d.o.t.s. – guppy · 2 disclaimer: compassfx receives a volume based referral fee for its...

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Disclaimer: CompassFX receives a volume based referral fee for its services. Trading in the off-exchange Foreign Exchange market (FX, Forex) is very speculative in nature, involves considerable risk and is notappropriate for all investors. Therefore, before deciding to participate in off-exchange Foreign Exchange trading, you should carefully consider your investment objectives, level of experience and risk appetite.Investors should only use risk capital when trading Forex because there is always the risk of substantial loss. Most importantly, do not invest money you cannot afford to lose. Any mention of past performance isnot indicative of future results. Account access, trade executions and system response may be adversely affected by market conditions, quote delays, system performance and other factors.

D.O.T.S. – GuppyTrading Method

D.O.T.S. – GuppyTrading Method

Dean Malonewww.compassfx.com/dots

©CompassFX, 2015www.compassfx.com

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Unique experiences and past performances do not guaranteefuture results.

Trading in the off-exchange Foreign Exchange market (Forex) isvery speculative in nature, involves considerable risk and is notappropriate for all investors. Therefore, before deciding toparticipate in Foreign Exchange trading, you should carefullyconsider your investment objectives, level of experience and riskappetite. Investors should only use risk capital when trading Forexbecause there is always the risk of substantial loss. Mostimportantly, do not invest money you cannot afford to lose. Thereis always the potential for loss. Your trading results may vary.

No representation is being made that any software or training willguarantee profits or not result in losses from trading.

Disclaimer


Unique experiences and past performances do not guaranteefuture results.

Trading in the off-exchange Foreign Exchange market (Forex) isvery speculative in nature, involves considerable risk and is notappropriate for all investors. Therefore, before deciding toparticipate in Foreign Exchange trading, you should carefullyconsider your investment objectives, level of experience and riskappetite. Investors should only use risk capital when trading Forexbecause there is always the risk of substantial loss. Mostimportantly, do not invest money you cannot afford to lose. Thereis always the potential for loss. Your trading results may vary.

No representation is being made that any software or training willguarantee profits or not result in losses from trading.

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U.S. Government Required Disclaimer – Trading foreign exchange on margin carries ahigh level of risk, and may not be suitable for all investors. The high degree ofleverage can work against you as well as for you. Before deciding to invest in foreignexchange you should carefully consider your investment objectives, level ofexperience, and risk appetite. The possibility exists that you could sustain a loss ofsome or all of your initial investment and therefore you should not invest money thatyou cannot afford to lose. You should be aware of all the risks associated with foreignexchange trading, and seek advice from an independent financial advisor if you haveany doubts.

CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVECERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATEDRESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOTBEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THEIMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY.SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THATTHEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION ISBEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSESSIMILAR TO THOSE SHOWN.

Disclaimer


U.S. Government Required Disclaimer – Trading foreign exchange on margin carries ahigh level of risk, and may not be suitable for all investors. The high degree ofleverage can work against you as well as for you. Before deciding to invest in foreignexchange you should carefully consider your investment objectives, level ofexperience, and risk appetite. The possibility exists that you could sustain a loss ofsome or all of your initial investment and therefore you should not invest money thatyou cannot afford to lose. You should be aware of all the risks associated with foreignexchange trading, and seek advice from an independent financial advisor if you haveany doubts.

CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVECERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATEDRESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOTBEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THEIMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY.SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THATTHEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION ISBEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSESSIMILAR TO THOSE SHOWN.

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Topics Covered

• Understanding Guppies

• DOTS-Guppy Trade

• Trade Entry Criteria

DOTSDOTS--Guppy TradeGuppy Trade


• Understanding Guppies

• DOTS-Guppy Trade

• Trade Entry Criteria

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Guppy OverviewGuppy Overview


Guppy OverviewGuppy Overview

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Understanding the GMMA

Guppy MMAsGuppy MMAs

Short-term GMMA = Traders

The traders always lead thechange in trend.

Their buying pushes up pricesin anticipation of a trendchange or continuation.

The trend survives only ifother buyers also come intothe market.

Green moving averagesrepresent TRADERS.


Short-term GMMA = Traders

The traders always lead thechange in trend.

Their buying pushes up pricesin anticipation of a trendchange or continuation.

The trend survives only ifother buyers also come intothe market.

Green moving averagesrepresent TRADERS.

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Long-term GMMA = Investors

Strong trends are supportedby long term investors andinstitutions.

The investor takes more timeto recognize the change in atrend but he always followsthe lead set by traders.


Red moving averagesrepresent INVESTORS.


Long-term GMMA = Investors

Strong trends are supportedby long term investors andinstitutions.

The investor takes more timeto recognize the change in atrend but he always followsthe lead set by traders.

Red moving averagesrepresent INVESTORS.

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Understanding the Guppies

Compression Phase

Means “Caution”…suggeststhere is an agreement amongtraders and/or investors at aprice level.

Traders and/or investors arepotentially exiting positions…and possible competitionbetween traders and investors.


Do NOT trade inCompression Phase.


Compression Phase

Means “Caution”…suggeststhere is an agreement amongtraders and/or investors at aprice level.

Traders and/or investors arepotentially exiting positions…and possible competitionbetween traders and investors.

Do NOT trade inCompression Phase.

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Expansion Phase

Means “Buying or Selling” inthe direction of the trend.

Often there is significantlygreater movement seen intraders.

Expansion seen in investors isa sign of continued strength inthe trend.


Trade during theExpansion Phase.


Expansion Phase

Means “Buying or Selling” inthe direction of the trend.

Often there is significantlygreater movement seen intraders.

Expansion seen in investors isa sign of continued strength inthe trend.

Trade during theExpansion Phase.

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Penetration Phase

Means “Change”…tradersmoving in opposite directionfrom investors.

If investors are reluctant tochange, traders are pushedback into the original trenddirection. But, if investors failto continue with trend, thenexpect change in the trend.



Penetration Phase

Means “Change”…tradersmoving in opposite directionfrom investors.

If investors are reluctant tochange, traders are pushedback into the original trenddirection. But, if investors failto continue with trend, thenexpect change in the trend.

Do NOT trade inPenetration Phase.

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Braiding / Weaving

Means “Price Agreement”from traders and investors.

No clear trend direction seenfrom traders or investors.

Traders are the first to move.


Do NOT trade duringBraiding / Weaving.


Braiding / Weaving

Means “Price Agreement”from traders and investors.

No clear trend direction seenfrom traders or investors.

Traders are the first to move.

Do NOT trade duringBraiding / Weaving.

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DOTS-Guppy TradeDOTS-Guppy Trade


DOTS-Guppy TradeDOTS-Guppy Trade

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Identify Long-term Guppy Multiple MAs

Identify Short-term Guppy Multiple MAs

Wait for trade setup – Trade Entry Checklist

Use DOTS levels for Entries & Exits.

Integrate a trade management plan.

DOTSDOTS--Guppy TradeGuppy Trade“Sonny Setup”

Identify Long-term Guppy Multiple MAs

Identify Short-term Guppy Multiple MAs

Wait for trade setup – Trade Entry Checklist

Use DOTS levels for Entries & Exits.

Integrate a trade management plan.


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Entry Criteria

1. MUST have good Angle and Separation (DOTS-Guppy Pattern)

2. Trade the Short-term Guppys in the direction of the Long-term Guppys.

3. Set Pending Orders… pending orders take fear out ofpulling the trigger.

4. Trade after the news! No pending orders around REDnews announcements.

5. Look to take valid entries on currency pairs of 5-pip spreador less.



1. MUST have good Angle and Separation (DOTS-Guppy Pattern)

2. Trade the Short-term Guppys in the direction of the Long-term Guppys.

3. Set Pending Orders… pending orders take fear out ofpulling the trigger.

4. Trade after the news! No pending orders around REDnews announcements.

5. Look to take valid entries on currency pairs of 5-pip spreador less.

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DOTS-GuppyTrade Entry Criteria





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Trade Entry Criteria

• Angle

• Separation

• Trend Direction

• Higher Time Frame


• Previous High/Low

• Support & Resistance

• RED News

• Market Sentiment


• Angle

• Separation

• Trend Direction

• Higher Time Frame

• Previous High/Low

• Support & Resistance

• RED News

• Market Sentiment

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AngleAngle

Slope of the Short-term and Long-term Guppies


Long TradeAngle of Guppys

between12:30 & 2:00

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AngleAngle

Slope of the Short-term and Long-term Guppies


Short tradeAngle of Guppys

between4:00 & 5:30

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A distinguishable separation between the 15 EMA and 30 EMA.Look for strong “rising” or “declining” angle of the 15 EMA.

SeparationSeparation


Look for increasingseparation betweenthe 15 & 30 EMAs.

Look for increasingseparation betweenthe 15 & 30 EMAs.

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Consider Slope & Direction ofShort-term & Long-term Guppys.

Trend DirectionTrend Direction


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Trend DirectionTrend DirectionConsider Slope & Direction of

Short-term & Long-term Guppys.


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Look for agreement between 15 and 30 minute charts.

Trend of Higher Time FrameTrend of Higher Time Frame

15-minute 30-minute


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Consider the break of a Previous High or Low near a BuyEntry or Sell Entry as additional trade confirmation.

Previous High or LowPrevious High or Low


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Monitor price action as it bounces or breaks major and minorSupport and Resistance levels.

Support / ResistanceSupport / Resistance


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High impact new events can cause temporary price spikes.Avoid trading 30 minutes before red news.

HighHigh--ImpactImpact REDRED NewsNews

Be aware of these news events:

• Interest Rate Announcement & Central Bank Minutes

• Employment / Unemployment (NFP)

• Gross Domestic Product (GDP)

• Consumer Price Index (CPI)

• Purchasing Managers Index (PMI)

• Trade Balance

• Home and Retail Sales


Be aware of these news events:

• Interest Rate Announcement & Central Bank Minutes

• Employment / Unemployment (NFP)

• Gross Domestic Product (GDP)

• Consumer Price Index (CPI)

• Purchasing Managers Index (PMI)

• Trade Balance

• Home and Retail Sales

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Sentiment is the prevailing market attitude as a result of theoverall economic assessment, fundamental and technical

factors and market reaction to world events.

Market SentimentMarket Sentiment


Monitor the marketfor currency strength

or weakness.

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CHF Weakness… affects other CHF currency pairs.

Market SentimentMarket Sentiment


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