Forex Trading Handbook

End of Day Process

  1.  Fundamental Data
    • If there has been a FUET:
      • Update Fundamental Data, Latest and 1 Year Direction and Next columns
      • Update the relevant Fundamental Analysis on jeepsontrading.com and indicate the next FUET
    • For upcoming events on Fundamental Data, review Consensus Direction if this causes a significant change to the Fundamental Direction, make a note.
  2. Review Sentiment
    • Note each currency that has had a SEET.
    • Review the calendar and note if the Current Sentiment according to the SEET forecast on jeepsontrading.com
    • Read the market summary reports and make a note of currencies that have had an event and the reported sentiment
    • Review the currency indexes and note the percentage movement
    • Review Political Risk
  3. Report Sentiment
    • Update the currency sentiment page on jeepsontrading.com for the currencies that have been noted using the Sentiment Analysis process.
    • Note the currency pairs that can be traded, Tradable Pairs [TRAP]
  4. Technical Analysis
    • Abort/cancel the trades on MT5 and close the charts for Untradeable Pairs [UNPA]
    • Go through Technical Analysis Process for the TRAP’s
  5. Orders
    • Enter orders into MT5

Fundamental Evaluation Time [FUET]

  • Check metrics for quick evaluation of Pessimistic or optimistic
  • Check currency pairs for upcoming release
  • Review data release on Economic Calendar
  • Following release, where necessary update orders then charts

Sentiment Evaluation Time [SEET]

  • Check metrics for quick evaluation of Pessimistic or optimistic
  • Check currency pairs for upcoming release
  • Review data release on Economic Calendar
  • Following release, where necessary update orders then charts

Technical Analysis Process

Long Term Trend

Review the timeframes beginning with the longest and identify the long term trend. Using rectangles, highlight the trend reversal line’s, on both Fibonacci and Line charts. The trend reversal line should ideally have at least 2 hits if possible. The rectangle height cannot be too large and has a limit of 200 pips.

This rectangle is referred to as the Trend Reversal Zone [TRRZ].

2

1

Short Term Trend

Now reduce the timeframe until you see a defined trend that bounces the Long Term TRRZ’s. Overlay a Fibonacci retracement and identify the fib level that was most recently tested, this is known as the Trend Break Point [TRBP].

Using the TRBP as a guide, highlight the short term TRRZ. The rectangle size should be restricted to a maximum of 100 pips.

3

Micro Term Trend

Now reduce the timeframe again, until you see a defined trend that bounces the Short Term TRRZ’s. Overlay a Fibonacci retracement and identify the fib level that was most recently tested, the TRBP.

Using the TRBP as a guide, highlight the micro term TRRZ. The rectangle size should be restricted to a maximum of 50 pips.

Summary

With the chart now containing the overlays that detail the trends, you are better informed to decide appropriate places to enter the market. It is important to restrict entries to the TRRZ’s.

Fundamental Analysis Process

Fundamental Analysis is done to determine the Economic Direction of a currency which can be measured on a scale of:

  • Improving
  • Flat
  • Worsening

Calculating the direction is done by reviewing the high level indicators of the following categories and reporting the average.

  • GDP Growth Rate
  • Unemployment Rate
  • Inflation Rate
  • Interest Rate
  • Balance of Trade
  • Government Debt to GDP

When reviewing the indicators, take note of the direction over the last twelve months and report as either:

  • Improving
  • Flat
  • Worsening

The direction of Inflation Rate is reported three times and Interest Rate is reported twice as these are considered to carry more weight.

The best place to review this data is at Trading Economics. For example, here is the link for United States.