Learn How to Trade in Forex Like a Pro

SEMINAR L earn How Trade In F orex L ike A Pro with Elliot Wave By Malaysia F orex Training Centre Asia F x Traders

Asia Fx Traders Risk Disclosure Trading in the off exchange retail foreign currency market (FOREX) have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This letter is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this letter. The past performance of any trading system or methodology is not necessarily indicative of future results. Trading in the off exchange retail foreign currency market (FOREX) is a challenging and potentially profitable opportunity for educated and experienced investors. However, 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 you cannot afford to lose.There is considerable exposure to risk in any foreign exchange transaction. Any transaction involving currencies involves risks including, but not limited to, the potential for changing political and/or economic conditions that may substantially affect the price or liquidity of a currency.More over, the leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. The possibility exists that you could sustain a total loss of initial margin funds and be required to deposit additional funds to maintain your position. If you fail to meet any margin call within the time prescribed, your position will be liquidated and you will be responsible for any resulting losses. Investors may lower their exposure to risk by employing risk-reducing strategies such as ’stop-loss’ or ‘limit’ orders. But in addition that, you may not imply or infer that stop-loss eliminate or “manage” risk. Risk with News Trading :- As with all major economic releases there could be significant price volatility with this announcement. Currency spreads will typically widen just before the release and will remain wide for a few minutes after. If the announcement is a shock to the consensus estimate, the price of the currency pair could gap significantly. For example, the price on the EURUSD trading at 1.2820 - 1.2822 just before release could gap up 60 pips to 1.2880 - 1.2882, without any available prices available between the price of 1.2820 and 1.2882. A Buy Stop placed before the announcement at 1.2830 would turn into a Market Order and would be filled at the prevailing price 1.2882. The same would be true with a Sell Stop.Approximately four years ago we saw a gap of approximately 200 pips on the GBPUSD on a Non-Farm Payroll announcement. While this is an extreme example, this is what is possible with trading during economic announcements. Basically, plan on the spreads widening and if you are trading with a Buy or a Sell Stop entry order, do not anticipate being filled at your entry price. You will be filled at the prevailing market price after the release, and this market price could be significantly different from your desired price of your entry order.

No representation is being made that these products or services, and any associated advice or training, will guarantee profits, or not result in losses from trading. Neither the products, nor any training services held in conjunction therewith, including, without limitation, through online seminars, alert services, in conjunction with our advertising and promotional campaigns, during our in-person seminars or otherwise, should be construed as providing a trade recommendation or the giving of investment advice. The purchase, sale or advice regarding a currency can only be performed by a licensed Broker/Dealer. Neither Asia Fx Traders (operator’s of http://asiafxtraders.com/), nor any of its affiliates, partners or associates involved in the in the production and maintenance of these products, services or this site, is a registered Broker/Dealer or Investment Advisor in any State or Federally-sanctioned jurisdiction. All purchasers of products and services referenced at this site are encouraged to consult with a licensed representative of their choice regarding any particular trade or trading strategy. Asia Fx Traders only provides a Forex Training in the Forex Trading. All Forex Technical Analysis information on this website or during the Forex Trading Seminar is for educational purposes only and is not intended to provide financial advice. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold Asia Fx Traders harmless in any and all ways. Trading in the off exchange retail foreign currency market is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose. Nothing in this presentation is a recommendation to buy or sell currencies and Asia Fx Traders is not liable for any loss or damage, including without limitation, any loss of profit which may arise directly or indirectly from the use of Asia Fx Traders tools or reliance on such information. All content copyright 2007 Asia Fx Traders. All rights reserved. * Disclaimer - “Asia FX

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CONTENTS

1.

Knowing the basic of Elliott Waves and Principles

2.

Trading with Elliott Waves, Strategy and Target.

3.

Trading System “Buj a ng S ena ng ”

The Basics of the Wave Principle

Presented by Elliot Wave MasterTrader

The Basics of the Wave Principle

1.00

Introduction — Ralph Nelson Elliott’s Discovery

2.00

Motive Waves

3.00

Corrective Waves

4.00

Rules

5.00

Guidelines

6.00

Wave Personalities

7.00

Fibonacci Relationships

1.01

Financial Market Behavior Characteristics

Emotional (Unconscious) Subjective Impulsive Ignorance and Uncertainty Herding Values Cannot Revert To Anything

1.02

The Wave Principle

Financial Markets are Patterned

1.03

Ralph Nelson Elliott (1871 – 1948)

• • • •

Crowd behavior trends and reverses in recognizable patterns, that he called waves. These structures link together to form larger versions of the same patterns and how those, in turn, become the building blocks for patterns of the next larger size and so on. In 1938, he coined this phenomenon The Wave Principle. Nature’s Law — The Secret of the Universe 1.04

1.05

1.06

1.07

1.08

1.09

A More Realistic Wave Depiction

1.10

1

2

4

5

3

6

1.11

5

6

7

1.12

The Wave Principle

Predict Market Direction Identify turning Points Provide Guidance for Entering and Exiting Positions

1.14

MOTIVE WAVES

MOTIVE WAVES Key Characteristics

• • • •

Five-wave structures, numbered 1-5 In the direction of the main trend of one larger degree Wave 2 cannot retrace more than 100% of wave 1 Wave 3 can never be the shortest and is often the longest

2.01

2.00

MOTIVE WAVES Five-Wave Structures

•

Impulse 1. Extensions 2. Truncations

•

Diagonal Triangles

2.02

IMPULSE WAVES Key Characteristics

• • •

Wave 4 never enters the price territory of wave 1. Actionary waves 1, 3 and 5 are motive waves. Wave 3 is always an impulse wave.

2.03

2.04

2.05

2.06

2.08

EXTENSIONS Key Characteristics

• • • •

Elongated impulse wave Appears in either wave 1, 3 or 5 Often seen in wave 3 for the stock market Often seen in wave 5 in commodities

2.09

2.10

2.11

2.12

2.13

2.14

TRUNCATIONS Key Characteristics

• • •

Wave 5 does not exceed the end of wave 3 Contains necessary five subwaves Often occurs after a strong third wave

2.15

2.16

2.17

2.18

DIAGONAL TRIANGLES Key Characteristics

• • • •

Wave 4 almost always moves into the price territory of wave 1 Waves 1, 3 and 5 are composed of three subwaves, not five Found at termination points of larger pattern, indicating exhaustion of larger pattern Normally has wedge shape within two converging lines

2.19

Diagonal Triangles

2.20

2.21

2.23

2.24

2.25

2.26

SUMMARY The Wave Principle = Graphic of Mass Psychology Motive Waves = 5 Wave Structures, Main Trend of One Larger Degree Types of Motive Waves = Impulse, Diagonal Triangle Impulse: Waves 1, 3, 5 = 5 Impulse Subwaves (Extensions, Truncations) Wave 4 ≠ Price Territory of Wave 1 Diagonal Triangle: Waves 1, 3, 5 = 3 Subwaves Wave 4 = Price Territory of Wave 1 Signal = Imminent Major Trend Reversal

2.27

CORRECTIVE WAVES

Characteristics of Corrective Waves

Zigzag 3.01

3.00

3.02

Characteristics of Corrective Waves

Flat 3.03

3.04

Characteristics of Corrective Waves

Triangle 3.05

Horizontal Triangles

3.06

Running Triangles

3.08

3.09

3.11

3.12

Characteristics of Corrective Waves

Combination 3.13

Combination

3.14

3.15

3.16

3.17

Corrective Waves Summary

A

B

Zigzag

5

3

Flat

3

Triangle

3

Combination

C

Shape

Position

5

Sharp

Wave 2

3

5

Sideways

Wave 4

3

3

Sideways

Wave 4

Sideways

Wave 4

X wave

D

3

E

3

3.18

Rules

• • •

Of waves 1, 3 and 5, wave 3 can never be the shortest wave. Wave 2 can never retrace more than 100% of wave 1. The end of wave 4 can never overlap the orthodox end of wave 1. Strong Guideline

•

No portion of wave 4 can enter the price territory of wave 1 or wave 2. 4.00

Rules

4.01

Rules

4.02

Rules

This five-wave move cannot be the start of a new trend. It can be wave C of a corrective pattern.

4.03

Rules

What might this be?

Significant Bottom

4.04

Rules

What might this be?

4.05

Rules

Wave 3 is never the shortest of waves 1, 3 and 5. This could be part of a wave 3 extension.

4.06

Rules

Significant Bottom

What might this be?

4.07

Rules

What might this be?

4.08

Rules

Wave 4 does not overlap the price territory of wave 1. This could be the start of a 3rd wave extension or an A-B-C correction.

4.09

Guidelines

• • • • • • •

Equality Alternation Depth Channeling Throw-Over Volume Post-Triangle Thrust Measurement

5.00

Guidelines Wave Equality

• • •

Two of the motive waves in a five-wave sequence will tend toward equality in time and magnitude. This is generally true of the two non-extended waves. For example, if wave 3 is extended then waves 1 and 5 will tend toward equality.

5.01

Equality

5.02

Equality

5.03

Guidelines Alternation Within Impulse Waves

• • • •

If wave 2 is a sharp correction, expect wave 4 to be a sideways correction, and vice versa. Sharp corrections never include a new price extreme. Example: Zigzags Sideways corrections usually include a new price extreme. Examples: Flats, Triangles, and Combinations Diagonal triangles do not display alternation in subwaves 2 and 4. 5.04

Alternation within Impulse Waves

5.05

Alternation within Impulse Waves

5.06

Alternation within Impulse Waves

5.07

Alternation within Impulse Waves

5.08

Alternation within Impulse Waves

5.09

Guidelines Alternation Within Corrective Waves

• •

If a correction begins with a flat a-b-c structure for wave A, then expect a zigzag a-b-c structure for wave B, and vice versa. If a large correction begins with a simple a-b-c zigzag for wave A, wave B will stretch out into a more complex a-b-c zigzag.

5.10

Guidelines Alternation within Corrective Waves

5.11

Guidelines Alternation within Corrective Waves

5.12

Alternation within Corrective Waves

5.13

Alternation within Corrective Waves

5.14

Alternation within Corrective Waves

Zigzag 5-3-5

5.15

Guidelines Depth of Corrective Waves

Corrections, especially when they are fourth waves, tend to register their maximum retracement within the span of travel of the previous fourth wave of one lesser degree and most commonly near its terminus.

5.16

Guidelines Depth of Corrective Waves

5.17

Depth of Corrective Waves

5.18

Depth of Corrective Waves

5.19

Guidelines Channeling

A parallel trend channel typically marks the upper and lower boundaries of impulse waves and zigzag corrective waves.

5.20

Guidelines Channeling in Impulse Waves

5.21

Channeling in Impulse Waves

5.22

Channeling in Impulse Waves

5.23

Channeling in Impulse Waves

5.24

Channeling in Impulse Waves

5.25

Channeling in Impulse Waves

5.26

Channeling in Impulse Waves

5.27

Guidelines Channeling in Zigzags

5.28

Channeling in Corrective Waves

5.29

Channeling in Corrective Waves

5.30

Channeling in Corrective Waves

5.31

Guidelines Throw-Over

5.32

Throw-Over

5.33

Guidelines — Volume Waves < Primary Degree Normally, 3rd wave volume > 5th wave volume 5th wave volume > 3rd wave volume = 5th wave extension Waves > Primary Degree Higher volume in 5th waves All-time high volume at terminal points in bull markets

• •

Volume often spikes briefly at the throw-over point of a parallel trend channel line or a diagonal triangle resistance line. Volume contracts in corrective waves. 5.34

Volume

5.35

Post-Triangle Thrust Measurement

5.36

5.38

Summary

• • • • • •

Two motive waves in a five wave sequence will tend toward equality. If the second wave is sharp, then the fourth wave is usually sideways, and vice versa. Corrective waves usually end in the span of the previous fourth wave of one lesser degree. Impulse waves tend to be bounded by a channel composed of two parallel lines. A throw-over/throw-under occurs when wave 5 terminates beyond the trend channel. The post-triangle thrust measurement estimates price target for the next wave in the pattern of one larger degree. 5.39

Wave Personality

6.00

Wave Personality

6.01

Fibonacci Relationships In Financial Markets

The Golden Ratio PHI Φ .618 or 1.618

7.00

Golden Ratio, PHI, Φ

7.01

Golden Ratio, PHI, Φ

7.02

Fibonacci Relationships are Seen in Time and Amplitude

•

Retracements

•

Multiples

7.03

Retracements

7.04

Retracements

7.05

Retracements

7.06

Retracements

7.07

Retracements

7.08

Fibonacci Time Relationships

7.14

Fibonacci Time Relationships

7.15

Summary

• • • • • •

The Fibonacci Ratio (Φ), an irrational number approximating .618, known as the Golden Ratio, is found in nature, human biology, human thought, and aggregate human behavior such as the stock market. The Wave Principle is a robust fractal governed by Fibonacci mathematics. Sharp wave corrections tend to retrace 61.8% or 50% of the previous wave. Sideways corrections tend to retrace 38.2% of the previous wave. Subdivisions of impulse waves tend to be related by Fibonacci numbers .618, 1.0, 1.618 and 2.618. Subdivisions of corrective waves tend to be related by Fibonacci numbers .382, .618, 1.0 and 1.618. 7.16

Alternation within Corrective Waves

8.08

Depth of Corrective Waves

8.09

Channeling in Impulse Waves

8.10

Throw-Over

8.11

Wave Personality

8.14

Fibonacci Relationships In Financial Markets

The Golden Ratio PHI Φ .618 or 1.618

8.15

Retracements

8.16