Delta Index Trading Summit Currency Presentation

INTRODUCTION

GAVAN DUNNE

Over 15 Years Trading Experience

Own Account Trading Proprietary Trading Institutional Brokerage Electronic Brokerage

2009 Own Account FX Trading

____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

WHAT FACTORS AFFECT FOREIGN EXCHANGE

____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

COMMODITIES • INTEREST RATES % • INFLATION • GROWTH • LEVERAGE

• USD: Rising Commodities Prices ‘Devalue’ the US Dollar.

• EUR & GBP: Rising Commodity Prices ‘Support’ Euro & Pound.

• CHF & JPY: Risking Commodity Prices Supports Long End of Yield Curve ‘Softening’ Safe-Haven Ccy. • AUD; CAD, & NZD: Rising Commodity Prices Have ‘Positive Demand’ for Commodity CCYs. • EMG CCY: Rising Commodity Prices Have ‘Positive Demand’ for Commodity CCYs. ____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

INTEREST RATES • LONG END • SHORT END • REAL RATES • 2 YEAR RATES

• USD: Ability to attract foreign capital.

• EUR & GBP: Sensitive to % Interest Rates, in particular GBP. • CHF & JPY: Important implications going forward, in particular JPY as “funding currency”.

• AUD; CAD, & NZD: Sensitive to % Rate Changes, including affect on Commodities.

• EMG CCY: % Interest Rate changes and their impact on Global Economy / Affect on Commodities ____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

EQUITY INDICES • RISK ‘ON’ • RISK ‘OFF’

• USD: Underperforms during “Risk-On” Environment.

• EUR & GBP: Benefits from “Risk-On” Environment.

• CHF & JPY: Underperforms during “Risk-On” Environment.

• AUD; CAD, & NZD: Benefits during “Risk-On” Environment.

• EMG CCY: Benefits during “Risk-On” Environment. ____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

‘CURRENT MARKET STATUS’ Lower Commodities Lower Interest Rates Lower Stock Markets

‘Lower Risk’

Currencies to Benefit USD JPY CHF Currencies at Risk AUD EUR GBP ____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

GLOBAL MACRO PORTFOLIO

____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

Market Event

Currencies to Buy

Global Market Support

Higher Inflation

AUD / CAD / GBP / EUR

Long End / Comm.

Lower Inflation

USD / JPY / CHF

Stocks / Comm.

Higher Growth

AUD / CAD / GBP / EUR

Comm./ EMG / Stocks

Lower Growth

USD / JPY / CHF

Short End / Stocks / Comm.

Liquidity Addition

AUD / CAD / GBP / EUR

Comm. / Stocks / 2 Year %

LiquidityWithdrawal

USD / JPY / CHF

Comm. / Stocks / 2 Year %

Credit Event

USD / JPY / CHF

Comm/ Stocks / Bonds

Global Event

USD / JPY / CHF

Comm / Stocks / Bonds

____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

PRICE BEHAVIOUR OF CURRENCIES

____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

Currency Pair

Price Definition

How to Trade

EUR

Corrective

Fade Breaks / Fixed Stops

GBP

Break

Breaks / Book Intraday

JPY

Grind

Trade False Breaks / Trailing Stops

EURGBP

Corrective / Grind

Breaks / Book Intraday

EURJPY

Corrective

Fade Breaks / Book Intraday

CHF

Break / Corrective

Breaks / Book Intraday

AUD

Break

Break / Fixed Stops

CAD

Break

Break / Trailing Stops

____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

EUR/USD • FADE BREAKS Corrective Pullback

• FIXED STOPS

False Break

Corrective Pullback

False Break

• Break Trading Strategy Difficult in the EUR/USD. • Higher Value Trading ‘Corrections’, operating ‘Fixed Stops’.

• Cross Market Activity / Too Many Options / Asian Central Bank Participation & Reserve Managers ____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

GBP/USD • BREAKS • BOOK INTRADAY Sharp Corrections / Book Profits

Sharp Corrections / Book Profits Profitable Break Profitable Breaks Profitable Breaks

• Higher Value Booking Intraday Profits if employing Break Strategy in GBP. • Reserve and Corporate Flows can Affect Rates. ____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

USD/JPY • FALSE BREAKS • TRAILING STOPS

False Breaks Within Trend

False Breaks Within Trend

• Higher Return Margins by Trading False Breaks against the Primary Trend in USDJPY. Employ Trailing Stops.

• Option Protection Key Reason for False Breaks. ____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

KEY DAILY EVENTS

____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

Time

Market Activities

Ccy

7:00 am

Reserve & Central Bank Activity

EUR; AUD; GBP

9:00 am

European Data

EUR; EURGBP; EURJPY.

9:30 am

UK Data

GBP; EURGBP; GBPJPY.

11:00 am

Option & CCY Fixes

EUR; GBP; EURJPY.

12:30 pm

NewYork ‘Stop-Hunting’

EUR; AUD; GBP; EURGBP.

1:30 pm

US Data

US Dollar Index

3:00 pm

New York Option Expirations

EUR; GBP; JPY

4:00 pm

London CCY Fixes

EUR; GBP; EURJPY.

6:00 pm

NewYork ‘Stop-Hunting’

EUR; GBP; JPY; EURGBP; EURJPY; AUD; CAD.

____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

CHARTING ‘THINGS TO WATCH FOR’

____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

TREND LINES ON DAILY CHARTS

False Breaks / Does not confirm Bull Trend – only after event.

Day Trend Line 3

Day Trend Line 2 Day Trend Line 1

• Not a ‘Fan’ of Daily Trend Lines – Be Careful.

• Do Not Be Afraid to Trade Into “Stops” below or above Trend Line Support ____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

FRACTAL LINES ON DAILY CHARTS

Fractal Support Fractal Support Fractal Support

Fractal Support Fractal Support

Fractal Support confirms the underlying trend and offers better entry level signals.

• Stronger Support & Resistance Points versus Daily Trend Lines.

• Indicates Primary Trend – Continuation & Pause. Improved Entry Strategy v Trend Lines ____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

CORRECTIVE TREND LINES: INTRADAY

Corrective Trend Line 1

Better at indicating Market Corrections

Corrective Trend Line 2

• Trend Lines Charting Intraday Corrective Moves – More Value.

• Trend Lines Charing Intraday Corrective Move with Fractals –Very Valuable. ____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

MOMENTUM INDICATORS: BE CAREFULL!

Corrective Trend Line 1

Better at indicating Market Corrections Bad Signal

Corrective Trend Line 2 Bad Signal

Good Signal

• Momentum Indicators can be loss making tool if incorrectly interpreted – especially during strong trends.

• Key to success in reading Momentum Indicators is the “Level of Price Divergence” ____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

PUTTING IT ALL TOGETHER

Corrective Trend Line 1 Day Trading Axis or Trend Line Fractal Resistance

Fractal Resistance

Intraday / 60 Minutes CorrectiveBetter at indicating Trend Line Market Corrections

Corrective Trend Line 2 Fractal Resistance

Fractal Support

____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

MORE INFORMATION

____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar

Market Sector

Website

Subject

Foreign Exchange

www.actionforex.com

FX & Rates

Foreign Exchange

www.bloomberg.com

FX & Rates

Global Macro

www.johnmauldron.com

Global Macro

Foreign Exchange

www.elliottwaveforex.com

Elliot Wave

Global Markets

www.caldaro.worldpress.com

Elliot Wave

Technical Analysis

www.youtube.com

Fractals

____________________________________________________________________________________ Gavan Dunne Delta Index Trading Seminar