Session #1 Building a Trading Plan

Transcription

1 Session #1 Building a Trading Plan

2 Legal Disclosure Trading Currencies may involve high risk and, potentially, the loss of any funds invested. Investment information provided may not be appropriate for all investors and is provided without respect to each individual investor s personal financial situation, investing time horizon, risk tolerance or financial sophistication. Trading decisions are up to you, so Maverick Management LLC, Maverick FX Trading and Maverick Trading makes no guarantee or representation as to the outcome of your decisions. Neither Maverick Management LLC, Maverick FX Trading and Maverick Trading, nor any of its respective officers, personnel, representatives, agents or independent contractors are registered investment advisors, registered broker-dealers or licensed financial advisors. We have created this workshop course as part of an investor education program. Nothing contained in this communication (written, verbal and non-verbal) or other materials constitutes a solicitation, endorsement, promotion, persuasion, recommendation, suggestion or offer by Maverick Management LLC, Maverick FX Trading and Maverick Trading or others described above of any particular investment, security or transaction. Maverick Management LLC, Maverick FX Trading and Maverick Trading does not provide investment or financial advice or make investment recommendations. Maverick Management LLC, Maverick FX Trading and Maverick Trading are not in the business of transacting trades.

3 Welcome to Maverick FX Robb Reinhold Instructor, Trader Ankit Sharma Instructor, Trader, Risk Management Joe Jensen Instructor, Technical Analyst, Trader Greg Theonnes Instructor, Trader Chad Rolland Website Content, Trader Diana Perkins Trader Support Use your team to help you reach your goals

4 Goals of this Session Understand why your results as an amateur didn t meet expectations Prepare each trader for a career as a trader Setting goals and realistic returns - Understand you as a trader Learn FX Market Basics Develop Personal Trading Plan In Short, this course builds a Proper Foundation from which to launch and begin Trading as a Pro

5 Course Outline Session #1 Your Trading Plan Introduction to trading Goals and expectations Building your trading plan Session #2 Understanding the FX Markets FX Basics Currency Pairs Margin, PIPs and PIP Values Session #3 Relative Strength & Weakness Currency Crosses Relative Strength Calculator Session #4 Practice, Practice, Practice Trading Demo Analyzing Results Trade Journaling

6 Why Trade FX? The Foreign Exchange market can also be referred to as the Forex, FX, Spot, Cash, or Interbank market. Largest market in the world. Over $4 Trillion in transactions take place DAILY. FX market alone is approximately 3 times the total amount of the U.S. Equity, Futures, Commodities, and Treasury markets combined. FX market has no physical location Operates through an electronic network of banks, corporations, institutional investors, and individuals trading one currency for another this is referred to as Interbank market. The FX market plays a key role in transferring financial payments across borders

7 24-Hour Access- Forex is a true 24 hour, 5 days a week, market. Opening in Australia on What is the FX Market? Enormous Liquidity It can absorb trading volumes and per-trade sizes that overwhelm any other market. Trending Markets- currency markets are volatile and they generally repeat themselves in cycles, creating nice trends.

8 Forex Market Hours

9 Low Transaction Costs- the amount of cost to execute trades has dropped considerably in recent years. There are no exchange fees and clearing fees since it is an Over-The-Counter market what you see is what you get. High Leverage- the FX market allows traders the highest leverage/buying power than other financial markets. FX traders can get leverage in access to 100 times their capital. This gives investors exceptional way to earn high returns on one s capital investment. Low Account Minimums- today, individuals can get started with a minimal account for as little as $500. Above Average Profit Potential- there is no question that speculative Forex trading offers huge profit potential.

10 Major Currencies of the World Currency Name ISO abbreviation Nickname Euro dollar EUR euro Great British Pound GBP cable, sterling US dollar USD green back Swiss franc CHF swissy Japanese yen JPY --- Canadian dollar CAD loonie, caddie New Zealand dollar NZD kiwi Australian dollar AUD aussie

11 Introduction to pairs trading Pairs Trading is a strategy that consists of buying one stock in a given industry, and selling short another stock, usually in the same industry. The undervalued stock is bought while the over valued stock is sold short. Pairs trading is often described as a market neutral strategy.

12 Introduction to pairs trading Ford Long Position 42% GM Short Position - +60% Net Gain +18%

13 Reaching the FX Market FCMs or brokers act as a bridge between you and their liquidity partner (sometimes larger global banks) that you would otherwise not have sufficient capital to do business with. The large majority of off-exchange retail foreign currency brokers act as market makers, meaning that by keeping many trades in house they create their own liquidity. Some retail brokers clear trades directly through to the larger banks that provide their liquidity.

14 Interactive Brokers

15 Interactive Brokers Rated #1 by Barrons Tightest Forex Spreads Multiple Trading Platforms TraderWorkStation Mosaic Trading Platform Mobile Trading

16 Other Brokers Most popular software is MetaTrader Typically is not the FCM White label software that attaches to FCM FXCM is the largest retail FX Broker Most FX brokers are not covered by government SIPC insurance

17 Professionals vs. Amateurs Professionals Defined Plan (Business Plan) with goals: weekly, monthly, yearly Make money in any market Managed Risk: Always use stops/hedges Keep a Trading Journal in order to continually improve Specific time-tested strategies Only take cues from other pros Top tier tools (costs of doing business) Highly educated Amateurs No specific goals, strategies, or tactics Trade by seat of their pants (enter trades without any thought of the downside risk or upside reward) Make money only in bull market Focus on cost, not value Take trading advice from anyone with an opinion

18 Trading Business A failure to plan, is a plan to fail Have you ever met anyone with a successful business that didn t have a clear plan??? You probably won t meet many successful traders that haven t developed a solid game plan. In the trading business you need a structured approach, and a well thought out plan.

19 What s In a Trading Plan?

20 Goals What are your primary goals? PIP s per month Quarterly Returns/Yearly Returns What are your strengths and weaknesses? Build a plan that brings out your strengths and controls your weaknesses Challenges or limitations? When do you want to complete your goals? Finish Qualification Program Start Demo Trading Begin Live Trading How much time are you willing to dedicate? Set aside time for study, building your trading plan and demo trading Sunday FX Room and Mid-Week FX Room

21 Education Knowledge is power. What you don t know can hurt you. Solid foundation Sequence of study Available classes and content Expanding the tactics and techniques in your playbook. Learning other tradable instruments like options, futures, etc Expanding risk management tools and skills

22 Risk Management Trading is not gambling. The first rule of trading is to protect your capital! How much capital will you allocate to any one position? How much capital are you willing to put at risk on a single trade? How much exposure to risk are you comfortable with? Before you put your chips on the table, first consider the risk. Some people unfortunately equate trading to gambling. Educated traders understand risk, and develop skills and strategies to manage it.

23 Strategic Playbook Customize your playbook to match your personality and financial goals Clearly Define buy and sell points based on technical indicators Clearly Define your position management strategies. Cut losers and hold winners Know what to do (when you see a great play, how you can execute it through your online brokerage) Know when to do it (it s OK to sit on the sidelines when nothing jumps out at you)

24 Analysis Keeping a trading journal is an important part of your trading business. Journaling your trades will help you develop good habits. Help you learn from mistakes, and help you improve upon and repeat the behavior that leads to profitable trades. How will you keep track of your trading business? Trading journal General book keeping. Grading yourself. What should be in your trading journal? Completed trades from entry to exit Win/Loss ratio (batting average) Profit/Loss ratio (size of income trades vs. expense trades)

25 Conclusion/Next Steps Browse and Watch Advanced Concept Videos Pairs Trading (28 Min) FX Time chart (40 Min) Trading Personality Test (85 Min)

26 Conclusion/Next Steps Browse and Watch Advanced Concept Videos Pairs Trading (28 Min) FX Time chart (40 Min) Trading Personality Test (85 Min) Continue with Forex 101 and complete the tests Begin the process of building your trading plan Download Trading Plan Outline and Sample Trading Plans Handouts section of Forex 101 #1

27 Conclusion/Next Steps Browse and Watch Advanced Concept Videos Pairs Trading (28 Min) FX Time chart (40 Min) Trading Personality Test (85 Min) Continue with Forex 101 and complete the tests Begin the process of building your trading plan Download Trading Plan Outline and Sample Trading Plans Handouts section of Forex 101 #1 Begin to be part of the community Attend live sessions when available FX Room (Sunday night 10 PM EST), Mid-Week Update (Wednesday 1 PM EST), Live Trading Sessions (on Calendar) Become active in the forum Use the information and tools in the member s area

28 THANKS FOR WATCHING SEE YOU SOON!