
EUR/ GBP =
euro_sterling EUR/JPY
= euro_Yen GBP/JPY
= sterling_ Yen
AUD/JPY =
aussie_Yen NZD/JPY
= kiwi_Yen
How do currencies work?
As you might already be familiar with, a currency pair is simply the conversion between
the two
currencies. For example:
EUR/USD – if the price is at 1.2984, then this means that for 1 EUR you will get 1.29
USD. The first currency is always 1 and the second currency is always how much you
will receive for the value of 1 of the first currency. Another example could be, GBP/USD.
BY: GIO GAMELO

Let’s use EUR/USD as an example _ if the EUR/USD chart goes up and the price rises,
then this means that the EUR is gaining more strength than the USD. If the chart was to
drop and the price was to go down, then the USD will become much stronger than the
EUR.
What charting software to use?
In your trading journey, you will only need to concern yourself with two platforms. On
one you will produce all of the technical market analysis, and the other you will complete
all the trade positions.
• Metatrader – (supplied by broker) ONLY USE THIS PLAFORM TO ENTER

THE TRADING SETUPS. DO NOT USE THIS TO DRAW ANALYSIS.
(www.metatrader.com)
• Trading View – (www.tradingview.com) USE THIS PLATFORM TO
PRODUCE ALL
TECHNICAL ANALYSIS.
Before we dive into the ‘technical analysis’ and how to correctly identify the market
structure, the most important thing to begin with is in fact the charting software. The
fact is that 95% of traders actually lose money within this market, and those 95% are
using Metatrader to produce chart work and technical analysis on a daily basis. It is
important to understand that the platform called ‘Metatrader’ is great for entering
trades only, by keeping all of the technical chart work away from the banking side of
trading. It's also important to know that the brokers feed the market data to you through
‘Metatrader’ and can be misinformed by retail traders without correct technical
understanding which will then cause them to lose money and not gain any real
consistency from this market overall. The technical analysis should be broken down
only on either 'Trading View' or software for windows (PC) users ‘Sierra Charts’.
Trading View offers real_time data as well as great chart functionality which will help
you break down the charts correctly and efficiently.
BY: GIO GAMELO

Metatrader
The previous image is a screenshot of how the application ‘Metatrader’ looks when
downloaded from your broker. There is very little in the way of charting tools and
functionality. In addition, the data fed through the program can lag and become almost
impossible to read. The only thing that this software is good for is placing trades and
monitoring positions . Keeping the banking and positioning away from the technical
analysis can actually work well and keep everything neat like a business should be.
Positioning should be done professionally as this will define the overall profitability
within this market.
Trading View
Trading View is a fantastic charting software, which will enable any trader to effectively
draw on technical analysis and predict the next movements within the market. You can
clearly define and paint the picture regarding the next movement of the currency pairs,
which you will look at.
(Above is a small screenshot of the Trading View software as it looks when you open a
new account. The customisation tool makes this charting software completely ahead
of any other
BY: GIO GAMELO

program with Forex market data feed in. You can change colours to suit your vision and
clarity
of the candlesticks and change the way in which the software functions for you.)
(The image above is of the settings tab which can be used on trading view to change
the colors and layouts in order to help technical performance on the charts) *Please
note that we will setup your charts within your course time for you, so you will be seeing
the exact same setups as us.
What is a PIP?
Overview:
Pip = "price interest point".

A pip measures the amount of change in the exchange rate for a currency pair.
For currency pairs displayed to four decimal places, one pip is equal to 0.0001.
Some currency pairs may have only two decimal places for the pip (0.01). Some
brokers now offer fractional pips to provide an extra digit of precision when quoting
exchange rates for certain currency pairs. A fractional pip is equivalent to 1/10 of a
pip.
A pip is usually the forth_decimal place within a currency pair. The exceptions are
mainly the
JPY (yen) pairs, which go by the second decimal place. Some Forex charting platforms
will also
BY: GIO GAMELO

give you five decimal places, such as 0.95241. The fifth decimal place is called a micro
pip or a tick. A pip in this scenario would still be the number 4 because it’s the forth
decimal place.
A sample trade Scenario:
(Below was a BUY trade that made 192 pips)
As you can see in the previous image the price moved from 0.6570 all the way up to
0.6762. See the differences between the 2 different prices and the pip movement. This
will be how it looks for all of the currency pairs that you will go onto trade. You will win
and lose trades though remember. Therefore, your losing trades will generally be a very
small amount of pips compared to the trades that you win.
Charts – Technical Analysis

The Forex Charts will be a huge part of your trading overall. You will be reviewing the
charts everyday or at least every other day. You will need to make them look good and
you will need to set up the charting tools and colors to suit your preference. It is vital
that you keep your charts clean, simple and document them as you go along. But the
key is to not over complicate them and look at them for too long. If you are spending
any more than 2 hours per day, looking for trades, then this will most likely lead to
losing money. If there is no scenario playing out, then don’t trade it. If nothing looks
like it's happening, don’t try to find the next move. Trades will come to you if you let
them. Don’t go trading every trendline break, bounce and reversal. Only trade the
setups that fall in alignment with your plan. A good trade isn't one that makes you
money, but the trade that goes with your plan. You will need to make sure that you enter
a trade because of the entry rules that you set yourself.
BY: GIO GAMELO

(Here is an example of a chart using ‘tradingview.com’)
Above is an example layout of a chart which you will be working with. The chart above
may confuse you right now but as you work your way through this guide you will gain
complete understanding regards the charts and defining the reasoning for each move.
It's important to not get complicated with the candlesticks directly and look at the much
larger market movements.
Candlesticks
(above is an example of a typical candlestick in its simplest form that will represent the
open +
close price within a specific timeframe)
The image below represents the design of the typical candlesticks. There are three
specific points (open, close, wicks) that are used in the creation of a price candle. The
first points we need to consider are the candles open and close prices. These points
identify where price began and concluded for a selected period and will construct the
body of a candle. If you are viewing a daily chart for instance, these points will
represent the daily open and close price. It
BY: GIO GAMELO

is important to note the colour of the body of a candlestick (red for down and green for
up). Knowing this, candlesticks can help us quickly identify if the market is trading
higher or lower for a selected time frame.
Next we have the wicks of our candlesticks, which may also be referred to as the
candles shadow. These points are vital as they show the extremes in price for a specific
charting period. The wicks are quickly identifiable as they are visually thinner than the
body of the candlestick. This is where the strength of candlesticks becomes apparent.
Candlesticks can help us keep our eye on market momentum and away from the static
of price extremes.
BY: GIO GAMELO

Types of Candlesticks
Now you know the obvious main structure to a simple candlestick, let’s look at the different
types of Japanese candlesticks. We will now run over five different candlesticks. We will
look at why they are created and what they might mean for further market movement.
BULLISH ENGULFING
Here is the first candlestick that we will look at; the ‘Bullish Engulfing’. The
characteristics of this candle have shown a large green bar that completely wipes out
one or more of the previous candles. The bullish engulfing is named because this
candle surrounds or engulfs the previous one, simple as that. These should only be
properly looked at on the daily, weekly and monthly timeframes for it to have any kind
of importance. You may find these on the lower entry timeframes, but they are less
strong and may not give you an indication of the overall trend in play.
The bullish engulfing is most significant when it occurs after a prolonged downtrend.
On the day of the bullish engulfing, prices will often begin the day by falling. However,
strong buying interest comes in and turns the market around.
The bullish engulfing represents a reversal of supply and demand. Whereas supply has
previously far outstripped the demand, now the buyers are far more eager than the
sellers. Perhaps at a market bottom , this is just short_ covering at first, but it is the
catalyst which creates a buying stampede.
When analysing the bullish engulfing, always check its size. The larger the candle, the
more significant the possible reversal. A bullish engulfing which consumes several of
the previous candles, speaks of a powerful shift in the market.
BY: GIO GAMELO

(In the image above, you can see that the bullish engulfing highlighted in the blue box,
actually defines the next shift to the upside, which you can see has played out correctly
in the long term. This actual bullish engulfing here engulfs at least four of the previous
candles off an area of support, which shows strong momentum to the upside. This
candlestick in alignment with other entry confluences can lead to entering into the
market with a buy, anticipating more upside movement.)
(Above is another example of a bullish engulfing candle, which adds momentum to the
chart. Here we pushed up of a strong support level, which lead to this green candle
engulfing eight or nine previous candles.)
BY: GIO GAMELO

BEARISH ENGULFING
The bearish engulfing carries the same characteristics as the bullish engulfing candle
but however this time the candle is going down. A bearish candle occurs when a red
candle completely wipes out the previous green candle. Typically, a strong bearish
engulfing at a key level of potential reversal, will wipe out 2 to 4 previous candles. This
will show a strong shift in momentum to the downside.
Again only use this candle as confluence to a setup on the Daily, Weekly and
Monthly
timeframe.
(The image above shows how the momentum in the bearish candlestick, pulls down the
movement. This bearish engulfing also takes out around 5 to 6 of the previous candles.)
BY: GIO GAMELO

THE HAMMER
The third candlestick which we will now look at is the hammer. The hammer is a bullish
candle that suggests more upside momentum is yet to come. This candlestick may be
obvious as to why it takes the name of the ‘hammer’ _ it’s due to the structure outlining
the same figure as a hammer.
This hammer can be marked off a reversal, off a bottom or off an significant support
level. On the day of the hammer, prices decline. They hit bottom and then rebound
sharply making up all the ground – and sometimes more – compared to where the
sellaoff started. The candle shows that the buyers have seized control. A bullish
candlestick on the following day confirms this analysis which then can be bought
upwards if the trend and various other confluences are in place. This candlestick
should not have any wick at the top or a very small one.
(The bullish hammer as shown in the screenshot above, displays the correct structure
of what to look out for when trading this candle in your own analysis. It shows a bounce
of support and a shift in momentum to the upside.)
BY: GIO GAMELO

THE DOJI.
The doji is the candlestick that is shaped like a cross. A doji has no real ‘body’. This
can mean that there is same pressure between supply and demand. It is a time when
the optimist and pessimist, amateur and professional are all in agreement with each
other. It can also show some indecision within the markets direction. This market
equilibrium argues against a strong uptrend or downtrend continuing, so a doji can
often mark a reversal day.
A doji in an overbought or oversold market is therefore often very significant. The

opening of the next day should be watched carefully to see if the market carries through
on the reversal. Note, a candle with a very small real body often can be interpreted as a
doji. In addition, this means that the same rules will apply.
(In the previous image, the small doji is shown within the blue box plotted on. Also, note
that the candles surrounding it are also very indecisive. This is a form of market
manipulation.)
BY: GIO GAMELO

GRAVESTONE DOJI
The gravestone doji occurs far less frequently than the common one, but gives even a
clearer signal. At the top of an extended move, it says the bulls tried to move the market
higher and couldn’t do it. The market cannot sustain the probe to new high ground
within the market price. It opens and closes at the exact same level creating the
appearance of a tombstone.
Overall, this candlestick conveys a very bearish sentiment to the price action. This
candlestick can add confluence to a sell or short setup with a break of support or
trendline.
Example of the Gravestone Doji on the chart
(You can see from the example that this gravestone doji has driven the price down
and has continued the bearish movement within the downtrend.)
Candlestick Formations
Now that you know what a candlestick is, the candlesticks will work together to form
patterns and produce price action that we can then work with. When price is at certain
key levels on the chart, then we can read what the candles are showing us. So when
we say ‘candlestick formations’, we mean two or more candles that show predictable
future movement.
BY: GIO GAMELO

Now we will cover the different candlestick formations and movements to show you
what to look out for and what they mean to the price action.
Morning Star
The main characteristics of a morning star formation:
• The initial first bar is a large red candlestick located within a defined downtrend
or down movement.
• The second bar is a small_bodied candle (either red or green) that
closes below the first red bar.
• The last bar is a large green candle that opens above the middle candle
and closes near the center of the first bar's body.
BY: GIO GAMELO

The morning star formation is in fact a bullish candlestick pattern that is usually
formed at the end of a downtrend or previous downwards movement . The pattern
itself is pictured above, and it should be noted that the bullish morning star consist of
three different candles. The first candle will show some momentum from the downtrend.
The second candle will show the lack of bearish momentum. Price will make one final
attempt at lower lows here, with the candle closing higher than the open price. Dojis
and hammer candles are often found in this position.
The third candle in the bullish morning star pattern is the actual reversal signal. An
extended green candle should be seen in this position beginning a new swing in bullish
momentum. Ideally this should be a bullish engulfing candle with its high extend well
above the high of the previous candle. This strong surge in price will convey fresh
buying pressure on the pair with bearish traders still exiting the market with open short
trades. The greater the advance of this secondary candle declines, the stronger the
reversal signal is considered.
Evening Star
BY: GIO GAMELO

An evening star is a bearish candlestick pattern consisting of three candles that have
demonstrated the following characteristics:
1. The first candle is a large green candlestick located within an uptrend.

2. The middle candle is a small_bodied candle (red or green) that generally closes at
its open price or near.
3. The last candle is a large red candle that closes near the center of the first bar's body
or
lower.
Evening star formations can be useful in determining trend changes, particularly when
used in conjunction with other indicators and technical knowledge. It mainly shows the
shift in momentum and offers a confluence to a downside target.
Tweezer Tops
The Tweezer Top candlestick formation is a double candlestick bearish reversal

pattern whose appearance at the top of an uptrend signals that it is time for bearish
reversal. The Tweezer
BY: GIO GAMELO

Bottom on the other hand, is a double reversal candlestick formation whose appearance
at the bottom of a downtrend and is a signal that a bullish reversal may occur.
The Tweezer Top candlestick formation is made up of:
• 2 candlesticks that show rejection from the upside

• Can add confluence to a resistance level with anticipation to go short
• Long shadows or wicks above the similar sized bodies
What happens here is that the Day 1 candle is an indication of the prevailing uptrend,
pushing the day at highs but then sellers now enter the market and drive prices lower,
eliminating the gains of the Day 1 candle upsurge. The close of the Day 2 candle below
Day 1’s opening price is an indication that the market sentiment has changed to a
bearish one, and it is not a surprise when prices fall from there in later candles.
Tweezer Bottoms
The Tweezer Bottom candlestick formation is made up of two candlesticks:
BY: GIO GAMELO

• 2 candlesticks that show rejection from the downside

• Can add confluence to a support level with anticipation to go long
• Long shadows or wicks below the similar sized bodies
In this example, we can clearly see the Tweezer bottom which has formed at the
bottom of the down_trend to signify that the trend is about to change, which it promptly
did. As with most candlestick patterns, the best signals from the Tweezer patterns are
achieved when they are combined with other forms of technical analysis that indicate a
reversal of momentum, such as the support level or Fibonacci D extensions. With the
oversold signal going with the Tweezer bottom for a bullish signal and the overbought
signal going with the Tweezer top for a bearish signal to place a short trade.
Inside Bar Setup
The Inside Bar, is a popular candle formation that only requires two candles to form
itself; as this is a direct movement on short_term market sentiment looking to enter
before the ‘big
BY: GIO GAMELO

moves,’ that may then occur within the market. An Inside Bar is characterised by the
inside candle’s price action being entirely covered from price action the day before.
The diagram above illustrates a textbook inside bar.
Some traders might look to trade inside bars as reversal patterns; imagining that after
price has trended up (or down) for an extended period of time – the ‘pause’ in price’s
movement (representing the inside bar) precedes a reversal of the trend. In this case,
the inside bar is looked at for a shortaterm trade, in the counter_trend direction (with
the goal of holding the trade for less than 10 candlesticks on average).
However, there is another way to play inside bars; and this is rooted directly from what
this candle is NOT telling us. When we see an inside bar form on our charts, we are
seeing a high price and a low price that is inside of the high and low of the day before.
This can be looked at as trader’s unwillingness to push price higher or lower for any
number of reasons and characteristics:
• Perhaps an extremely related report is being issued soon, or perhaps the market
had just made a huge leap and traders are halfhearted about bidding price much
higher or lower.
• Whatever the reason, the motive is the same: and that motive is looking for
potential volatility in an effort to take advantage of profit. Moreover, when we
have a situation in which traders are unwilling to bid price higher or lower, we
have a potential situation we can look at for future increases in volatility.
BY: GIO GAMELO

Support and Resistance Levels

Support and resistance is one of the most basic forms of technical analysis. Most
commonly known as pivotal points . They simply occur because of the nature of supply
and demand. The people, who have full control of these levels, are once again the
major banks. It’s most common that these banks will make most of the profits during
market movements around these certain supply and demand levels.
Just by plotting these key levels correctly will enable you to develop the
understanding of the movement behind some of the more advanced strategies. If the
levels or zones have been respected, i.e. firmly held for 3 to 4 touches, then we can use
these levels as entry points or exit points. Looking at the larger picture of the Forex
market, the historical levels have shown that history does repeat itself.
Support
The support levels are the demand levels that take place on the charts. This can happen
when the market has found low price levels that hold strongly and will not break further
down. You can see the blue area zone of support, which has been respected 2 to 3 times
before actually breaking through with further downside momentum.
Just like the resistance levels, the support levels (if plotted correctly) can offer
confluence upon other tools used on the charts. The higher the timeframe the
stronger they are which means they tend to hold for longer periods.
Both of these support and resistance levels should be plotted with simplicity and
should not be overcomplicated. Too many of these levels on the chart may confuse
you, which would lead to clouding your own judgement in your trading bias.
Resistance
BY: GIO GAMELO

(From the previous chart you can see that the resistance levels or ‘areas’ are the high
points where the market has come down from)
Resistance is a level in which the market has been rejected from and it is keeping the
market from reaching higher levels. As you can see from the chart above, the price
simply is rejected from the green zone, which has created a barrier for this currency
pair. We can also clearly identify the spikes or wicks, shown at this level of price action.
Resistance levels can also be used to add confluence to any other technical analysis.
Resistance is not just some random area or zone by where price turns around. There
are possible sellers, traders who have sold a Forex currency pair once before and
remember the collective power they had to push price lower. There are also buyers who
went long at support and were disappointed that price did not go higher and will close
their buy positions with sell orders at or just before price gets to the resistance ceiling.
Some traders may even take out their long position from much lower in the market
that will also add impact to this resistance level.
Another group that make up resistance are the ones that bought at or near resistance
and are trapped when price fell at resistance. These traders are begging for price to
come up one more time to get them out at breakeven. All of these groups work together
to send prices lower and make up the “supply” in the supply and demand equation.
More supply than demand, price falls, more demand than supply price rises in the
market. Resistance is the Supply.
Using support and resistance within a trend
BY: GIO GAMELO

(In the diagram, above it shows the levels of support and resistance that has been
create during the trending market. This will help clearly define the directional
movements and the opportunity levels that will allow us to take up trading placements.)
Support can become Resistance and Resistance can become Support
In technical analysis, support and resistance is a concept that the movement of the
price of a currency pair will tend to stop and reverse at certain predetermined price
levels. These levels are symbolised by multiple touches of price without a breakthrough
of the level. Support and resistance can be plotted on any timeframe, however on the
higher timeframes the levels are much stronger and less likely to be broken (weekly +
monthly). Support and resistance levels more often than not come in small area ranges
on the chart rather than fixed points. Previous technical charts show that these zones
are respected more than the one point.
Why does support and resistance happen in the Forex Market?
BY: GIO GAMELO

The overall main reason for the behavior of support and resistance is because of supply
and demand and the market psychology. At the support levels, the number of buyers
coming into the market will be far greater than the number of sellers and this will then
push the price back up. On the other hand, at resistance levels the number of sellers
will exceed the amount of buyers, causing the price to drop. This will occur frequently
within a market range between two price points. When support and resistance levels
have been broken out of ranges, then price action will establish new ranges with new
levels of support and resistance.
Support and Resistance Reversals
When support and resistance levels have been broken , then the roles of the support
and resistance levels change. For example, if the price goes further below a certain
support level, then that same level will now become resistance. Conversely, if the price
pushes and a candlestick closes above resistance then that previous level of resistance
will now act as support for the price to continue higher.
Timeframes to look at:
On a clean chart, plot the key areas and levels that are strong in this order:
_ Monthly – Start of by plotting the support and resistance levels on the monthly.
_ Weekly – Once the strongest levels have been established, plot 1 to 3 more defined
areas of strengths on the chart that visually stand out. You may also look for any
trendlines here and plot any Fibonacci (ABCD) formations to determine
a destination for the pair.
_ Daily – On the daily, you need to look for inner and counter trendlines that we
will cover within this guide. Also, look for any obvious Fibonacci sequences that
show targets towards the weekly support and resistance levels/zones.
_ 4aHour – On this timeframe, you should have found the correct overall direction,
and you should now be looking for the entry into the market.
_ 2aHour – If the entry is found correctly with good risk to reward on the 4_Hour
then don’t use the 2_Hour, only use this timeframe to see the clarity within the
setup and the risk to reward. Do not go any lower than this timeframe
because the levels simply become irrelevant to the overall long_term trend.
When looking at the Forex market, you should always look at the monthly, weekly ,
daily and finally the 4 hour for the entry point. By plotting the levels from top to bottom
in this way, we discover that the exit strategy to a trade is far more important than the
entry. By going down the timeframes, we are able to locate a more refined entry point,
with a correct stop loss placement.
BY: GIO GAMELO

Monthly Support and Resistance
The monthly support and resistance levels are the strongest. If you go down, and look
at the 15_minute chart, you will find that the support and resistance levels break all of
time. Whereas on the monthly timeframe, the support and resistance levels will hold
much stronger before breaking. This shows that the bigger picture is more respected
through technical analysis and price action.
Weekly Support and Resistance
By correctly plotting the weekly levels, it's great for gaining more clarity when stepping
down from the monthly but however provide strong setups for the swings trades which
we will place. These levels are great for making targets to aim for, if the market is in a
bullish uptrend and an entry into the market is found, then the weekly levels above will
be great areas to aim for and take some profit at.
BY: GIO GAMELO

Daily Support and Resistance
When dropping down from the weekly, the daily is the next strongest form of levels.
Usually the weekly levels will be visible areas on the daily timeframe and levels just
need adjusting and tweaking in order to line the structure of the chart up correctly.
4 Hour Support and Resistance
The 4_hour support will be the weakest levels within these set of timeframes. However,
they can work well when looking for that overall bias entry into the market. Again, this is
more of a shorter_term timeframe and the levels may not be respected properly. Market
manipulation
BY: GIO GAMELO

can also cloud your trading judgment when entering a position. So make sure that
you fully understand the bigger picture and be wary of this manipulation.
Market Movement
Market movement is the history and patterns of supply and demand, which the market
creates. All of the movements up and down that you will be able to visually see on the
charts. For the average trader or beginner, the charts may confuse them, which can
lead to entering the market without any plan or real knowledge. The market will move in
3 ways:
• Uptrend – When the market is trending higher with Higher Highs and Higher
Lows.
• Downtrend _ When the market is trending lower with Lower Lows and
Lower Highs.
• Sideways – When the market will move within a range bound zone. (Between
two price points.)
It is known that Forex markets move sideways (within a range) 70% of the time, and
will move in a trend (up or down) 30% of the time. So this means that when trends are
formed, that we trade in the direction of that specific trend. Many traders will try to pick
tops and bottoms by entering what think are high and low levels. In reality, we need to
discover where the momentum is, and define what the charts are telling us. To do this
we need to look at the previous market movements on the Monthly, Weekly and Daily
timeframes. Furthermore, the objective here for us is to read the larger (weekly/daily)
trends and then scale in on the setups. By doing this, your technical ability and analysis
will become much stronger.
Sideways Market
BY: GIO GAMELO

Sideways markets are when the market does not trend. It will simply move between 2
points before finding a trend direction. Sideways markets can happen because of low
volatility, indecisive currencies or due to strong support and resistance areas, (like the
one shown above) the market will range. Profit can still be made during these periods.
Yet the positions cannot be held in the same way as a trending market. We may need to
take profits within 24 hours (intra_day) setups.
Trending Market
The most profitable trades can happen during trending markets. As long as you have
correctly defined the trend that is. A trend can be easily spotted by going on the weekly
+ daily timeframe, and looking visually for higher high (HH) and higher lows (HL) or
lower lows (LL) and lower highs (LH).
(As you can see from the previous illustrations, the movements are made in swings. By
trading with the overall trend, plotted from the bigger picture, then you will be making
profit from the next swing in direction.)
BY: GIO GAMELO

Uptrend Example
Here you can see that this market is trending up and we can clearly define the higher
highs and higher lows that are created in order to form the overall trend. The price
reversals in the cyan circle tools are the higher lows that offer us traders the opportunity
to get into the market with a long trade.
Downtrend Example
Here is a downtrend example that shows the pivotal movements that will define that
trending movement. You can visually see the lower swing highs and lower lows that
are forming. Once again, here you are able to see the various opportunities that are
presented that offer short/sell trading positions for us the traders.
BY: GIO GAMELO

Trend Reversal
As you can see here, a trend can reverse and change direction. We can spot this
happening by defining the highs and lows. The example above analysis was plotted on
the daily, but for a stronger trend, you may want to look into the weekly chart. The
reason that we screen printed the daily timeframe here, is because that we needed to
find some more clarity regarding this reversal.
In this image however, there is a firm downtrend in play all the way down the chart before
we achieved a break of the last Lower High swing (LH) as mentioned in the image. At this
break point in the trend, the market has gone from a downtrend to an uptrend. By having
correct information about what trend the market is in, you can make them work for you.
Trendlines
BY: GIO GAMELO

Trendlines (TL) is a very common tool within technical analysis in Forex trading. They
are probably one of the most underused ones as well. If the trendline is drawn out
correctly, they show the trend in clarity and offer great opportunities for us traders to
get into the market. The basic features to a trendline is that an uptrend line is drawn
along the bottom of easily identifiable support areas (up trend in price action). They will
also correctly show the higher lows in the market. In a downtrend, the trend line is
drawn along the top of easily identifiable resistance areas (the tops of the lower highs).
Other notes to consider when using trendlines, is that the more bounces (touches ) a
trendline shows, the stronger it is. This would convey that the line is highly respected by
the price action and will continue to trading off it in the future. You only need 2 Lower
Highs or 2 higher lows in order to place a trendline. But finding a third trendline bounce
can be very strong in the current trend direction.
There are two ways in which a price can react to the trendline. We can achieve a
bounce off the trendline and then a continue in the trend direction. Or we may see a
break of the trendline and then a reversal. We have strategies and methods for breaking
down these two types of market movements which can produce very profitable trades.
We will cover the indicators that support these methods and generally what to look out
for in terms of the entry, stop loss and target levels.
Trendline Bounces
Ascending (uptrend) Descending (downtrend)
As you can see from these diagrams, the market will create these bounces and respect
the support or resistance lines that will make the market trend in a certain way. Here is
an example of an ascending trendline that has made many bounces which has caused
the market to trend upwards. When plotting the simple trendline on the daily + weekly
timeframe, you want to aim for a line of best fit. You want to link up the key levels and
bounces without taking out loads of
BY: GIO GAMELO

price action. If the trendline seems too hard to plot due to messy market candlesticks
then the trendline is invalid. Do not force it.
(The above image an accending trendline on a real chart.)
Knowing how to plot the trendline is one aspect, but knowing where to place the trade is
another piece of knowledge you will need to gain. When a market is trending like in the
previous screenshot, and respecting each bounce of price action. You will need to find
out the shorter counter trendlines that offer an opportunity to buy or sell into the market.
In the next section of this guide and we will show you how to apply counter trendlines to
the overall trend.
Counter Trendlines (CTL)
(The counter trendlines shown above are the bolder lines that fall in opposite alignment
of the overall trend.)
BY: GIO GAMELO

Here are some examples of how counter trendlines will work in alignment with the overall
trend:
Trendline Breaks
There are three aspects to look out for when it comes to looking for a trendline break.
We will need to look for some confirmation to get us into a setup. We can look for the
momentum formed from the previous candlesticks and find a break, retest and
continuation that occurs frequently in the market.
BY: GIO GAMELO

Standard Trendline Breakout Movement
Retest
Point of entry
Break
Continuation
When looking for a trendline break, we need to see a break, retest and continuation
as shown in the diagram above. We have also shown the point of entry which you
should use to confirm the setup. As soon as we achieve a break of the minor support
created from the initial break, and the candle closes below those levels, we can go
short/sell. This technique also works in a bullish scenario if we can see a
descending trendline in play.
Example of a trendline break
BY: GIO GAMELO

Here in this example we can see that break, retest and continuation in more clarity
here. 80% of the time, the market will act in this way around these trendline breaks. The
initial target, which you should aim for in this scenario, is the first point created on the
trendline.
Inner Trendlines
Trendlines will be broken down to shortaterm, intermediate term trend and also long
term
trend. Here is an example of this:
(Screenshot on the weekly chart, plotting the different time scale trendlines.)
As shown in the image above, we have plotted a long term weekly trendline, a smaller
daily trendline and a short term 4 hour trendline (the smallest). At these points where
the market has broken each trendline, it offers great opportunity to scale down and find
a functional entry point.
BY: GIO GAMELO

What is a Ichimoku Cloud?

An Ichimoku cloud is a fantastic tool to define the trend on any timeframe. We are able
to use the cloud as a support/resistance level as well as a confluence at the crossover
points. See the previous image has a purple cloud within the background. Well this is
what the Ichimoku cloud visually looks like on the charts.
How to use Ichimoku?
This ichimoku cloud should be used as confluence only after reviewing the trending
candlesticks. When defining the entry points, the crossover points can work towards your
entry position. If the cloud is visually pointing down, then this will show the level of bearish
momentum in the market. Alternatively, if the cloud is pointing to the upside then this shows
bullish momentum on the chart. The higher the timeframe the more dependable and strong
the cloud becomes. The cloud should be reviewed on the daily/weekly to properly find the
bigger and overall market movement and momentum in play.
Standard settings of 9,26,52
BY: GIO GAMELO

Moving Averages
Moving Averages (MA) are mainly used by traders to identify the trend. By using two
moving averages set at 9 and 31, it enhances confluence to enter a trade knowing that
price is moving and has momentum in the direction in which you are trading in. Again,
moving averages are much stronger on higher timeframes (daily + weekly) but can be
used on the 4ahour chart to help find the entry point into the market.
Here we have displayed a 4ahour entry screenshot of the moving average crossover in
alignment with the cloud crossover. This displays that by adding as much confluence as
you can to the setup, the much strong your entry position will become. It will also increase
the probability of the trade hitting your target level, which you will have in place.
BY: GIO GAMELO

In the above chart screenshot, we can see the moving average crossover that will fall
in alignment with a daily trendline break, retest and continuation. This screenshot
was of the 4a hour chart that defines the entry into the market. By adding this
confluence on the chart, it adds confidence to our circumstance from the
daily/weekly timeframe.
MA Setup
Below are some screenshots of setting up the moving averages by ‘double clicking’ on
them in ‘tradingview.com’ to change their periods.
MA's to use:
• 9 (make blue) and 31 (make red)

• 200 – The 200 MA can be used for bigger picture and long term trades. For
example you may be trading a pair down to a potential weekly trendline bounce.
If the 200 MA lines up with the bounce then this would be a great level to take
profit at, or, potentially enter the market as long as there are other confluences
in play.
Ranges
Finding and plotting ranges is straightforward and is a fantastic way of viewing the
bigger picture. Plotting ranges and duplicating range heights can also be a fantastic
confluence to find new target levels. Ranges should not be plotted on any timeframe
below the daily as the ranges become less strong. The first step of range trading as
already mentioned is to find the range. This can be done through the establishment of
using support and resistance zones. These zones can be created by finding a series of
short term highs and lows and connecting the areas using horizontal lines. To review,
the resistance is the overhead range where we will look
BY: GIO GAMELO

to sell a range, and support is the area where price is held up with traders looking to buy
the market. The best tool to use in this situation is the arrow tool found in the same tool
category as the line tool within Trading View.
How to plot the ranges?
Ranges, as mentioned should be plotted with the arrow tool. If the market has been
stuck in a range, then adding the previous range height to the potential breakout can
add confluence to the overall target of the setup. By adding confluence, I mean that if
this level also lines up correctly with other tools in play then this can be targeted with
confidence (provided that the entry is found on the lower timeframes).
Ranges are mostly overlooked by traders and are not considered the best market to
profit from. In most cases, it is best the find a slow relaxed trending market that is
swinging up or down but however ranges typically show where the market has got
caught up and may move towards any pullback confluence. For example, in the chart
above, we can almost see that the ranges displayed shows that we may get a pullback
to the upside which would line up with a bounce on the overall bigger trendline coming
down. With the majority of traders jumping into the market with buy/long trades, due to
the fear of missing out, the market will then continue within the downtrend overall from
the higher timeframes.
Periods of consolidation
During periods of consolidation, the market will work itself out and find its next move
in direction. These periods can happen after a trending market, and a range can be
created.
BY: GIO GAMELO

These are usually 200 – 800 pips range heights especially of the daily/weekly timeframe.
The diagram above shows basically how the consolidation will play out on the
daily/weekly timeframe. You may find lots of indecision, doji candles and false
signals but still remain within two zones or areas of interest. This range will build up
force like an elastic band and will shoot one way or the other. As soon as we get a
proper breakout and no false breakouts, then plenty of profit can be made in these
situations. We would effectively need to see a break out, retest and continuation (just
like a trendline break) in order to get into a position. The above example shows an
uptrend (HH + HL) until the period of consolidation, then the market has broken to the
downside. Periods of consolidation can also happen within trends.
Here we have included an example of how the market will use the small ranges as
periods of consolidation, but however within trends. All that has happened in this
scenario is that the market has had a breather from the uptrend (maybe getting traders
in to a short position) and then continuing to the upside as the previous HL’s have
been respected and not broken.
BY: GIO GAMELO

Range Breakouts
Ranges can break to the upside or downside but we need to make sure that the setup
is valid in order to place an entry into the market. Below you can see a diagram of this
kind of movement which we will need to look for, this is called a break, retest and
Break of
range Retest of the broken range
continuation
continuation.
Example:
Fibonacci
The Fibonacci retracement (fib) tool is based on the Fibonacci Sequence and is
considered a technical tool providing feedback on possible future exchange rate
levels. There are some
BY: GIO GAMELO

Fibonacci
The Fibonacci retracement (fib) tool is based on the Fibonacci Sequence and is
considered a technical tool providing feedback on possible future exchange rate
levels. There are some
traders who swear by the accuracy by which Fibonacci retracements can predict future
rates, while others argue that Fibonacci numbers are more art, than science.
Given their popularity and widespread usage by technical analysts, you should at least
of all know how to interpret Fibonacci numbers . Fibs will add confluence to trends,
pull back and over next move from periods of consolidation or indecision. The great
significance of this tool is that it offers a target destination for the next potential chart
movement. The formation here is (ABCD) for the different points in the sequence.
Fibonacci Example Diagram:
What is this Fibonacci sequence?
Let’s start off by looking at purely the Fibonacci sequence and then break that down,
we can then see how it will relate to the Forex charts.
Fibonacci is a simple sequence of numbers that show the ‘pullbacks’ within a trending
market as already covered. These numbers are significant due the the fact that they
work over and over again which suggests that the banks will be moving the markets in a
way that is respected by this tool.
BY: GIO GAMELO

When plotting this tool, you will first need to define the trend and which way the market is
likely to move. If the market is coming down, then you will need to first click the fib tool at
the ‘significant high’ that stands out to you. You will then need to drag the tool down and
click at the ‘significant low’ and this will give you the A + B part of the formation.
If the market is going up, then you will have to first click at the bottom of the ‘significant
low’
and then drag the tool and click once again at the level of the ‘significant high.’
The best level to look for solid pullbacks to is the 61.8% C point retracement. In the
example above you can see that this market has respected that C (61.8%)
retracement. The market may only retrace to the 38.2%, 50% or the 61.8%. In
general, the market will always come back to that 61.8, but it depends on the
momentum and pressure of the trend in play.
Finally, the next level to aim for is that D extension target. Your first D extension target
will be
_27% level and the second target will be the a61.8% level. Once you have defined this
setup, it's important to see if any former levels of support and resistance lines up
correctly with this D extension level. Always, like other tools, try and line up the fib to
add confluence to your trend bias . This tool will work very well for you if you keep the
charts simple and work off the bigger picture. Use this tool on all timeframes above
the 4ahour chart.
BY: GIO GAMELO

Head and Shoulders Strategy
Two of the underlying molds behind the validity of using charts and chart patterns are
that prices can operate in trends and that history will inevitably repeat itself. Therefore,
there is value in viewing the price movements of past currency pairs to forecast what
the currency pair will do in the future. This is abstractly similar to weather forecasting.
The head and shoulders pattern is one of the more popular and reliable chart patterns
and from the name, the pattern somewhat looks like a head with two shoulders.
The standard head and shoulders top pattern is a signal that a currency pair is set to fall
once the pattern is complete, and is usually formed at the peak of an upward trend. A
second version called the head and shoulders bottom (or inverse head and shoulders),
signals that a security’s price is set to rise and usually forms during a downward trend.
In either case, the head and shoulders indicates an upcoming reversal, so this means
that a currency pair is likely to move against the previous trend.
Neckline
Both of the head and shoulders have a similar construction in that there are four main
parts to the head_and_shoulder chart pattern: two shoulders, a head and a neckline.
The patterns are established when the neckline is broken, after the formation of the
second shoulder. The head and shoulders are sets of peaks and channels. The
neckline is a level of support or resistance. An upward trend, for example, is seen as a
period of successive rising peaks and rising channels. A downward trend, on the other
hand, is a period of falling peaks and troughs. The head_and_ shoulders pattern
illustrates a weakening in a trend where there is deterioration in the peaks and troughs.
BY: GIO GAMELO

Head and Shoulders (Head and Shoulders Top)
This pattern has four main configurations for it to complete itself and confirm the setup:
• The formation of the left shoulder is formed when the pair reaches a new
high and retraces to a new low.
• The formation of the head occurs when the security reaches a higher high,
then falls back near the low formed in the left shoulder.
• The formation of the right shoulder formed with a high that is lower than the high
formed in the head but is again followed by a fall back to the low of the left
shoulder.
• The price falls below the neckline. In order words, the price falls below the
support line formed at the level of the lows reached at each of the three
lows mentioned previously.
HH
HL
HL
LL
Minor Support + Neckline
When the price breaks and the candle closes above the neckline then this is when to
enter a long/buy trade. Ideally you would need to see more confluences for an entry
such as moving average crossover to the upside, descending trendline break or any
other indications that show potential bullish momentum is about to occur.
Inverse Head and Shoulders (Head and Shoulders Bottom)
The inverse head and shoulders pattern (bottom) is the exact opposite of the head and
shoulders top, because it indicates that the currency is set to make a move upwards.
Again the inverse head and shoulder pattern has 4 main structures similar to the
head and shoulders top. Here are the movements to look out for:
BY: GIO GAMELO

• Formation of the left shoulder occurs when the price initially falls to a new low
and then subsequently rallies to a high.
• The formation of the head occurs when the price moves to a low that is below the
previously mentioned shoulder's low, followed by a return to the previous high.
This move back to the previous high creates the neckline for this chart pattern.
• The formation of the right shoulder. This is typically a sell_off that is less severe
than the one from the previous head. This is followed by a return to the neckline.
Resulting in creating a higher low effectively.
• The currency pair breaks above of the neckline. The pattern is complete when
the price moves above the neckline created by the previous heads and
shoulders. The price will then continue upwards.
Minor Resistance + Neckline
LH
LL
LL
In this scenario, we will also look for a break and candlestick close above that minor
resistance and neckline. Below is a real example of a Head and Shoulders Bottom.
BY: GIO GAMELO

Using Head and Shoulders in alignment with a Trendline (TL)
Left tip (LH) C

Retracement
Aim for D extension target
Market Manipulation on the charts
The following image is an example of the kind of liquidity traders have to deal with and also
the pitfalls that cost traders at home many, many losses:
As you can see above, the average Forex chart moves up and down at a very fast
pace. The rectangles show the amount of movement in very short spaces of time.
Many, many people will be buying and selling with no reason or knowledge as to why
they are doing so. Some may even try to "buy low" and "sell high" which will lead to
over trading and making poor changes to their account size. "The market does not
control your trading account, you do!" This is very
BY: GIO GAMELO

important to keep in mind when you start entering your own trades. As you read
through this book, you will develop further an understanding as to why it's important to
look at the bigger picture and why it's dangerous to try to pick these highs and lows
without any theory behind the setups.
How do we overcome the market manipulation?
Now that you know about market manipulation, and you know what it looks like, this is
when we (the top 5% of traders) can step back and look at the bigger picture
technically. We can define the trend direction and grasp an understanding as to why all
of these moves are playing out, then trade against the majority of losing traders.
Creating Targets
The exit point is crucial to know in order to succeed within your technical analysis.
Knowing where you are going to get out of the trade is so much more valuable than the
entry. Think of it like this, if you get on a bus, you know where you will be getting off.
Entering the market based off only an entry point is like getting on that bus with no
destination. Make sure that you are always entering the market based upon where you
see the destination of the market going. When creating targets in the Forex market,
you will need to have at least 3 confluences for a target. By confluence I mean a key
level of importance on the chart. This might be a daily support level or a trend line
touch or a Fibonacci level (this will be discussed later on). If the tools are applied to the
charts correctly, then you will be able to see all of the confluences line up to a certain
key level. In this case you would target that level you see the market heading to. Place
the trade and patiently await you target to be achieved. Also when placing trades, you
can create 2 targets, and take of 70% of your position at target 1, leaving the remaining
30% of your position to run. By doing this you will be preserving your capital and also
removing risk of loss. It will give you the ability to bank your rewarding profits and take
advantage of potentially more profit to be extracted.
BY: GIO GAMELO

Example of breaking down the chart
The following set of charts are in the sequences which you should go through in order
to break down the chart effectively. This is called a top down analysis due to the fact
that we are starting from the top timeframe and working our way down whilst keeping
the overall bigger picture trend in mind. By stepping through the timeframes in this
way, we will be able to spot the more defined entry points, which will lead to us using a
smaller amount of pips stop loss. If you can see much happening on the timeframe
that you are on, then simply drop down and find more clarity.
Monthly:
Here I have started on the monthly timeframe and have plotted 2 to 3 strong support
and resistance levels that show strong reversal.
BY: GIO GAMELO

Weekly:
Here I have dropped down to the weekly, and I have looked for a trendline that will fall in
place with the trend formation that I can see. In this case it has been a downtrend with
many bearish down swings.
BY: GIO GAMELO

Daily:
Here I have dropped down to the daily, and have found a Fibonacci retracement in
alignment with the overall downtrend that I can use as a confluence o go short.
4 Hour:
Here I have dropped down to the 4 hour, and all I am looking for here is the entry I
confirmation to go short/ sell from the overall market trend that have found off the
monthly, weekly and daily timeframes.
BY: GIO GAMELO

Stop Loss Placements
Stop losses are simply a level that you set on the trade that will cut you out of the
market at a small loss. This prevents the market turning against your trade and losing
more capital than you anticipated. Some traders may not even be using a stop loss on
their trades and when starting out, we weren’t using one. The extremely risky affects
that this could cause is losing all of your invested capital which can really have a
negative impact on your emotions.
In the case of a long/buy trade entered with the intention of profiting from a
rising/bullish market, an initial stop loss would be placed and situated at a price level
below the entry price which you got in at. For a short/sell trade, where traders attempt
to profit from falling/bearish prices, an initial stop loss would be placed at a level
above the entry price you entering at. In either case, the purpose of the stop loss is to
close out a losing trade at a predetermined level to avoid more significant or even
catastrophic losses of losing everything which in our experience, has happened.
Use the diagram below to see the structure of the stop loss and where it was
placed in this buy/long trade:
Target
Entry
Stop Loss
Your stop loss technique and approach will develop through your trading journey as
you gain an understanding of how the market moves on a day to day basis. A stop loss
simply is an order to close out a losing position at a preaplanned level, which you will
do to limit your loss on any given trade. Many will fail to understand how to actually
place their stop loss with little risk, yet leaving enough room for profitability. There
are a variety of techniques that us traders can engage to work out the stop loss levels,
including setting a specific percentage risk value on our account size and looking at the
previous data on the charts.
BY: GIO GAMELO

Now you know that the stop loss is a simple limit on how much risk we are applying to
the trading setup, it’s now time to find out where exactly to place it. This tactic can work
with both long and short trades.
Placements on the
charts Uptrend:
Target
Entry
Stop Loss
In this diagram, it shows the trade levels of where to place each part of the trade. When
the market is trending up, you must place your stop loss below the last Higher Low as
displayed here, because if market was to fall beyond the last HL then this would in fact
invalidate this trend and it would then change into a downtrend.
Downtrend Stop Loss placement:
BY: GIO GAMELO

Downtrend Stop Loss placement:
Stop Loss
Entry
Target
In a downtrend it consists of the same concept, yet rather than placing your stop loss
below the last HL, we are now going to place our stop loss above the previous Lower
High. If the market will continue correctly in a downtrend and respect the rules of a
downtrend, then the market won’t come up to your stop loss. It will end up falling all the
way down to your target that you should have many confluences pointing towards.
Losing trades
Target
Entry
Stop Loss
As already mentioned many times through this guide, you should expect losses to
happen throughout your trading performance. In this example it shows how market
would break the current trend and take out your trading stop loss. If your stop loss is
actually set correctly then when it does get hit, you know that the trend will reverse and
your bias for that trading pair will
change
BY: GIO GAMELO

Useful features for your stop loss placements:
• Place above the last swing high within a downtrend

• Place below the last swing low within a downtrend
• Lock in profit/cover your entry when the trade gets into 40 to 60 pips profit.
• Always lock in large portions of your profit when you are almost reaching target
levels
Investors may use stop losses to protect against adverse price moves because it
would be impractical to watch a long_term position on a minute_ to_minute basis. Active
and short_term traders, however, are not off the hook for setting stop losses.
Even if a trader is glued to his or her monitor for every second of a trading session,
markets often move faster than orders can be entered. Because of this, prices could
move quickly to and beyond an acceptable loss limit. Placing an order for a stop loss
can prevent such runaway losses from occurring. However, where that order is placed
relative to the current market price is not always an easy decision. Moreover, there is no
assurance that you will be executed at your price, particularly in volatile markets.
Therefore, it is important to take this knowledge on board and learn to step back from
this. Always review what is happening more long term and you will gradually find that
your trading results will change and get better.
Confluences for targets
We have already shown you how to use the charting tools to develop targets to trade
towards. We like to stick to the rule of three confluences for a single target. This means
that if you have two targets, then overall you should have found six confluences for the
trading plan. However, the more confluences that you find and develop, the more
confidence you will have in the levels that show the correct charting structure.
Exit rather than entry
Every new trader coming into the market without any decent education, will be entering
the market based off the entry point. By this we mean that they won’t have any
knowledge about where the market might be heading to (actual target level). But
rather they will be entering the market as to where they see the instant market
movement direction moving to. i.e. whether the market will move up or down right after
they place their entry position.
It's extremely important to only keep in mind the destination as to where you think that
the market will be heading to overall. If you can see a Fib D extension target lining up
with a resistance level and a trendline bounce, then this is the level which you should
aim for, and from this example you should see how the target is so much more
significant than the entry level into the market. Your entry should be refined and taken
into consideration on the lower
BY: GIO GAMELO

timeframes, yet the take profit is much more important to get right. Also not forgetting
your stop loss level should be correctly placed below the last higher low or above the
previous lower high swing. By getting your setups professionally organised, and
maintaining a good position profile , you will gain fantastic returns on your
investment from the Forex market and you will develop your next source of income.
We will now move on to the trading psychology section to show you how your
emotions are important to keep under control.
BY: GIO GAMELO

TRADING PSYCHOLOGY
BY: GIO GAMELO

An introduction into Trading Psychology
Take your time with each trade setup and document everything. There is no need to
rush any aspect of trading. Each entry should be prepared and executed with a plan.
Preparing yourself to trade Forex for consistent profits:
Here is a great example of keeping a log/journal of your trading performance. By

preparing the trade, executing the trade and then writing about it, you will grasp a lot of
knowledge about important levels and the behavior of that specific currency pair:
Losing trades
In this Forex journey, you will take losses, it's part of the process. Your losses should be
small, and you should think of them as paying your rent into this industry. Don’t fall for
anyone who claims to be making 100% of their trades consistency, because it doesn’t
happen like that. Even if your technical ability was that good and you were pulling in
80% of your trades as winners, you still need to take them 20% losing trades. But
because of your Risk:Reward ratio and the small amount of risk, combined with the
technical analysis, you stand a great chance of success.
BY: GIO GAMELO

What is the correct trading style?
In Forex there is no one way that will make you

instantly profitable. You need to adapt to market
conditions, and take profit as and when needed,
whether that is daily profits or after holding trades
for weeks. It all depends on the certain trade. Many
traders will fall into the pitfall of choosing to be a
"day trader" or a "swing trader". However, in actual
fact, the all_round trader ready to tackle any
situation is the most profitable. There isn’t just one
style of trading!
Trade on the go
From opening your first trading account, the aim is to gain more freedom. Trading
nowadays, can be done on your portable laptop and even phone, as long as you have
an internet connection. As a mobile Forex trader you can go anywhere in the world
and place a trade from your device.
Staying organised and disciplined
Remember, trading is a form of banking. You need to make pips and keep them pips.
By staying organised, you will be more likely to be in a better state of mind when it
comes to remembering and defining the important key areas of importance within your
limited number of currency pairs.
Mood and Emotions

The most common negative emotions that cause a new trader to fail is greed and fear.
As a trader, it is important to have a plan, which focuses on exit position levels, trade
size, and risk to reward ratios so that you are acting in a mechanical manner. However,
you should also be willing to exit your trade or accept the fact that moving forces in the
markets can change quickly so you can avoid holding onto a loss. This can be done as
mentioned previously, by locking in profit with the stop loss. However, if the daily trend
has clearly changed in momentum and previous levels have been taken out that you
haven’t anticipated then it’s important to not hold onto these setups. Revise your trade
and reassess the bigger picture movements and trends.
The opportunities to place a trade within the Forex market are infinite. Any trader
around the world can trade on any time frame using nearly any strategy. In the end
though, the market will either rise or fall and regardless of your strategy for identifying
an entry, you need to know
BY: GIO GAMELO

when to eject from the trade idea so that you’re not holding a long position in a bear
move or a short position in a bullish trend.
The truth that can be taken from that statement is that traders who have stood the test
of time have found a way to conservatively grow their capital without absorbing career
ending drawdowns and we hope you learn to do the same.
So to conclude, you should always have the same emotion regardless if you win a trade
or lose. Stay humble every time you make a profit on a trade and keep yourself in the
game when you take a loss. It's all about the long run and how much return you can
make each month. Anyone can win a trade, but only 5% of traders can actually make a
fortune from this market. So you always have time to stay relaxed and make
expediential growth over time to build up your fund. By taking small withdrawals
from your account and seeing the actual profits in cash will be a very rewarding
process and it will push you to become a better trader.
Invest in yourself and your future

From our past experience with my batchmates/friends who entered forex together in
singapore, we hear many people say that they think that trading is ‘too hard’ or you
have to be great at mathematics. But the reality is that the traders who invest a small
portion of their time into the market, can be rewarded highly for simple and effective
work. Also in today’s economy with the average interest growth rate, from a bank
account being 3% per year, the Forex market is a great investment for the person
looking to make another source of monthly income that can beat the banks interest 50
times over.
Investment Costs
So let’s have a look at the actual investment costs to become a trader.
• Laptop
• Internet Connection
• Education
• Initial investment deposit
That is all. Trading is a professional business, yet you don’t have to invest in opening up
a shop or restaurant. All of your funds that you want to make growth on can be placed
into a trading account to make returns on.
Stick to your own analysis

Tatagalugin ko na, mas masarap sa pakiramdam na kumikita ka sa sarili mong analysis
kesa sa nag hihintay sa analysis ng iba o signals. The Forex market is an expanding
tradable investment source, and many are joining the game with no experience. This
then will lead to them scanning all of the internet including social
BY: GIO GAMELO

media in order to find someone that will provide them will 100% consistent win rate
system that just simply isn’t possible. Some may get caught up with the wrong
information that will not offer the results they will be looking for. It’s important to gain
your own knowledge within the market and stick to your own bias and trades. As soon
as you enter a trade, someone else in the world will be entering in the opposite direction
to you. So always, stay independent and treat each trade like a business investment
that will offer professional and consistent returns.
So how can I be the perfect trader?

There simply is no one_way to trade, walang ganun. It's all about adapting to the market
conditions and reading what the candles are telling you. Nothing is as reliable as pure
constant price action, if you stick to your plan and advice presented within this
guidebook, then you will gradually see your results change. You may find that your
current results are going sideways and you aren’t able to withdraw any real profit from
the market. Just step back for a moment, review the bigger picture and see what is
going wrong through your journal. A good trader will be able to gain 10% to 25% in a
month on a reliable basis. So if you reach your target, remember to collect your
rewards. Ultimately, this is what the Forex market is about. You are trading towards
your goals and visions. The passion for trading should be to stay organised and always
on top within your own mind. Never let your emotions get to you, and when you take a
loss, don’t let it drop your performance.
BY: GIO GAMELO

Vision Board
A vision board is one of the most valuable trading assets that should always remain
focused within your thoughts. You wouldn't dive into a swimming pool if you couldn’t see
the other side! My vision board creates a visualization of the other side in Forex. Within
your vision board, please stack all of the material things that you want to extract from
the currency market. This may include cars; houses; places to visit; foods; luxury items;
etc or lifestyle goals, which you may have in mind.
Your vision board can be a folder on your computer full of screenshots or it can be a
collage of photos, quotes and aspirations that you put up on your wall. By visually
seeing the lifestyle that you are striving for, every day when you wake up, your mind will
be constantly thinking about those visions. When you are always thinking about the
goals that you want to achieve from the Forex market your efforts will naturally plant you
on the path to obtaining everything you wish for!
TRADING IS SIMPLE BUT NOT ALWAYS EASY.

REMEMBER, IF IT WAS EASY, EVERYONE WOULD
BE TRADING!
BY: GIO GAMELO

This module has been written and produced by GIO Z. GAMELO

ALL IMAGES AND ARTWORK HAVE BEEN PRODUCED BY MYSELF, AND HAVE
BEEN CREATED VIA
‘TRADINGVIEW.COM’ OR ‘METATRADER’. This guide has covered technical analysis,
risk management and psychology. I have used the knowledge gained from our past 4
years of experience within the market and the barriers we have overcome. By following
the guide and any other guidance provided by myself, you will cut out many years of
losses. Trading is however a long term learning curve and making great returns will not
happen overnight. It can take months to really figure out how to invest your funds
correctly and within the right areas. We hope that you have gained constructive
direction about trading on the Forex market. Please also refer to the risk guide below.
Risk Warning
Trading on the Forex market involves sustainable risks, including complete possible loss of
funds and other losses and is not suitable for all traders. The high degree of leverage can
work against you as well as for you. Before deciding to participate in the Forex market, you
should carefully consider your investment objectives, level of experience and risk appetite.
Most importantly, do not invest money that you can’t afford to lose. You should be aware of
all the risks associated with foreign exchange trading, and seek advice from an independent
financial advisor if you have any doubts. We hope that you have enjoyed reading through
this guidebook and have a greater understanding about how to be profitable within Forex.
Any questions can be sent to gio12611@gmail.com
GAMBLER’S ASK FOR TIPS, TRADER’S ASK FOR EDUCATION.
BY: GIO GAMELO

BY: GIO GAMELO

Fta Modules

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Fta Modules

Uploaded by

Copyright:

Available Formats

FORGE TRADING ACADEMY

BY: GIO GAMELO

Thank you for investing in this

This module is written by

BY: GIO GAMELO

BY: GIO GAMELO

Forex Trading Guidebook

BY: GIO GAMELO

About this Guidebook

Subjects covered in this Guidebook

BY: GIO GAMELO

BY: GIO GAMELO

Why does the Forex market exist?

BY: GIO GAMELO

What sits behind the markets and how does

In contrast to the majority of financial markets, the OTC (Over_The_Counter) currency

BY: GIO GAMELO

Rank Major Bank Share volume size

BY: GIO GAMELO

Banks manipulative aspects to consider

These may include:

BY: GIO GAMELO

BY: GIO GAMELO

When is the Forex market open?

BY: GIO GAMELO

The best trading hours

BY: GIO GAMELO

BY: GIO GAMELO

BY: GIO GAMELO

An Introduction into Risk Management

Cutting your losses short

The importance of risk management

Risk management is one of the key concepts to surviving as a professional Forex

BY: GIO GAMELO

Disciplined approach to correct risk

BY: GIO GAMELO

How do I know the amount of risk to apply to a trade?

The dangers of over risking capital

BY: GIO GAMELO

How to work out your correct lot size:

The LOT size calculation:

1. Total Account size divided by 100

BY: GIO GAMELO

Let’s say I have £10,291.23 in my trading account; I want to short the

£10,291.23 divided by 100 = 102.91

£102.91 times by 2 = 205.82

205.82 divided by 80 = 2.57

Move the decimal place left once =

0.25 LOT SIZE TO USE = 0.25

BY: GIO GAMELO

In general terms Risk:Reward is risking a small percentage of your capital in order to

BY: GIO GAMELO

Trades Placed Loss Wins

Totals 10% +30%

BY: GIO GAMELO

1. Only risk a small fraction of your account. (MAXIMUM 3%)

Only risking a small fraction of your account

BY: GIO GAMELO

Locking in profit with the stop loss

Not trading can also be a form of risk management

BY: GIO GAMELO

Non Farm Payrolls

BY: GIO GAMELO