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TraderSimon.com www.tradersimon.com 7 Essential Tips To Improve Your Trading 1 TraderSimon - Professional Trading With Institutional Supply & Demand

Risk Disclaimer www.tradersimon.com Trading on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. TraderSimon.com makes no warranties or guarantees in respect of the content of this manual, blog or website. The content herein does not take into account your investment objectives, financial situation or particular needs of any particular person. You should obtain individual financial advice based on your own particular circumstances before making an investment decision on the basis of information in this course. 2 TraderSimon - Professional Trading With Institutional Supply & Demand

Introduction www.tradersimon.com Dear Reader, 3 Congratulations and thank you for signing up for my free mini Ebook! Having traded these markets for over 10 years, I know exactly what works and what doesn’t. When I first started out, I spent thousands of hours burning the midnight oil and studying charts. I turned to the internet and found a sea of misinformation, self proclaimed gurus and outdated advice. It really was like looking for a needle in a haystack! Fortunately, I met some of the best (and most generous) traders in the world and they helped me understand how the market really ticks. I began to understand why so many retail traders struggled and why they blew account after account and eventually gave up. I found out why price moves, how the big money traps the small retail traders and why good risk management is the no.1 rule worshipped by every successful trader. So I’ve done some of the hard work for you and in this guide I’m going to share with you some tips that will greatly improve your trading in a much shorter time than it has taken me! If you take just one of these tips away with you and apply it to your trading, then my job has been worthwhile! Sincerely TraderSimon TraderSimon - Professional Trading With Institutional Supply & Demand

1: Support & Resistance – Some Home Truths www.tradersimon.com I’ll let you into a little secret… traditional textbooks often teach support and resistance wrong! The textbooks will say that: The more a support and resistance level is tested, the stronger it becomes. …when in fact the opposite is true: The more a support or resistance level is tested, the weaker it becomes. When I first started learning to trade, I subscribed to a popular coaching group that held weekly webinars. The incorrect myth (in red above) was repeated by the host in many a webinar. It took me quite a while to realise the opposite was true! Before we get on to why the above is so bad and how you can use support and resistance in a much better way, let’s quickly recap on the basics… 4 TraderSimon - Professional Trading With Institutional Supply & Demand

SupportAnd ResistanceDowntrend So this is a very simple diagrammatic representation of how support and resistance should look… In a downtrend, price will typically move in a range until it breaks through a level. A new range will start and what was previously support will now become resistance. Support www.tradersimon.com becomes resistance New support level is formed becomes resistance 5 TraderSimon - Professional Trading With Institutional Supply & Demand

SupportAnd ResistanceUptrend And in an uptrend, the opposite is true; a resistance level will be broken and price will find support at the new level. So far, all well and good! New resistance becomes support www.tradersimon.com level is formed Resistance becomes support 6 TraderSimon - Professional Trading With Institutional Supply & Demand

Now, back to our original topic of discussion. On this chart we have a resistance level which came into being when the market put in the initial price swing high (1). At (2) the market tests the level again, falls away and confirms this is indeed a resistance level. The 3rd time the market revisits this level (3), it finally breaks through resistance. www.tradersimon.com 7 TraderSimon - Professional Trading With Institutional Supply & Demand

Did you notice some additional important points? 1) The market built pressure to the upside before eventually breaking resistance (as can be seen by the trendline). 2) Also notice that after the market had broken resistance, it came back to support offering a high probability setup. Now ask yourself this… how many times did the market test the opposite side (support) before rocketing up? Correct! Just once – the first touch of a level is the strongest and often very powerful. The next time we come back to this level it will be weaker and the 3rd time it will be weaker still. As more and more orders are consumed at a level, it loses it strength - which all goes to prove the original point of this chapter! www.tradersimon.com 8 TraderSimon - Professional Trading With Institutional Supply & Demand

2: Learn Supply And Demand. www.tradersimon.com If you follow me on Twitter, you’ll know the foundations of my trading method are based on Supply and Demand And I’ve often tweeted live trades in realtime because I’ve traded this method long enough to know that it works! Of course, there’s a lot more to my strategy than just drawing these zones, but with the knowledge I am about to outline here, you’ll see your trading improve in leaps and bounds. Throughout our lives, we are conditioned through education and books to buy investments when the price is high and sell when the price is low. The financial media is extremely guilty of this. Talking heads on CNBC will encourage the public to buy an investment or share when the price is rising, only to see it plummet a few days later. More often than not, retail investors will capitulate and sell their investment at a loss into the hands of the smart money, for a knockdown price. Yet in every other aspect of our lives, we buy when something is a bargain and try and sell it for as high a price as we can get. You wouldn’t buy a television if the price was constantly going up, but you would if it was in the January sales with a 50% discount. So why should this be any different in trading? It shouldn’t, and this is where the professionals differ from the retail crowd. They buy low and sell high. The pro’s buy at wholesale prices and sell at retail. At this point, a transfer of funds takes place from the novices accounts to the pro’s. The point at which this takes place is often a supply or demand zone. A supply or demand zone can only be seen once price speeds away from an area on the chart. It indicates there was professional buying/selling interest at the origin of that move. Once this has happened, our job is not to follow the novice traders and chase the move, but wait for price to return to the zone where we can buy or sell at a “wholesale” price. 9 TraderSimon - Professional Trading With Institutional Supply & Demand

BuyingAt A DemandZone www.tradersimon.com This is a pictorial version of a demand zone. When the market moves very quickly away from a small area of consolidation on a chart, it forms a demand zone. Novice traders experiencing FOMO (Fear Of Missing Out) will see the move and buy too late – usually at the high! Smart money will notice the area of buying interest at the demand zone and wait to buy at a knockdown price. Novice see’s price taking off, buys here. Professional notes buying interest from demand zone Demand Zone Professional has a buy order waiting here. 10 Novice closes position, frustrated that price has fallen. TraderSimon - Professional Trading With Institutional Supply & Demand

SellingAt A Supply Zone Supply zones follow the exact same principal in reverse. Supply Zone Professional has a sell order waiting here. www.tradersimon.com Novice closes position, frustrated that price has risen. Novice see’s price 11 falling, sells here. Professional notes selling interest from supply zone TraderSimon - Professional Trading With Institutional Supply & Demand

DemandZones– EscapingFOMO! In this pictorial representation of a demand zone, price dropped, made a base and rallied away very fast. This indicates there was a lot of buying pressure at the base. Do we get caught up in FOMO and chase the move? No we don’t! Let’s put this another way: Do you think the big traders and banks managed to get ALL their orders filled during this move? I’d say definitely not! There would be a stack of buy orders all waiting to be filled once price retraced back to the demand zone, which is where we too would be looking to buy. Note the drop, base, rally. strong rally www.tradersimon.com drop Buy here Demand zone base 12 TraderSimon - Professional Trading With Institutional Supply & Demand

SupplyZones– Rally,Base, Drop. www.tradersimon.com Supply zones are the same concept in reverse. Price rallied, made a base and the traders couldn’t sell 13 quick enough. When price comes back to that supply zone, you want to be a seller! base Supply zone rally Sell here strong drop TraderSimon - Professional Trading With Institutional Supply & Demand

Demand Zone Example Here’s an example of a demand zone. Note the very fast move away, followed by the market coming back for professional money to get in. www.tradersimon.com 14 TraderSimon - Professional Trading With Institutional Supply & Demand

Supply Zone Example And here’s an example of a supply zone. Again, the market moved very quickly away from the base, forming a nice supply zone. A return to the zone is your opportunity to sell! www.tradersimon.com 15 TraderSimon - Professional Trading With Institutional Supply & Demand

3: Ditch those technical indicators. I’m not completely against technical indicators, but I think the majority of new traders would benefit a lot by removing indicators from their charts and using pure price action instead. The reason being that most technical indicators lag the market. After all, they are only a mathematical calculation based on the price (volume based indicators excepted). Let’s have a look why technical indicators will often lead new traders down the “rabbit hole”… www.tradersimon.com 16 TraderSimon - Professional Trading With Institutional Supply & Demand

“Can’t seethe woodfor the trees” Yes, that famous phrase is applicable here! Some charts have so many indicators, it’s impossible to see the actual PRICE. There’s a whole barrage of conflicting indicators here. In fact, if you were waiting for everything to align (including the stars and planets), the chances are you’d NEVER get into a trade! This chart would benefit from removing everything and adding some simple support and resistance levels. www.tradersimon.com 17 TraderSimon - Professional Trading With Institutional Supply & Demand

“I Can See Clearly Now” So here’s that chart again, this time with all indicators removed. I think you’ll agree it’s a lot clearer! I’ve added some key support and resistance areas in blue and supply and demand zones in yellow. Just to show that not everything works all the time, the zone in red is one that failed. However, the advanced section of my Udemy course will show you how it’s possible to turn failed zones to your advantage. www.tradersimon.com 18 TraderSimon - Professional Trading With Institutional Supply & Demand

The FallaciesOf MovingAverageCrossovers www.tradersimon.com This is just one example of a very widely used indicator strategy that simply doesn’t work. 19 This moving average crossover strategy is documented many times in textbooks and it’s very popular with financial news media whenever it occurs. The basic strategy is this: • You Sell when the 50 day Moving Average crosses down below the 200 day Moving Average. This is know as the “Death Cross”. • You Buy when the 50 day moving average crosses up above the 200 MA. This is known as the “Golden Cross”. The main problem with this strategy is it’s a reactive rather than predictive way of trading. The method assumes that momentum will continue after a moving average crossover with no thought as to the current conditions of the market. TraderSimon - Professional Trading With Institutional Supply & Demand

The FallaciesOf MovingAverageCrossovers– Chart 1 On this GBP/USD chart, I’ve plotted the 200 and 50 day Moving Averages. The yellow dots indicate where the crossovers actually occurred. These crossovers are where you would buy or sell according to the strategy. Now let’s move to the next chart… www.tradersimon.com 20 TraderSimon - Professional Trading With Institutional Supply & Demand

The FallaciesOf MovingAverageCrossovers– Chart 2 When we add vertical yellow lines, we can see where the crossovers would have got us into a trade. In most cases, the strategy got us into the trade at the worst possible time, after the move had almost completed! www.tradersimon.com 21 TraderSimon - Professional Trading With Institutional Supply & Demand

The FallaciesOf MovingAverageCrossovers– Chart 3 Now let’s see what happens when we add supply and demand zones to the chart and ignore the indicators. Right away, you can see that the zones are getting us into the market at the turning points, rather than too late as with the moving average crossover strategy. www.tradersimon.com 22 TraderSimon - Professional Trading With Institutional Supply & Demand

The FallaciesOf MovingAverageCrossovers– Free VideoExplainer If you would like to watch a FREE video explaining this tip in more detail, simply visit my course on Udemy.com: https://www.udemy.com/professional-trading-with-institutional-supply-demand Select “Preview This Course” and watch the 5th video in the preview – no purchase required! You’ll also receive an exclusive 15% discount (for newsletter subscribers only) if you do go ahead and purchase the course. Right! let’s move on to the next tip… www.tradersimon.com 23 TraderSimon - Professional Trading With Institutional Supply & Demand

4: Don’t Trade Out Of Boredom. www.tradersimon.com There’s nothing worse than sitting in front of your screen for hours on end waiting for something to happen. There are times when the market can do nothing for hours and it’s at these times that trader’s worst bad habits kick in, such as: • Taking spontaneous trades that weren’t planned. • Taking FOMO (Fear Of Missing Out) trades if the market suddenly does move very quickly. This usually ends badly with the trader regretting getting in at the worst possible price and closing at a loss. • Constantly changing your mind about trades that weren’t planned and opening and closing many trades in one session as a result. This not only incurs multiple losses, but accumulates broker fees too - I call this “death by a thousand cuts”. • Watching individual candle bars draw and letting these influence your trading decision (either to exit or enter a trade). • Even worse, all of the above leads to low confidence and mental exhaustion, which means you’re more likely to miss the trades that you should have taken. “Ok Simon, so that sounds like me, but how do I defeat this?” … 24 Designed by macrovector / Freepik TraderSimon - Professional Trading With Institutional Supply & Demand

AlwaysHave a TradingPlan. www.tradersimon.com It sounds obvious, but you’d be surprised how many traders go into the week without any form of trading plan. 25 Produce a trading plan over the weekend when the markets are closed and you are free from distraction. I can’t overstate how important this is! Work your way down through the timeframes from Weekly to Daily, 4 hour, 1 hour and 15 minute. Have a higher timeframe BIAS for each asset you intend to trade and mark key LEVELS you intend to trade at. Write down any reasons why your bias may change during the course of the week. Note down all the important events on the financial calendar and be aware of when key news may move the market. Now, when you enter the new trading week, only take trades in the direction of your bias. Don’t be tempted to change your bias unless one of your pre-determined reasons for changing that bias comes into play. Wait for the market to come to your levels. Sit on your hands until it does. Better still, put in some “set and forget” orders and go and do something more useful. TraderSimon - Professional Trading With Institutional Supply & Demand

AlwaysBe Aware Of The Best TimesTo Trade. www.tradersimon.com If you’re trading a currency such as the EUR/USD, there’s often no point in putting a trade on during the Asian 26 session (after New York has closed). The chances are your trade will sit there for 8 hours until London opens.. Instead, why not wait for London to open? Chances are (as is often the case), London will “run the stops” from the Asian session anyway, providing you with a better and safer entry. Generally New York provides the steer for the equity markets, so entering an equity index trade during London may involve sitting through long and painful chop. Instead, wait until New York opens at 9:30 EST and you will often get a better entry and a less painful wait. Mondays (especially Monday mornings) tend to be as dull as dishwater, especially if there’s no financial news on the slate. Most times it’s best to skip Monday mornings and wait for New York to open. You’ll thank me when you look back and realise absolutely nothing happened in that session and you avoided getting chopped in a range! Finally, if you’ve had a great trading week and are firmly in the green, try not to establish new positions on a Friday afternoon. The worst way to start a weekend is nursing a bad trade that you wish you could close at breakeven, when you could have been down the pub enjoying your profits! TraderSimon - Professional Trading With Institutional Supply & Demand

5: The markets are 100% manipulated. You enter what you thought was the perfect trade. Your stoploss is in a sensible place. The market guns for your stop like a heat seeking missile finding it’s target. To make matters worse, the market then proceeds to your intended target WITHOUT YOU. We’ve all experienced this before - It’s frustrating! But what if I told you the market does this by design. Traders often place their stoplosses above or a below a price swing. The smart money knows this and will use the liquidity of those stoploss orders to fill their own positions. www.tradersimon.com 27 TraderSimon - Professional Trading With Institutional Supply & Demand

Let’s take a look at that chart again, this time with our traders glasses on. There is something thing very wrong with selling at the 2nd swing high as per the previous chart. If you look at that level, there are two swing highs at almost exactly the same level. The first high was not penetrated by the second high, leaving even more stoplosses in place. Traders who sold at the first or second swing high will place their stoplosses just above. The banks and institutions know this. After all, they engineered the perfectly matched swing highs in the first place! When the banks are ready, they will spike the price above the highs, triggering the stops (buy orders) and providing liquidity to sell into. There’s a lot more to discuss about stop hunts and specific ways to trade them. But be aware this market phenomena exists and happens all day, every day. www.tradersimon.com 28 TraderSimon - Professional Trading With Institutional Supply & Demand

6: Use compounding to grow an account. www.tradersimon.com I often see claims on Twitter of huge account gains in a small amount of time. In reality, most of these highly leveraged accounts will blow up over a period of time. There is a better way however… Instead of trying to make unrealistic gains on a small account, aim to make small regular gains and use the magic of compounding to grow an account. Let’s say you risk 1% of your account balance per trade and your account on average is making 1.25% per week including all wins and losses. That’s an easy target to aim for. Now, as your account grows, the $ amount you risk will grow too, but it will always be 1% of your account. Through the magic of compounding, i.e. re-investing your profits, you could almost double an account within a year. Let’s take a look at the figures on the next page… 29 TraderSimon - Professional Trading With Institutional Supply & Demand

Compounding Example In this spreadsheet, assuming a starting balance of $10,000, risk per trade of 1% and an average return per week of 1.25%, the account will grow to $19,078.39 in one year. Bear in mind, although the return per week is quite small, I have deliberately used this figure to allow for losing weeks. www.tradersimon.com 30 TraderSimon - Professional Trading With Institutional Supply & Demand

7: Risk Management & Psychology www.tradersimon.com It’s tempting to skip any chapter in a book that isn’t to do with trading strategy, but if you’re one of those people 31 who’s eyes glaze over at the very mention of Risk Management, then this chapter is probably for you! It’s a sad fact that 90-95% of traders eventually fail. The reason most traders fail is not due to the system they are trading, but how they approach and manage risk. You cannot win every trade and because of this, most traders will abandon their less than 100% perfect trading system and continue looking for the elusive Holy Grail, otherwise known as “system hopping”. Trading is a gambling business, but in our case with a “house edge”. We take our winners and losers without emotion and at the end of the day, week or month it adds up to a profit. If you can manage only a 60% win/loss ratio and aim for risk/reward of 1:2, you will make money. Another huge part of trading is psychology. Emotions will play a big part in your trading. You will find yourself subjected to fear, greed, elation and desperation. These emotions will influence your trading in negative ways. As you know, losses are a part of trading. After a loss, a trader will either be desperate to make the money back or fear taking another trade in case they lose again. Another problem facing traders is letting losses run in the vain hope the trade will recover and taking small profits off the table because of fear the trade will go back to zero profit. This brings me on to discipline. Without discipline, patience and a firm trading plan, you will take pot shots at the market, opening and closing trades, just like the spin of a slot machine, gradually eroding your account. My advice is don’t do it! TraderSimon - Professional Trading With Institutional Supply & Demand

Risk Management www.tradersimon.com It has been said that trading is 90% risk management. One thing’s for sure, it is the difference between success and 32 failure in this business. Accepting risk means accepting the consequences of a trade or a string of trades without emotional discomfort or fear. This means you have to let a trade setup play out without your mental defence mechanisms kicking in and causing you to close the trade prematurely. In order to do this, you need to manage your risk in such a way that a losing trade or string of losing trades (which is inevitable at some point) will not put your account in an irrecoverable position. So where do you start with applying good risk management principles to your trading account? Firstly, never risk more than 1 or 2% of your trading account at any one time in the market. The internet is littered with stories of traders who have blown their accounts time and time again because they broke this golden rule. No matter how certain a trade setup appears, remember the John Maynard Keynes quote; “the market can stay irrational far longer than you can remain solvent”. Just imagine that you started trading with £10,000 and lost 50% of that equity. It now takes a 100% gain or a £5000 profit to bring you back to breakeven again. A loss of 75% of your account would require a 400% return to get back to breakeven. The best way to avoid this fate is to risk only 2% of your account. With this level of risk, 10 losing trades in a row would only sustain a 20% loss. Not a pleasant position to be in, but the important thing is it is recoverable. TraderSimon - Professional Trading With Institutional Supply & Demand

A good trader will always keep losses small and aim for bigger winners. This brings us on to risk/reward. Risk/reward is one of the aspects of the market that we as traders can control. It is the ratio of expected profit that we hope to make in relation to our risk as determined by our stoploss. For instance, if the most we can expect to lose from a trade is £100, but the potential profit is £200, the risk/reward is 1:2. By keeping trades to a risk/reward ratio of 1:2 or higher and passing on the trades that offer lower reward, we can afford to lose 50% of trades and still make a profit. A classic example of risk/reward is the coin flip exercise. Toss a Heads/Tails Profit/Loss Total Profit www.tradersimon.com coin 100 times representing each trade you will take. If the coin Tails -100 -100 lands on heads you win £200, if the coin lands on tails you lose Heads 200 100 £100, representing our 1:2 risk/reward. Add up your profit and Tails -100 0 loss for each trade. Tails -100 -100 Tails -100 -200 The third factor in the equation is win/loss ratio, or the number Heads 200 0 of winners to losers that we can expect, given our trading Heads 200 200 system’s “edge”. Your win ratio will depend on your skill, Tails -100 100 experience and trading strategy. Heads 200 300 Finally, It is the combination of the three factors above that will ….. ….. ….. determine whether you make or lose money in this market; controlling account risk, looking for good risk/reward in your trade setups and choosing a strategy with a good edge. 33 TraderSimon - Professional Trading With Institutional Supply & Demand

Further Study I enjoyed writing this guide and I hope you’ve enjoyed it too! I’m sure it’s switched on a few lightbulbs for you! The exciting news is we’ve only just scratched the surface in terms of trading strategy. There’s a LOT more to share with you in my Udemy course to take your trading to the next level. www.tradersimon.com As a special offer to readers of this guide, for a limited period only, you’ll receive a 15% discount off the regular 34 price of my course via this link: https://www.udemy.com/course/professional-trading-with-institutional-supply- demand/?couponCode=15_PDF_APR_2020 or use the coupon code: 15_PDF_MAR_2020 On the next page, you’ll find genuine verified reviews from students of my course on the Udemy website. I’m absolutely thrilled when my work makes such a difference to my students’ trading! TraderSimon - Professional Trading With Institutional Supply & Demand

Reviews Just some of the reviews from hundreds of delighted students… www.tradersimon.com 35 TraderSimon - Professional Trading With Institutional Supply & Demand

More Reviews… View them all on Udemy.com www.tradersimon.com 36 TraderSimon - Professional Trading With Institutional Supply & Demand

Visit my YouTube channel for course previews and live trade examples… Understanding Market Manipulation The Fallacies Of Technical Indicators www.tradersimon.com 37 Trade review with example trades TraderSimon - Professional Trading With Institutional Supply & Demand

Find out more… www.tradersimon.com Twitter: @TraderSimon 38 Website: www.tradersimon.com Members: members.tradersimon.com Email: [email protected] YouTube: https://www.youtube.com/user/tradersimonlondon LinkedIn: https://www.linkedin.com/in/simonkloot/ Udemy: https://www.udemy.com/course/professional-trading-with-institutional-supply- demand/?couponCode=15_PDF_APR_2020 TraderSimon - Professional Trading With Institutional Supply & Demand