Trading Guide for Spot Gold and Commodity Currencies

By: Noor Shufaad Md Norani http://www.melakafx.com

Basic trading knowledge check

Base and quote Buy one currency, sell the other one Market condition Leverage and lot size

Course Outline
1) 2) 3) 4) 5) 6) 7) 8) 9) Know Yourself, Know Your Purpose Trading Goals Introduction to Broker Fundamental Analysis Technical Analysis Risk and Money Management Trade Strategies, Setups and Entries After the Market Close Discipline

PART 1: KNOW YOURSELF, KNOW YOUR PURPOSE

Trading is a business
What do you need for your business?
1. 2. 3. 4. Plan Capital Mentor Other resources

As a whole, its a process.

Trading Objectives
3 Core Questions:
Why do you want to trade? How will you do that? What will you learn?

What type of trader are you?

Scalper Intraday Swinger
Position trader Trend trader Carry trader

Your hours vs Trading hours

Overlapped sessions: 1. London and New York: between 9.00 pm 12.00 am 2. Sydney and Tokyo: between 8.00 am 2.00 pm

PART 2: TRADING GOALS

Breaking down your goals

The rule of 6%. Consistency is the key. What happens when I reach my goal?

PART 3: INTRODUCTION TO BROKER

Topics include:
Understanding the technical setup Registering an account Funding your account Withdrawing process

PART 4: FUNDAMENTAL ANALYSIS

Fundamental Analysis
Every sound traders should understand that market movers make their trading decisions based on the economic scenario. Fundamental = MACROECONOMY Economic Data vs Announcement

Forexfactory.com
The 3 most important news are:
NFP and Unemployment rate ADP Employment ISM Manufacturing and Non-Manufacturing PMI

Others include:
Existing Home Sales and New Home Sales Core Retail Sales Core CPI

Fed vs The Whole World

What is Fed? Who control Fed? Why is FOMC so important?

Investing.com
USD Index Oil Dow

Kitco.com
PM roundup Wyckoff Market rating system Technically Speaking Forex, Gold and Silver

PART 5: TECHNICAL ANALYSIS

Technical Analysis
The essence of TA are :
1. Support and Resistance 2. Trend lines

 Understanding the Price Movement

The basic idea behind Support and Resistance `

= Siling

Overshoot Undershoot

Trading range
Undershoot
= Lantai

Overshoot

Support and Resistance a.k.a soft target areas

Price Strategies
Strategies to understand price movements:
Price Action (Historical price, psycho level and round number) Fibonacci Retracement

Understanding the psychology behind a gap

The importance of time, trend and trendline

Short Term

Less than

3 weeks

Medium Term

Long Term

3 weeks to 3 months More than 3 months

To be safe, always trade accordingly to trend.

PART 6: RISK AND MONEY MANAGEMENT

Risk Management
Risk means how much you are prepared to lose on a trade Some called it Capital Exposure Risk = Stop Loss 1% - 5% strategy

Money Management
Money management refers to how much can you profit in a trade. It is also known as take profit or exit. One of the most wonderful tool for Money Management is by using Reward to Risk ratio.
Reward : Take profit : Risk Stop Loss

Reward:Risk ratio
Suggested ratios are at 1:1, 2:1 and 3:1. Example; risk stands at 30pip.
If we use 1:1 ratio, reward is also 30pip. If we use 2:1 ratio, reward is at 60pip. If we use 3:1 ratio, reward is at 90pip.

The bigger the reward, the better our profits per trade will be.

 To find the best ratio, you need to refer to other setups such as
Support and resistance level Candlestick pattern Fibonacci retracement

PART 7: TRADE STRATEGIES, SETUPS AND ENTRIES

Entry, Stop Loss and Exit

Entry: Candlestick pattern Stop Loss: Candlestick pattern, Support/Resistance Exit: Support/Resistance + Reward:Risk ratio,

Introducing, My Strategies
1. Candlestick trading 2. Divergence trading

Additional rules apply such as trend, lot size, fundamentals, etc

Trading the Candlestick Way

 My main entry strategy 3 things to watch

Size Location Color

Reversal (bullish and bearish) pattern is the most watched and studied pattern.

Candlestick Anatomy

Strong Buy/Sell Candle

The Hints
Long White (Black) Candle
1. At a low (high) price level is the first sign of a market bottom (top). 2. Bounces off a support (resistance) area such as trendline, moving average or retracement confirms support (resistance). 3. Breaks resistance (support). 4. Should find support (resistance) at either the middle of the body or the lower (upper) shadow.

Other Single day Candle

Doji Spinning top

Small white candle

Small black candle

The Umbrellas

The LOCATION plays a vital role

Bullish Reversal Pattern

Bullish Engulfing (Three Outside Up)

Piercing Line

Long Dawn Line

Morning Star

Bullish Harami (Three Inside Up)

Hammer

Inverted Hammer

Bearish Reversal Pattern

Bearish Engulfing (Three Outside Down)

Dark Cloud Cover

Short Dusk Line

Evening Star

Bearish Harami (Three Inside Down)

Hanging Man

Shooting Star

Divergence Trading

Types of Divergences
1. Bullish Divergence 2. Bearish Divergence

 Divergence trading using Oscillators

MACD RSI

Time frame
Daily for MACD H1 and H4 for RSI

Hidden Divergences
1. Bullish Hidden Divergence 2. Bearish Hidden Divergence

Additional Strategies
Multiple Time Frame Strategy Trading the EURUSD with USD index TPB Strategy : Trend, Pullback and Breakout

Checklist
1. Observation of the market trending or non trending, browsing through different time frames. 2. Drawing support and resistance levels, trend lines, fibonacci retracement, etc 3. Fundamentals check 4. Planning what strategy to use 5. Ask yourself, Is it worth the trade?.

PART 8: AFTER THE MARKET CLOSE

The importance of trading journal

Record every trades, win or loss. Details to write down include: entries, exits, stops, targets, S&R levels, open / close, high / low of day, duration of trades and key lessons learnt.

PART 9: DISCIPLINE

Plan the Trade, Trade the Plan

Practice, practice and practice Backtesting your system A mistake is when you trade wrong. A self sabotage is when you repeat the same mistake over and over again. A good trade is not always a profitable trade, a profitable trade may not be a good trade at all.

Resources
Melakafx.com Candlesticker.com Patterntradertools.com Steve Nisons Japanese Candlestick Charting Techniques, Beyond Candlesticks, The Candlestick Course Forex Patterns and Probabilities by Ed Ponsi Super Trader by Dr Van K. Tharp Secret Psychology of Millionaire Traders by Conrad Alvin Lim

Fundamental/Technical Trading Ideas

Forexfactory.com Kitco.com Bloomberg.com Investing.com Fxtechstrategy.com (subscription) Piphut.com (subscription)

Summary
Trading is a business Learning how to trade is a process Everything is a RESULT

Thank you and Happy Pipping!