High Risk Investment Disclaimer

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree

of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully

consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a

loss of some or all of your initial investment and therefore you should not invest money that you cannot 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.

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Justin Butler

Justin Butler Institutional Sales Manager, ThinkForex

Years of Experience 7+ Years

Specialization Institutional Forex Services Retail Trading Strategy

EDUCATION DRIVES SUCCESSStrategies of a Professional FX Trader

April 26th, 2012

Justin Butler – ThinkForex.com

Agenda

• Review of Trading Strategies

• Key Elements of Successful Trading Strategies

• Trend Identification

• Defined Entry & Exit Signals

• Strict Money Management

Examples of Some Basic Strategies

• Trend Following

• Moving Averages Cross

• Channel Breakout

• Short-Term Range Breakouts

Example Trading Strategies – Trend Following

Moving Average Cross 34 / 100 Daily EMA Example

Entry

Exit

• Buy when 34 EMA crosses above 100 EMA

• Sell when 34 EMA crosses Below 100 EMA

• Close trade when 34 EMA crosses 100 EMA in opposite direction of entry

• Long view traders

• Generates a small amount of trades and few false signals

Rules

Style - Slow

Trading Strategies – Channel Breakout

Short-Term Range Breakout– Various Forms – 15 min Chart

Sell Signal

• Identify trading ranges

• Buy / Sell on breakout

• Close - Depends on custom target

• Mid to short-term traders

• Generates numerous trades

• Greater chance of false signals

Rules

Style – Moderate Speed

Sell Signal

False Sell Signal

False Buy Signal

Buy Signal

Elements of Successful Trading Strategies

Defined Entry & Exit Signals

Strict Money Management

Trend Identification

Complete Strategy

Trend Identification - How to Filter Global Information

News & Events move the markets more than ever!

Last R2 R1 Pivot S1 S2EURUSD 1.31148 1.32103 1.3168 1.31289 1.30866 1.30475GBPUSD 1.60204 1.60249 1.59737 1.59175 1.58663 1.58101USDJPY 81.24 81.286 81.059 80.694 80.467 80.102USDCHF 0.91625 0.92085 0.91797 0.91524 0.91236 0.90963USDCAD 0.99103 1.00708 0.99858 0.99251 0.98401 0.97794AUDUSD 1.03617 1.04816 1.04351 1.03695 1.0323 1.02574NZDUSD 0.81673 0.82805 0.8245 0.8197 0.81615 0.81135EURJPY 106.55 106.923 106.512 105.893 105.482 104.863GBPJPY 130.144 129.818 129.26 128.402 127.844 126.986CHFJPY 88.644 88.975 88.639 88.106 87.77 87.237AUDJPY 84.178 84.979 84.478 83.671 83.17 82.363CADJPY 81.943 82.8 82.206 81.259 80.665 79.718XAUUSD 1640.11 1668.06 1658.68 1647.22 1637.84 1626.38XAGUSD 31.417 32.172 31.923 31.623 31.374 31.074Dollar Inx 79.58 79.94 79.75 79.57 79.38 79.2

0.10%

Performance %-0.08%0.62%0.50%0.13%

0.40%-0.56%-0.81%0.03%

-0.26%-0.51%0.42%1.12%0.39%0.24%

? ?

?

??

Where is money flowing to or from and why?

Reserve or secondary currency?

Impact Perception?

Trend Identification - Trade with the Trend

Signals in the direction of the trend have a higher probability of success

• When price crosses below the 200 EMA the trend is down

• When price crosses below the 200 EMA the trend is Up

200 Daily EMA

Defined Entry & Exit Signals - Remove Emotion

• Keep it Simple

• Limit entry / exit signals to trigger on a specific indicator or combination of 2 indicators – Avoid false signals

• Remove the emotion of the decision process

• Never trade on a non-signalConflicting Signals – 3 EMA Combination Cross signals Buy, RSI signals sell – No Trade

Strict Money Management – Control Risk Every Time!

• Most traders are wrong a large % of the time

• Successful trader limit loss

• You can be wrong and still be profitable

• Use a Risk/Reward ratio of 1: 2 or greater

Successful traders are not right they are consistent.

Strategies of a Professional FX Trader - Recap

• Trend Identification

• Defined Entry & Exit Signals

• Strict Money Management

Successful traders use a systematic process that include:

EDUCATION DRIVES SUCCESSEmail me directly for a copy of the presentation.

Jbutler@ThinkForex.com

EDUCATION DRIVES SUCCESSStrategies of a Professional FX Trader

April 26th, 2012

Justin Butler – ThinkForex.com