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Kairo Beginners Handbook

The document is a beginner's handbook for trading on Deriv, outlining steps to create an account, understand the MT5 trading app, and analyze the forex market. It covers key concepts such as price action trading, market structure, and the importance of support and resistance levels for making informed trading decisions. The information provided is for educational purposes only and does not constitute financial advice.

Uploaded by

Mpho Badumeleng
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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44 views

Kairo Beginners Handbook

The document is a beginner's handbook for trading on Deriv, outlining steps to create an account, understand the MT5 trading app, and analyze the forex market. It covers key concepts such as price action trading, market structure, and the importance of support and resistance levels for making informed trading decisions. The information provided is for educational purposes only and does not constitute financial advice.

Uploaded by

Mpho Badumeleng
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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TRADING ON DERIV

BEGINNERS HANDBOOK VL 1
T. G TAMOCHA

Disclaimer:
All information in this book is purely for educational purposes. The Information in this book is not
intended to be and does not constitute financial advice. It is general in nature and not specific to you.
You are responsible for your own investment research and investment decisions.
HOW TO GET STARTED TRADING ON DERIV
1. Create a trading account/Click the link below
https://track.deriv.com/_7RfflV_4QgxBMfcXPt5VjGNd7ZgqdRLk/1/

CLICK THE LINK ABOVE


CLICK OPEN ACCOUNT

TYPE IN YOUR EMAIL ADDRESS


CLICK CREATE ACCOUNT

A VERIFICATION WILL BE SENT


TO YOUR EMAIL TO CONFIRM

CREATE PASSWORD
UNDERSTANDING THE MT5 TRADING APP
1. How to read the forex chart
2. How to place trades

WHAT TO TRADE ON DERIV FOR BEGINNERS


1. Volatility Indices
2. Boom & Crash Indices

ANALYSING THE FOREX MARKET


1. Technical Analysis (Price Action Trading)
2. How to use Indicators
- Bollinger bands
- Relative Strength Index
- Moving Averages

Download Zoom meeting app and the MT5 App from Playstore
- The Zoom meeting app will be used for our virtual classes
PRICE ACTION TRADING
Price action trading is a style of trading that relies on how the price
moves overtime as opposed to market indicators or other technical
analysis tools.

There are no technical indicators like moving average or RSI. Instead,


price action traders use the “historical” price and volume data of a
security to determine where the security is likely to go in the future.
Traders may draw trend lines or rely on candlestick patterns to make
such decisions. The trader believes that the market price reflects all
available information so at any given time you can analyse the current
price action and decide how to trade.

You can trade price action using a variety of methods and at different
time frames. Some prefer to trade the higher time frames such as the
daily chart, while others prefer to trade the lower time frames such as
the hourly chart.

MARKET STRUCTURE
Market structure by definition is the simplest form of price
movement in the market and is being to read it. It is basic
support and resistance levels on the charts, swing highs, and
swing lows. These are levels, which are easily identified and
hold until they don’t. Market structure is a trend following tool
that traders read and follow based on how an asset moves.
From bullish moves, to bearish and in between with ranges.
Types of Market Structure

Market structure is simple and a basic form of understanding,


how markets move. It’s made easier with just 3 different types
of market structure. While Price Action is how the market
moves based just on price. Without the consideration of
trends and how they may continue.

The market trend in 3 different directions at any given time and


understanding when a shift occurs based on the timeframe
YOU watch is pivotal to successful trading. The 3 types of
market structure are:

1. Bull trend
2. Bear trend
3. Sideways trend

Markets trend in one the three directions above and


understanding how to read the continuation of the trend of the
failure of the trend all comes from being able to read market
structure. The majority of the time, the market trends in a
sideways motion. Or a range, then you have quick bursts in
either direction.

The bull trend is depicted by higher highs and higher lows. The
trend will continue in that direction until a lower low is printed
by the asset price. The trend begins to show signs of weakness
when it fails to print and higher high.

The bear trend is the price action of lower lows and lower highs.
The bear trend will continue to fall as long as lower highs
continue to print, once a higher high comes into the price, the
trend will end. The sign that the trend may be reversing is price
beginning to print higher lows or equal lows.

A disclaimer, market structure, and price trends can be different


depending on the timeframe chosen to trade. If you are a day
trader you may see a certain trend on a daily chart, then on an
intraday chart it may be completely opposite.
Upward Trend
An upward trend is when the market according to the chart moves
upwards with a positive slope and two or more low points. The second
low must be higher than the first for the line to have a positive slope.
Drawing a trendline using the points is only considered to be valid when
there are at least three.

Downward Trend
A downward trend is when the market according to the chart and
candlesticks arrangement moves downwards with a negative slope and
two or more low points. The second low must be lower than the first for
the line to have a negative slope. Drawing a trendline using the points is
only considered to be valid when there are at least three.

Sideways Trend
The sideways trend is a trend that has equal highs and equal lows. Price
trends in a range during this point of the market and is in consolidation.
Markets can move in a period of consolidation for a long time. This trend
is broken if the price breaks out from the top or bottom of the range.
This could be the beginning of one of the first two trends.
SUPPORT AND RESISTANCE ZONES

As important as market structure and trend structure is, so is support


and resistance drawing. If you know where to draw your support and
demand zones you will have an easier time finding entries and exits.
Support and resistance levels can be drawn on multiple different
timeframes dependent on what it is you’re trading.

For example, if you’re swing trading then looking at a larger time frame
to start is recommended. Start with a weekly chart, draw your key levels.
Explore the daily then the hourly or 4-hour to refine those levels.

If your day trading starts with the hourly chart, draw your support and
resistance levels. Then move onto the 10-min and the 5-min to refine the
levels and draw more key levels you may have missed.

The key to drawing support resistance is twofold:

1. Find extreme areas of rejection


2. Multiple tests of the same levels.
How to trade price action signals from support and resistance levels

Support and resistance levels are a price action trader’s ‘best friend’.
When a price action entry signal forms at a key level of support or
resistance, it can be a high-probability entry scenario. The key level gives
you a ‘barrier’ to place your stop loss beyond and since it has a strong
chance of being a turning point in the market, there’s usually a good risk
reward ratio formed at key levels of support and resistance in a market.

The price action entry signal, such as a pin bar signal or other, provides
us with some ‘confirmation’ that price may indeed move away from the
key level of support or resistance.

Tips on Support and Resistance

 Don’t get too carried away with trying to draw every little level on your
charts. Aim to find the key daily chart levels, like we showed in the
examples above, as these are the most important ones.

 The horizontal lines of support or resistance that you draw won’t always
touch the ‘exact’ high or low of the bars it connects. Sometimes, it’s OK
if the line connects bars slightly down from the high or up from the low.
The important thing to realize is that this is not an exact science, instead
it is both a skill and an art that you’ll improve at through training,
experience and time.

 When in doubt about whether to take a particular price action entry


signal or not, ask yourself if it’s at a key level of support or resistance. If
it’s not at a key level of support or resistance, it might be better to pass
on the signal.

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