1. Todd Gordon Senior Technical Strategist FX trader, Gain Capital Asset Management Author, Strategy of the Day Regular contributor to CNBC’s Fast Money Popular Twitter contributor FOREX.com booth # 6314 Beirut 2010 Forex trading involves significant risk of loss and is not suitable for all investors.

2. What We Will Cover  Part 1 – Introduction and services we provide  Part 2 – The 3 dimensions of trading

3. Forex trading involves significant risk of loss and is not suitable for all investors. Part 1 Introduction

4. Forex trading involves significant risk of loss and is not suitable for all investors. Buying Breakouts

5. Forex trading involves significant risk of loss and is not suitable for all investors. Buying Breakouts

6. Forex trading involves significant risk of loss and is not suitable for all investors. Buying Breakouts

7. Forex trading involves significant risk of loss and is not suitable for all investors. Buying Breakouts

8. Forex trading involves significant risk of loss and is not suitable for all investors. Buying Breakouts

9. Forex trading involves significant risk of loss and is not suitable for all investors. Trading and Ski Racing?

10. Forex trading involves significant risk of loss and is not suitable for all investors.

11. Strategy Of The Day ** **The following are my actual trades as recommended through SOTD. The following are successful examples, though unsuccessful trades can and will occur. Due to timing, S.O.T.D. recommendations and actual executions will vary slightly. Additionally, the spreads inherent in my performance are generally at more favorable rates than that available to the typical retail investor. As such, you may not be able to achieve similar results as illustrated in this presentation.**

12. Forex trading involves significant risk of loss and is not suitable for all investors. Strategy Of The Day Results

13. Forex trading involves significant risk of loss and is not suitable for all investors. Twitter www.twitter.com/ToddGordonForex General market commentary Trading, position, SOTD updates Occasional attempts at humor www.twitter.com/ToddGordonTrade Trading, position, SOTD updates Ideal for SMS text alerts 5213 followers 989 followers

14. Forex trading involves significant risk of loss and is not suitable for all investors. GAIN Capital Asset Management  Money management firm established in 2000  Clients are both institutional and individual investors  Focuses solely on spot trading in G-7 currencies USD, EUR, JPY, GBP, AUD, NZD, CAD  Approximately $70M under management

15. Forex trading involves significant risk of loss and is not suitable for all investors. Part 2 The 3 Dimensions of Trading

16. Forex trading involves significant risk of loss and is not suitable for all investors. 3 Dimensions of Trading  # 1 – Intermarket analysis Identifying individual currency movement Identifying individual currency movement Identifying leading/lagging asset classes Identifying leading/lagging asset classes  # 2 – Identifying trading opportunities Disciplined pattern recognition Disciplined pattern recognition Precise, pre-planned trading strategies Precise, pre-planned trading strategies  # 3 – Account management Appropriate deployment of trading capital Appropriate deployment of trading capital Understand, acknowledging capital at risk Understand, acknowledging capital at risk

17. Forex trading involves significant risk of loss and is not suitable for all investors. 3 Dimensions of Trading #1- Intermarket analysis

18. Forex trading involves significant risk of loss and is not suitable for all investors. Identifying Currency Leadership USD EUR JPY / /

19. Forex trading involves significant risk of loss and is not suitable for all investors. Identifying Currency Leadership USD JPY / / EUR

20. Forex trading involves significant risk of loss and is not suitable for all investors. Identifying Currency Leadership EUR JPY/

21. Forex trading involves significant risk of loss and is not suitable for all investors. Which Currency To Trade? EUR/JPYUSD/JPY EUR/USD

22. Forex trading involves significant risk of loss and is not suitable for all investors. Indentifying Leadership

23. Forex trading involves significant risk of loss and is not suitable for all investors. Indentifying Leadership

24. Forex trading involves significant risk of loss and is not suitable for all investors. “Market trends anticipate economic trends.” -John Murphy Inter-Market Analysis

25. Forex trading involves significant risk of loss and is not suitable for all investors. AUD/JPY & Dow Overlay

26. Forex trading involves significant risk of loss and is not suitable for all investors. USD/JPY & US 10-yr Yield

27. Forex trading involves significant risk of loss and is not suitable for all investors. EUR/USD NOW Trades With Equities

28. Forex trading involves significant risk of loss and is not suitable for all investors. USD/CAD & Crude Oil

29. Forex trading involves significant risk of loss and is not suitable for all investors. AUD/USD & High Grade Copper

30. Forex trading involves significant risk of loss and is not suitable for all investors. 3 Dimensions of Trading #2 - Identifying trading opportunities With Elliott Wave and Fibonacci

31. Forex trading involves significant risk of loss and is not suitable for all investors. Forex trading carries a high level of risk and is not suitable for all investors. ELLIOTT WAVE A Disciplined Approach To Pattern Recognition and Risk Management *Paul Tudor Jones..calls Prechter and Frost's standard text on Elliott "a classic," and one of "the four Bibles of the business" -- “...and The Elliott Wave Theorist both give very specific and systematic ways to approach developing great reward/risk ratios for entering into (trade)" [19] [19] * http://en.wikipedia.org/wiki/Paul_Tudor_Jones

32. Forex trading involves significant risk of loss and is not suitable for all investors. Forex trading carries a high level of risk and is not suitable for all investors. Ralph Nelson Elliott (1871 - 1945)

33. Forex trading involves significant risk of loss and is not suitable for all investors. Forex trading carries a high level of risk and is not suitable for all investors. BASIC 5-WAVE PATTERN Wave 1 Wave 2 Wave 3 Wave 4 Wave 5 1 2 3 4 5 Forex trading involves significant risk of loss and is not suitable for all investors.

34. BASIC 5-WAVE PATTERN Wave 1 Wave 2 Wave 3 Wave 4 Wave 5 1 2 3 4 5 Wave 1 - Fundamentals poor - Investors fully, bearish expecting new lows -Heavy short selling - 5 wave subdivision Wave 2 -Investors fully bearish, certain of new lows - Heavily retraces W.1 - Fundamentals horrible, doom and gloom - Volumes light, as sellers dry up - 3 wave subdivision Wave 3 - Strong, deliberate, and extended price action - Fundamentals increasingly better - Investor confidence greatly improved - 5 extended subdivisions Wave 4 -Fundamentals temporarily peak, then pullback - Often shallow, yet prolonged consolidation Wave 5 - Investors extremely optimistic -Fundamentals return, but often not to W.3 levels - Price momentum less than W.3 Forex trading involves significant risk of loss and is not suitable for all investors.

35. TREND WAVES MOTIVE WAVES TREND WAVES MOTIVE WAVES.i.ii.iii.iv.v.a.b.c.i.ii.iii.iv.v.a.b.c.i.ii.iii.iv.v 1 2 3 4 5 Subdivides into waves of 5 Subdivides into waves of 5 W.2 can’t go below the beginning of W.1 W.2 can’t go below the beginning of W.1 W.4 always retraces less than 100% of W.3 W.4 always retraces less than 100% of W.3 W.4 can’t go below the beginning of W.3 W.4 can’t go below the beginning of W.3 W.3 is often the longest, never the shortest. W.3 is often the longest, never the shortest.

36. Forex trading involves significant risk of loss and is not suitable for all investors. Forex trading carries a high level of risk and is not suitable for all investors. Corrective Waves Corrective- possesses a 3-wave structure that retraces percentage of a prior motive Corrective- possesses a 3-wave structure that retraces percentage of a prior motive Waves 2,4 and B are corrective Waves 2,4 and B are corrective Subdivision are labelled with letters. Subdivision are labelled with letters. Waves are corrective when trending in the opposite direction to the wave of 1 larger degree. Waves are corrective when trending in the opposite direction to the wave of 1 larger degree.

37. Forex trading involves significant risk of loss and is not suitable for all investors. Forex trading carries a high level of risk and is not suitable for all investors. CORRECTIVE WAVES.1.2.3.4.5.A.B.C UptrendDowntrend A B C A B C

38. Forex trading involves significant risk of loss and is not suitable for all investors. Forex trading carries a high level of risk and is not suitable for all investors. Completed A-B-C Correction

39. Forex trading involves significant risk of loss and is not suitable for all investors. Fibonacci Ratio Analysis The map legend of Elliott Wave Principle…

40. Forex trading involves significant risk of loss and is not suitable for all investors. 0.3820.618 squared 0.5002nd N / 3rd N 0.618Inverse of Golden Ratio 0.707Square root of 2 0.786Square root of 0.618 1.0001.618 x 0.618 1.272Square root of 1.618 1.618Golden Ratio (Phi) 2.0001st N x 2nd N 2.6181.618 squared FIBONACCI RATIOS

41. Forex trading involves significant risk of loss and is not suitable for all investors. FIBONACCI ANALYSIS Retracements Extensions Projections

42. Forex trading involves significant risk of loss and is not suitable for all investors. Fibonacci Retracements 1 2 3 4 5 A B C 1 2 3 4 5 A B C 1 2 3 4 5.3.4.5.2.1 1 Used to analyze CORRECTIVE WAVES

43. Forex trading involves significant risk of loss and is not suitable for all investors. 1 2 3 4 5 A B C 1 2 3 4 5 A B C 1 2 3 4 5.3.4.5.2.1 1 100% 61.8% 100% 38.2% Fibonacci Retracements Used to analyze CORRECTIVE WAVES ….by measuring impulse waves

44. Forex trading involves significant risk of loss and is not suitable for all investors. AUD/USD – 11/11/09 – 5:01 PM EST “…I will be bidding for 2 units of AUDUSD at 0.9220 with stops for now at 0.9142. If filled and Aussie shows favorable upside action, I will quick trail the stop up behind me…”

45. Forex trading involves significant risk of loss and is not suitable for all investors. AUD/USD – 11/12/09 – 4:49 PM EST “…Filled on our AUDUSD bids today as the risk trade was hammered today. EURUSD seemed to the downside …Oil inventories were released today and came in higher than expected. And when combined with high risk aversion on the session, we would expect to see crude breaking significant support levels…. but support held at $76.50…as did Australia's major export, Copper, hold support at around 297.30.”

46. Forex trading involves significant risk of loss and is not suitable for all investors. AUD/USD – 11/13/09 – 1:51 PM EST “…Booking half of our profits on 0.9220 long AUDUSD at 0.9285 and trailing a stop on the balance to entry price. EURUSD is acting very heavy into the 1.4885 wave 4 resistance mentioned below…In light of fairly strong commodity markets, a positive equity close, and dollar overlap, I will remain long AUDUSD over the weekend with 0.9220 stops. ”

47. Forex trading involves significant risk of loss and is not suitable for all investors. AUD/USD – 11/16/09 – 2:05 PM EST “…We are still long the final piece of AUDUSD from 0.9220 and I am actively searching for a final exit spot. I have moved stops on the balance to 0.9320 locking in 100 pips on the final piece.” AUD/USD – 11/16/09 – 3:23 PM EST **POSITION UPDATE ** “…Target #1 0.9400 Met and Held. Closing last piece of AUDUSD long at 0.9375 for +155 pips.

48. Forex trading involves significant risk of loss and is not suitable for all investors. 3 Dimensions of Trading #3 - Account management

49. Calculating Stop Losses Depending on your conviction in the trade LOVE THE TRADE LOVE THE TRADE 6-8% of total capital at risk per trade Strong Conviction Strong Conviction 4-6% of total capital at risk per trade Average Trade Average Trade 2-4% of total capital at risk per trade Marginal Setup Marginal Setup 1-2% of total capital at risk per trade Forex trading involves significant risk of loss and is not suitable for all investors.

50. Capital at Risk per Trade Available Capital x 5% -------------------------------- = Maximum Position Size Capital Exposure per Lot $50,000 x 5% = $2,500 ------------------------------------ = 52 pips x $10.00 /pip = $520.00 4.8 lots. 5 LOTS 4.8 lots. 5 LOTS Forex trading involves significant risk of loss and is not suitable for all investors.

51. Planning Trades  Create a trade journal to develop discipline  Disciplined trade planning prevents an unplanned, emotional entry into the market  Should include:

52. Forex trading involves significant risk of loss and is not suitable for all investors. Position Tracker January 2010

53. Forex trading involves significant risk of loss and is not suitable for all investors. Elliott Wave Principle By Frost and Prechter Strategy of the Day Recommend Reading Strategy of the Day Recommend Reading By Robert Miner Intermarket Analysis By John Murphy Dynamic Trading

54. Forex trading involves significant risk of loss and is not suitable for all investors. QUESTIONS? tgordon@gaincapital.com Tel: (877) 367-3946 www.forex.com Both #6314