Trading Academy

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Trading Academy The beginners guide to Stock
Trading
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Topics were going to cover

• Introducing new financial markets
• Market Hours
• Elliot Wave Theory
• Pivot Points

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Introducing New Financial Markets
What you need to know!
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Types of Financial Markets

• The financial markets can be divided into
  different subtypes
• Capital markets which consists of
• Stock markets, which provide financing through
  the issuance of shares or common stock, and
  enable the subsequent trading thereof.
• Bond markets, which provide financing through the
  issuance of bonds, and enable the subsequent
  trading thereof.
• Commodity markets, which facilitate the trading
  of commodities.
• Money markets, which provide short term debt
  financing and investment.
• Derivatives markets, which provide instruments
  for the management of financial risk.
• Futures markets, which provide standardized
  forward contracts for trading products at some
  future date see also forward market.
• Foreign exchange markets, which facilitate the
  trading of foreign exchange.
• Insurance markets, which facilitate the
  redistribution of various risks.
• (Further details will be contained in the
  Investment Handbook)

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Introducing the Foreign Exchange Market and
Market Hours (FX) (Video)
What you need to know
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Introducing Elliot Wave theory
What you need to know!
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Elliot Wave Theory Overview
Principles of Elliot Wave Theory

• Elliot Wave Theory assumes that the collective
  investor psychology (Optimistic/Pessimistic
  sentiment) exhibited by the market can be
  catalogued and categorised.
• There are five Impulse (trend) waves in the
  direction of the main trend, followed by three
  corrective (reversals) waves (a 5 3 move)
• This 5 3 move then becomes two sub-divisions of
  the next higher 5 3 wave
• The underlying 5 3 pattern remains constant,
  though the time span of each may vary.

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Elliot Wave Theory How does it work?
Wave 1 It is difficult to notice the beginning
of the first wave. Price movement and market
sentiment will determine the direction of the
impulse (trend) wave.
Wave 2 Occurs when the market price rapidly
retraces in the direction of the old price.
Sometimes the re-tracement can be as much as 100
but never goes below the start of Wave 1.
Wave 3 Is usually the largest and the strongest
of the trend waves. Prices rise quickly,
re-tracements are shallow and short-lived.
Corrective Trend A Corrective trends are harder
to identify than impulse waves. Most analyst and
traders assume that the drop is temporary
Corrective Trend B Market price appears to move
in the direction of the previous trend. Trades
and analyst are at odds about which way the
direction of the market will turn.
Wave 4 Wave 4 is typically difficult to
identify. It usually re-traces less the 38 of
Wave 3. The prevailing trend still determines the
movement of the price
Corrective Trend C Trend C is typically as large
or even larger the Trend A. Almost everyone
realises that a reversal in the previous trend
has occurred.
Wave 5 Is the last leg in the direction of the
dominate trend, this is where most novice and
average investors make their move. Widespread
news coverage.
5 3 Principle
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Elliot Wave Theory Time Scales
Time Scale of the Waves Grand Primary a few
months to a couple of years super cycle
multi-decade to multi-century Super cycle a few
years to a few decades Cycle one year to a few
years Intermediate weeks to months Minor
weeks Minute days Minuette hours
Subminuette minutes
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FRACTALES
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Introducing Pivot Points
What you need to know!
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Pivot Point Overview
PURPOSE The purpose of the
Pivot Point indicator is that it can be used
by traders to determine at which levels market
price could reach a reversal. i.e. can be used
to Determine support and resistance levels.
How is it calculated? Pivot points are
calculated as the average of the high, low and
close from the previous trading session Pivot
Point (High Low Close) / 3
Calculations Continued Support and resistance
levels are then calculated off the pivot point
like so First level support and
resistance First support (S1) (2PP)
High First resistance (R1) (2PP) Low Second
level of support and resistance Second support
(S2) PP (High Low)Second resistance (R2)
PP (High - Low)
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Pivot Points How to use them
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Pivot Points Flaws (False signals)
Price can hover around the support/resistance
lines.
Price movements can occasionally become very
volatile (ignoring support/resistance lines)
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In Summary
TOPICS WE HAVE COVERED

• Introduction to New Financial Markets
• Market Hours
• Elliot Wave Theory
• Pivot Points

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Congratulations you have graduated to
College/University

• Next and FINAL Presentation
• College/University 13th-3rd Year
• Market Sentiment
• Multiple Trading Personality disorder
• Money Management
• Creating your own trading strategy
• Plan your trade, Trade your plan

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Class Dismissed!!!