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 Middle East Traders Expo 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  Part 3 – Pulling it all together

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 December 2009

13. Forex trading involves significant risk of loss and is not suitable for all investors. Strategy Of The Day January 2010

14. Forex trading involves significant risk of loss and is not suitable for all investors. Strategy Of The Day February 2010

15. 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

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

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. “Market trends anticipate economic trends.” -John Murphy Inter-Market Analysis

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

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

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

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

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

29. Forex trading involves significant risk of loss and is not suitable for all investors. XAU & EUR/JPY

30. Forex trading involves significant risk of loss and is not suitable for all investors. 3 Dimensions of Trading 2) Identifying trading opportunities

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 a business contract with the marketplace, which is what every trade should be if properly and thoughtfully executed." [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 - 1934)

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. BASIC 5-WAVE PATTERN 2 Forex trading involves significant risk of loss and is not suitable for all investors.

37. Forex trading carries a high level of risk and is not suitable for all investors. WHICH COUNT IS VALID?

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. WHICH COUNT IS VALID?

39. 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. Similar Structure At All Degrees Of Trend 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 3 Degrees Of Trend Largest: Middle: Smallest 1.5 5

40. 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. 1 2 3 4 5 A B C 1 2 3 4 5 A B C 1 2 3 4 5.4.5.2 1 3 Degrees Of Trend Largest: Middle: Smallest 1.5 5 Similar Structure At All Degrees Of Trend.1.3

41. 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. 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 3 Degrees Of Trend Largest: Middle: Smallest 1.5 5 Similar Structure At All Degrees Of Trend

42. 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. 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 3 Degrees Of Trend Largest: Middle: Smallest 1.5 5 Similar Structure At All Degrees Of Trend

43. 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.

44. 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

45. 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. COMPLETE 8-WAVE CYCLE A B C 1 2 3 4 5 Wave 1 Wave 2 Wave 3 Wave 4 Wave 5 Wave A Wave B Wave C

46. 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. COMPLETE 8-WAVE CYCLE A B C 1 2 3 4 5 Wave 1 Wave 2 Wave 3 Wave 4 Wave 5 Wave A Public extremely bullish, convinced pullback presents an easy buying opportunity Wave B Head fakes. Bullish investors from Wave A are confirmed, just before nasty reversal below Wave A origins Wave C Highly discouraging, very little bullishness, stops below wave B origin triggered, capitulation

47. 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

48. 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. LABELING WAVES Monthly IIIIIIIVVabc 16 Weekly.I.II.III.IV.V.a.b.c 15 Daily IIIIIIIVVabc 14 720-360 min 12345ABC 13 240-120 min.1.2.3.4.5.A.B.C 12 90-60 min 12345ABC 11 45-30 min iiiiiiivvabc 10 20-10 min.i.ii.iii.iv.v.a.b.c 9 5-1 miniiiiiiivvabc 8 Time FrameFont Size

49. 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. Monthly IIIIIIIVVabc 16 Weekly.I.II.III.IV.V.a.b.c 15 Daily IIIIIIIVVabc 14 720-360 min 12345ABC 13 240-120 min.1.2.3.4.5.A.B.C 12 90-60 min 12345ABC 11 45-30 min iiiiiiivvabc 10 20-10 min.i.ii.iii.iv.v.a.b.c 9 5-1 miniiiiiiivvabc 8

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

51. 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

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

53. 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

54. 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

55. Forex trading involves significant risk of loss and is not suitable for all investors. FIBONACCI RETRACEMENTS 1 2 3 4 5.1 1. Identify a completed 5-wave impulse

56. Forex trading involves significant risk of loss and is not suitable for all investors. FIBONACCI RETRACEMENTS 1 2 3 4 5.1 2. Anticipate a 3-wave correction A B C.2 - ?

57. Forex trading involves significant risk of loss and is not suitable for all investors. FIBONACCI RETRACEMENTS 1 2 3 4 5.1 2. Click endpoints of the impulse wave to define levels A B C.2 - ? 0.000 0.382 0.500 0.618 0.786 1.000 0.707

58. Forex trading involves significant risk of loss and is not suitable for all investors. FIBONACCI RETRACEMENTS 1 2 3 4 5.1 3. Look for end of wave C A B C.2 - ? 0.000 0.382 0.500 0.618 0.786 1.000 0.707

59. Forex trading involves significant risk of loss and is not suitable for all investors. FIBONACCI RETRACEMENTS 1 2 3 4 5.1 3. Look for end of wave C A B C.2 - ? 0.000 0.382 0.500 0.618 0.786 1.000 0.707

60. Forex trading involves significant risk of loss and is not suitable for all investors. Strategy of the Day AUD/JPY – July 6-8, 2009 Recent Trade Review Forex trading involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk.

61. Forex trading involves significant risk of loss and is not suitable for all investors. SOTD – Mon. July 6, 2009 …With light size I am shorting 1 lot at 76.05 and another then another lot at 76.40…

62. Forex trading involves significant risk of loss and is not suitable for all investors. SOTD – Tues July 7, 2009 …Filled on both pieces of AUDJPY short, ….

63. Forex trading involves significant risk of loss and is not suitable for all investors. SOTD – Tues July 7, 2009 AUD/JPY is moving lower for us…

64. Forex trading involves significant risk of loss and is not suitable for all investors. SOTD – Wed. July 8, 2009 …we are targeting 74.00 to close our short position…

65. Forex trading involves significant risk of loss and is not suitable for all investors. SOTD – Wed. July 8, 2009 …I closed the last piece of our AUDJPY short at 74.00 for +215 pips…. …..BUT THEN….

66. Forex trading involves significant risk of loss and is not suitable for all investors. Rio Tinto Trade

67. Forex trading involves significant risk of loss and is not suitable for all investors. Strategy of the Day AUD/USD – Nov 11-16, 2009 Recent Trade Review Forex trading involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk.

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

69. 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…”

70. 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.”

71. 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. ”

72. Forex trading involves significant risk of loss and is not suitable for all investors. AUD/USD – 11/16/09 – 2:05 PM EST (Bernanke speaking at New York Economic Club, EURUSD was hit hard, but AUDUSD broke to new highs) “…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.”

73. Forex trading involves significant risk of loss and is not suitable for all investors. AUD/USD – 11/16/09 – 2:05 PM EST “… **POSITION UPDATE ** AUDUSD Target #1 0.9400 Met and Held. Closing last piece of AUDUSD long at 0.9375 for +155 pips. ** POSITION INITATION** EURUSD SHORTING 2 units of EURUSD at MARKET - 1.4975 with ORDERS to SELL 1 unit at 1.4985 and 1 unit at 1.4995. Stops for all 4 units are 1.5025. Looking to add to this position. TG.

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

75. 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.

76. 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.

77. Capital at Risk per Trade Alex is a swing trader and wants to initiate a EURUSD position on the 3 hour chart. Alex has strong conviction in the trade and wants to risk 5% of total capital. He trades lots of 10,000 and has a $20,000 account. The ATR as of 3/6/09 is 67 pips. Therefore Alex should work with a 134 pip stop loss. How many lots should Alex use? How many lots should Alex use?

78. Forex trading involves significant risk of loss and is not suitable for all investors. Planning Trades  Create a trade journal to develop discipline  Disciplined trade planning prevents an unplanned, emotional entry into the market  Should include:

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

80. Forex trading involves significant risk of loss and is not suitable for all investors. Part 3 The 3 Dimensions of Trading AUDUSD and EURUSD Trade Wed 11/11/09 – Mon 11/16/09

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

82. 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…”

83. 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.”

84. 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. ”

85. Forex trading involves significant risk of loss and is not suitable for all investors. AUD/USD – 11/16/09 – 2:05 PM EST (Bernanke speaking at New York Economic Club, EURUSD was hit hard, but AUDUSD broke to new highs) “…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.”

86. Forex trading involves significant risk of loss and is not suitable for all investors. AUD/USD – 11/16/09 – 2:05 PM EST “… **POSITION UPDATE ** AUDUSD Target #1 0.9400 Met and Held. Closing last piece of AUDUSD long at 0.9375 for +155 pips. ** POSITION INITATION** EURUSD SHORTING 2 units of EURUSD at MARKET - 1.4975 with ORDERS to SELL 1 unit at 1.4985 and 1 unit at 1.4995. Stops for all 4 units are 1.5025. Looking to add to this position. TG.

87. 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

88. 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