6strategies Forex PDF
6strategies Forex PDF
6strategies Forex PDF
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How to Get the Most Out of This Book
Thank you for downloading 6 Simple Strategies for Trading Forex. This book is designed for
beginning, intermediate and advanced traders. The presenters in this book are leading experts
in trading the Forex market. As a bonus, you will also be exposed to a chapter on Trading
Psychology and how to trade Forex pairs on the Nadex exchange.
As you read this book, you will be exposed to multiple strategies that have high probabilities of
success and/or high profit. Many of these strategies were selected by pouring over webinars
that have been hosted by TradingPub in the recent past. Each webinar was transcribed into a
game plan for executing the strategy. Most of the strategies in this book is divided into three
sections:
The Movie
Once you have read the chapter, you can view the complete webinar on the strategy. You will
gain a better understanding of the strategy along with multiple examples not covered in the
chapter. In some cases, the presenter switches in to live trading to demonstrate the strategy in
action. In many of the webinars, the presenter also fields questions from attendees.
Special Offers
If you really like a strategy, you can follow the presenter and the strategy. There are thou-
sands of dollars worth of trading tools, indicators, training and mentoring services, books and
videos available at steeply discounted prices.
In short, you will have all of the information you need to trade your new favorite
strategy tomorrow. Some of the things you will learn in this book are:
How a simple strategy can help you spot trend continuation and reversals
How banks balance their currency portfolios and how you can profit from his.
At TradingPub, it is our sincere hope that you take away several strategies that you can use
when you are done reading this book. You will also learn about markets that you currently dont
trade, and you will find out if they are suited to your trading personality.
Finally, make sure to subscribe to TradingPub. We provide free ebooks, webinars, on-demand
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Table of Contents
MASTERING YOUR INNER GAME 7-22
By Rande Howell, Med, LPC Traders State of Mind
As a trader, do you ever wonder why you cant achieve the results that you want to
achieve? Do you find yourself constantly making the same mistakes? Are you controlled
by your emotions? These are mistakes that all traders make, but the successful traders
have learned how to manage their inner game. In this section, we are going to learn how
to overcome the eight road blocks to successful trading.
To get started, lets first look at the components that make up a successful trade:
Lets face it, most traders early on are looking for the magical secret, or the Holy Grail
of successful trading. They chase the best charting software, newest indicators, data and
news services, mentoring programs, you name it. What they are looking for is the magic
solution to trading, when they dont recognize that they themselves are the problem.
There is no magical Holy Grail for trading success out there. The secret to trading
success lies within yourself, just waiting to be discovered. Remember this adage:
80 percent of trading is in your head.
What separates the elite golfers from the rest of the field? They all have the best equipment
in the industry. They have spent countless hours practicing and perfecting their craft. They
know how to drive, chip and putt. So what separates the elite golfers from the rest of the
crowd? They know how to do it in the clutch, when the money is on the line. This lesson
is about learning how to develop the mindset of a peak performance trader to separate
yourself from the sea of traders who are inconsistent and bleed out their accounts.
Since the beginning of time, our brains have been trained to see uncertainty and fear as
one in the same thing. How many times have you had your finger on the trigger, but you
just couldnt bring yourself to execute the trade? How many times have you bailed out
early on a trade, only to watch it run in the direction you thought it would? That is your
brain perceiving psychological discomfort as a biological threat. Unless you can untangle
that association, and re-train your mind, you are likely to repeat these behaviors over
and over again.
The markets dont care about you. You can trade them as long as you have capital, but
sooner or later, usually after drawing down your accounts, you come to the realization
that you need to work on yourself if you are going to be successful at trading.
2.- Feeling
This is where the biological chemistry creates a subjective experience of the emotion. If
cortisol is pulsing through your body, it can produce a sense of fear. If testosterone levels
become elevated, it produces a sense of grandeur. Both of these responses can lead to
costly trading mistakes. You can be afraid to pull the trigger on a trade, exit a trade early
or double-down on a risky trade.
3.- Motivation
Once the chemistry is released into your system, your body will usually pointed into a
fight or flight response. You perceive a threat, and you are either going to attack it or
avoid it. If you hesitate on a trade, you are in avoidance. If you revenge-trade after a
losing trade, you are in attack mode. Its important to have a trained mind to regulate
these responses to a perceived threat. Developing a curious mind allows you to act with
patience and discipline, keeping your long-term interests in mind.
4.- Meaning
These are the beliefs you have developed to manage uncertainty. We need to rationalize
our behaviors so they make sense to us.
5.- Temperament
Quite simply, this is genetics. How is your body genetically predisposed to handling
emotion?
Understanding that we are emotional creatures, the first task in re-training your mind is
to separate uncertainty, worry and fear.
Uncertainty
You cant control the markets. The markets do what they want to do. Nothing can be
predicted with absolute certainty, only varying degrees of probability. We have been
trained as we grew up not to make mistakes. We have conditioned ourselves and our
brains are biased to predict with certainty.
Worry
If you feel that you cant control the outcome of a trade, then worry sets in. Your brain
starts to project into the future and its seeing bad things on the horizon. So your brain
becomes a negative assessment machine, and you continually traumatize yourself by
worrying.
Fear
Fear is wear all thought becomes hijacked, and you panic or freeze.
Which one of these fears drives your trading? If youre honest with yourself,
you may have experienced most or all of these fears at some point in your trading
There comes a time when you start noticing your thoughts, and you start thinking
Where are these thoughts coming from? Pink Floyd had a lyric Theres someone in
my head, but its not me. So who is this person in your head? Our thoughts and our
beliefs are not us, we are separate from them. Knowing that, you can step outside of
yourself and question your thoughts and beliefs. You can use powers of observation
and curiosity, and dissect the voices in your head that are governing your trading
decisions.
Observation is a strong mindfulness tool. Once you observe your fear-based emotions,
confront them and question them, then you can start becoming mindful. If you ignore
the voices and patterns you have developed in your head, then a perfectly good
trading plan can become wasted. Since you cant escape your internal dialog, you
must learn to manage the fear-based aspect of it. Once you do that, you can develop
the foundation of a strong psychological trading plan. You learn to become the author
4.-Powerlessness
Nothing I do seems to make a difference. Victimhood.
This fear-based thinking shows up in our minds as thoughts, and our avoidance of them
is what keeps us fused to them.
You are born into self-limiting beliefs, but thats no reason to stay stuck in them. Its
important to identify and be aware our fears and self-limiting beliefs before we can
become mindful.
If the members at the Trading Committee Table of Your Mind are fear-based, self-
limiting beliefs, then you are doomed to repeat the same trading mistakes over and
over again. What you need to do is clean house and invite some new guests to the
table.
Changing self-limiting beliefs requires recognizing what they are, and addressing them
for long-term re-organization of self. Compassion is the emotion that reorganizes the
self for internal validation rather than external validation. Think about this for a minute
whenever you beat yourself up after making a mistake, does it every really do you
any good? No it doesnt. All it does is continue to feed self-limiting beliefs of inadequacy
or powerlessness. Re-building the Committee of the Mind will help you create a new
playing field for trading.
4.Self-Compassion of a Caregiver
Recognizing you are valuable and important
From time to time, each of these programs has been called into service, and you
can remember instances when you faced a challenge head-on, showed extraordinary
discipline, exercised impartiality and demonstrated compassion. These traits are inside
you, and they need to be called to the surface. They are your friends in the trading
world.
Stage 2. Next you disrupt the self-limiting beliefs that have been developed without
your knowledge
Stage 3. Now you can engage the Warrior, the Ruler, the Caregiver and the Sage
Stage 4. When you can trigger the emotions of courage, discipline, compassion,
patience and impartiality, then you have re-organized the trading mind
Stage 5. You are developing a calmer mind that thinks and processes information,
rather than knee-jerking to perceived threats. With an empowered mindset, you
approach uncertainty from a position of Discipline, Courage, Patience and Impartiality
rather than fear.
Successful trading requires a good trading platform, a good methodology and a traders
state of mind. You need to recognize and identify your fears, and the self-limiting belief
systems you have patterned based on fear. Find out who is sitting at the table in
Trading Committee of You Mind, and replace the fear-based members with members
that represent Discipline, Courage, Patience and Impartiality. When you get to this
place, your trading account will look much better.
Randes work teaches you how to change the way you understand and work with your biology;
which allows you to succeed in regulating your emotions and breaking out of life-limiting patterns
(really important in trading success). His emotional regulation training has been used to treat
violent prisoners, break the cycle of domestic violence, and free people from the limitations of
fearful thinking.
His belief is that, until you understand the power of your biology and how to manage it, you
will be overwhelmed by it. Momentary success will be sucked down the drain of the pattern-
making machinery of your brain. To break free of old limiting patterns, you must reorganize
the brain -- not the mind.
The mind follows the brain. What does this look like? Go to any standard motivational seminar
and feel the emotion -- it feels like you can change the world and it will last forever. Then
where are you 4 weeks later (or less) -- back to the same old place.
His work with traders began when one came to him seeking improvement in his trading
performances. Applying his emotional regulation and peak performance training to the traders
lack of performance produced a dramatic impact on the traders fortunes. More traders showed
up seeking training due to this success.
Hello traders!
Welcome to this mini Forex Foundation course, your roadmap to trading the
Forex Markets. My name is Jody Samuels and my trading career began on
Wall Street in the early 80s. Today I run fxtradersedge.com, a comprehensive
program that offers courses and numerous coaching and trading services.
Trading Pub asked me to explain what makes Forex a great market to trade so I
thought I would start with some basic terminology and history, to show you how
the market has evolved as one of the fastest growing markets to trade. I will
then switch gears completely and talk about a strategy which is very easy for a
new Forex trader to grasp. (It is even good for advanced traders!) The strategy
is called the 123 continuation and reversal pattern and we will show how to use
it during trend and end of trend cycles.
What is Forex?
Foreign Exchange Trading is known as Forex, or by the acronym FX.
Today we are going to talk about the transactions of the foreign exchange market
known as the spot market. This market involves a worldwide electronic network of
banks, brokers and other financial intermediaries.
Currencies used to only be traded in specific Lot or Unit sizes. If the unit is USD, a standard
lot is $100,000. A Mini lot is $10,000. And a Micro lot is $1,000. Today brokers allow traders
to vary the Unit size without sticking to the standard Lot sizes. If you are wondering how a
small investor can trade $100,000 without depositing that amount of money, its because
of Leverage. The broker where you set up your trading account will require margin to trade
$100,000. That margin will vary according to the leverage the broker is willing to offer. At
50:1 leverage, the amount required to trade $100,000 is $2,000. The broker lends you the
rest. Of course, any losses or gains on the position will be added to or deducted from the
balance in the account.
However, foreign exchange transactions existed a long time before that. Lets learn a little
history together.
Between 1876 and 1931 currencies gained a new phase of stability because they were
supported by the price of gold. The Gold Standard replaced the age-old practice in which
kings and rulers arbitrarily devalued money and triggered inflation. The Gold Standard was
a commitment by participating countries to fix the prices of their domestic currencies in
terms of a specified amount of gold. The Gold Standard prevailed until WWI, was reinstated
in1925, and broke down again in 1931 following Britains departure in the face of massive
gold and capital outflows.
Beginning in 1944, countries operated under the Bretton Woods Accord. A total of 44
countries met in New Hampshire to design a new economic order. The Bretton Woods
Conference of 1944 established an international fixed exchange rate regime in which
currencies were pegged to the United States dollar, which was based on the gold standard
at a fixed value of $35 per ounce.
However, heavy American spending on the Vietnam War led to persistent U.S. balance-of-
payments deficits and steadily reduced gold reserves. Finally, on August 15, 1971, President
Nixon announced the suspension of converting dollars into gold, unilaterally devaluing the
U.S. dollar and effectively ending the Bretton Woods Accord.
After the Bretton Woods Accord, the Smithsonian Agreement was signed in December of
1971. This agreement was similar to the Bretton Woods Accord, but it allowed for a greater
fluctuation for foreign currencies. The US trade deficit continued to grow, however, and the
US dollar needed to be devalued beyond the parameters established by the Smithsonian
Agreement and this resulted in its collapse in 1973.
Finally, the first on-line trade happened in 1997 which marked the beginning of the retail
Corporations in their daily, monthly and yearly foreign exchange transactions deal with the
banks. The Central Banks are also key players managing their currency exposures and
dealing with investment banks. Hedge funds manage a variety of asset classes, including
currencies, and they transact with Banks.
Finally, we have eRetail, dealing electronically through trading platforms of retail Forex
Brokers. When you take your first currency trade, you too will become part of this Be
RICHeR Network! Welcome.
In the Forex market, there is a Universe of Currency pairs to trade which include the USD
pairs and the Crosses. On the majority of Forex trading platforms, one can trade CFDs
as well as currencies. A CFD, or contract for difference, is a product whose price is based
on the underlying instrument and is considered an over-the-counter (OTC) product, which
is not traded on any exchange. CFDs include stock indices, metals and energy products.
For most brokers, the lists of offered instruments continues to grow. Now, Forex trading
platforms are beginning to add CFDs on stocks and ETFs as well. As retail traders, we
have the ability to trade all of these instruments on Forex trading platforms. The number of
markets quoted will vary from broker to broker.
The 123 top and bottom pattern is a very powerful pattern that signals a trend reversal. It
can also be used as a trend continuation, which will be described shortly. First, the reversal
pattern.
Scenario 1: In an uptrend, the market hits a new high, labelled point 1. Price then pulls back
to a short-term support level, labelled point 2. Finally, price moves up to an area between
points 1 and 2, labelled point 3. It then reverses down again and begins a trend in the new
direction.
Trade Entry: The pattern is complete when the price trades below point 2. At a 123 top, the
strategy is to sell on a break of point 2. The measuring objective is the distance between
point 2 and point 3 projected below the break at point 2. The stop loss is set just above
point 3 but a more conservative stop loss is above the start of this move, at point 1. This is
a choice that the trader must make and only by trading it over and over again will the trader
feel comfortable with the choice of a stop loss.
Observations:
I like to see point 3 retrace at least 50% of the move down from point 1 to point 2. I also
learned that if the pattern has between 10 and 20 bars between points 1 and 3, it is more
likely to succeed. What I have to say about that is back test and see for yourself. I take
most of my trades based on this pattern alone. It is very powerful. You can also use this
pattern on a smaller time frame once the market reversal is identified. You will get a closer
entry to point 1 and will therefore be able to take a larger position, using the same money
management rules.
2. Stop losses for 123 tops should be set above point 1 initially, and positions need
to be sized accordingly so as not to exceed the risk limit for the trade. Another option is to
place stops above point 3. However, the odds are increased of being stopped out early. It
is better to take a smaller position and leave the stop above point 1. Stop losses for 123
bottoms are set below point 1, or alternatively, below point 3.
3. Optional: On a 123 reversal using any time frame, wait one or two candles for
confirmation. Ideally price will come back and retest the breakout or breakdown point for a
safer entry. This helps to avoid whipsaw.
At this point in the video we look at more 123 reversal examples using market data.
How do you get into the trend in the middle of it? The safest trades you can make are the
ones where you are trading in the direction of the current trend. In other words, if the trend
is up, you should be long and if the trend is down, you should be short. If you miss the
start of the trend, you still need a method to enter a confirmed trend during its progress. I
am going to suggest two entry methods using the 123 pattern for trend continuation called
internal 123s.
Method 2
Draw your 123 points.
Enter at point 3 (once price turns down)
with a stop above the new point 1.
2. In a trend, the first 123 pattern is the reversal pattern that occurs at market tops
and bottoms. The second and third set of internal 123s continue to confirm the uptrend or
downtrend.
3. Take note how each point 3 becomes the new point 1 for the next internal 123
pattern. In a very strong trend, point 3 will not always retrace to at least the 50% mark, and
thats ok. It is more important for that to occur with reversal 123s. In a strong trend, the
retracements can be as shallow as 23.6% or 38.2%.
4. If you miss the initial reversal 123 pattern, look to get into the subsequent internal
123s. Preferred entry is on the break of point 2. However, alternatively, you may enter at
point 3. And, wait for the candles to start trending again before entering.
5. Profit taking is recommended along the way for day traders. Position and swing
traders may hold the positions and trail the stop every time we trigger a new trade. The stop
would then be placed above the new point 1, and previous stops would be moved to the
new point 1. These positions would be considered add-ons for position and swing traders.
At this point in the video we look at additional 123 continuation examples using market
data.
CONCLUSION
The Forex markets offer an opportunity to trade various currency pairs and CFDs as well.
Once a trader understands that all of the markets are related in some way currencies,
commodities and stocks and that correlations exist between certain markets, the
excitement comes in understanding these relationships in order to confirm market moves
day in and day out. Learn the fundamentals, scan the markets for the best markets to trade,
and select a simple strategy such as the 123 Strategy to stay with the trend, or find the end
of the trend for a market
reversal.
Allow me to be blunt... because you wont achieve trading success if you arent willing to
call a spade a spade.
With that said, the report you have in your hands is not like the majority of the Forex fluff or
hype youll find on the Internet.
When you apply this information, youll get more value out of this free report than you have
probably gotten out of many of the books, products and courses youve actually paid for.
Whats more, when you follow the simple strategy inside youll be well on your way to
making consistent Forex profits and winning as many as 7 out of 10 trades you place.
Section 1: Forex Basics Whether you are new to Forex trading or have some experience
under your belt, this section helps lay a solid foundation.
Section 2: The Continuation Method This trading strategy has been one of my closely
guarded secrets until now. Read and re-read this section and then put the strategy to the
test.
Section 3: Three-Step Quick Start Checklist Follow these simple steps to implement
this strategy, whether you paper trade at first or youre ready to put real money on the line.
Section 4: Forex Lingo This is a glossary of some important Forex-related words and
phrases.. Bone up on these as you begin and/or advance your trading journey.
On the simplest level, Forex is the market in which currencies are traded.
When you trade the Forex you are essentially buying and selling money.
The currency market used to only be the playground of central banks, large institutional
banks, hedge funds, and international companies with a lot of money. This all began to
change in the early 2000s due to the widespread access to the Internet.
Now the average investor can gain access to this incredibly exciting market 24 hours a day
5 days a week. All you need is a computer and Internet access.
If youve ever traveled to another country and you exchanged your home currency for that
of the place you were visiting then youve already participated in the Forex market.
For example, to trade $100,000 worth of currency with a broker that requires 2% margin,
you would only need $2,000 deposited into your account giving you leverage of 50:1.
When you place a position to buy a currency 9 times out of 10 you are going to get your
position filled at that exact price.
Also, unlike the stock market, there is no central market location. Trades are conducted
through a lot of individual dealers or financial centers.
2. Fewer Rules: Unlike the trading of stocks, futures or options, currency trading does not
take place on an exchange with rules like the NYSE or CME. In fact, if you had exclusive
information, and it was used to make a lot of money, legal issues would not arise, like they
would in the stock market. In other words there are no insider trading rules in the Forex.
4. 24 Hour-Market: The Forex market is a 24 hour market which means that you can
trade when best suits you. If you are a night owl you can trade at 3 AM if you want to.
5. Less Market Manipulation: Because the Forex market is so large there is less market
manipulation, with the only real manipulation coming from the Central Banks. This kind of
manipulation is actually good because it creates large trends in the market.
6. Buy and Sell With Ease: Unlike the stock market there is no uptick rule in Forex. This
means that you can sell just as easily as you can buy. In other words you can make just
as much if not more money by shorting a currency as you can by buying it.
7. Tax Benefits: When you trade Forex, 60% of your gains are taxed as capital gains
and the remaining 40% is taxed at your regular income tax rate. I am not a tax specialist
so make sure to consult your tax preparer to confirm that this will work for your situation.
8. Historically A Trending Market: There has been no shortage of trends in the Global
Currency Market since the end of the Nixon era gold standard. Trends are where the
money is made and the Forex market usually has at least 2-3 big trends every year.
9. Technical Traders Dream: Technical analysis tends to work very well for currency
trading. This allows short-term traders to pull quick and precise profits from the market
and long-term trend followers to profit along the way of the big trends.
10. Low Barrier of Entry: Unlike other markets such as the stock and futures market, the
Forex market doesnt require much capital to start with. There are some brokers that will
allow you to trade with as little as $250. The beauty is that you can add to your account
regularly and use the power of compounding to grow your wealth over time.
Essentially you are betting that the value of one countries currency will go up or down rela-
tive to the value of another countries currency. Since currencies are traded in pairs, when
you buy one currency you are simultaneously selling the other currency.
Lets take a look at an example of how you can make money from a Forex transaction:
Lets suppose that you have $900 U.S. dollars and you exchange that for $1,000 Australian
dollars. One week later, the AUD/USD exchange rate goes up from 0.90 to 1.0/
In this example, the Australian dollar has increased in value to the U.S. dollar. You could
then exchange back the $1,000 AUD back to U.S. dollars and you would have received a
$100 profit. Essentially, you started with $900 and you now have $1,000.
If the AUD had decreased in value to the USD you would have lost money on the transac-
tion instead of making a profit.
You can also look at the process of buying currencies as buying shares in a country in that
you are betting on the success or failure of a particular countrys economy.
Forex trading, like any form of trading, is not without risk. Some may even suggest that
trading in the Forex market actually carries above-average risk. There are two reasons for
this:
2. Leverage Leverage (margin trading) can be a double-edged sword. When the new
trader starts trading with leverage there will often notice right away that the dollars in their
account generally stretch a lot farther. This can lead to two things:
Trading with margin is no different than trading without it as long as you respect it and use
it wisely. Ill teach you how to do this using proper money management techniques.
The Continuation Method is a trend following technique that works across all markets.
Using this method gives you good odds of winning from 50-70% of the time and even up to
80%.
Trend following is a scientific and mechanical way to approach trading that removes most
of the guesswork. It has a strong history of performance during crisis periods and is at the
core of most of my trading methods.
The idea behind the Continuation Method is to wait for a setback in the market and then
jump in the direction of the trend. We are using only technical analysis meaning that we are
going to be looking at price charts for different currency pairs to make our decisions.
You can trade this method based on long-term or medium-term trends (this means that it
doesnt have to take a lot of time).
We will use this in combination with a simple trend finding technique to determine the best
possible entry during a correction in the trend.
3. The 5 Simple Moving Average The Simple Moving Average is the unweighted mean
of the previous N data. We will use this as a way to exit the market and trail our stop loss to
protect profits.
4. These indicators can be found in most charting software programs. - Our pre-
ferred software for trading currencies is Meta Trader 4, which is free or Ninja Trader, which
has a small monthly cost for the data feed but gives you a larger range of instruments to
trade.
Below you will find screenshots for each indicators parameters inside of the MT4 platform.
Williams % R
For a free MT4 template that will allow you to instantly set your
charts up like this for MT4 click here.
Once you have installed the template for MT4 simply right click on any chart and select
template. Then select the Continuation Method template.
End of Day Trading This means you will look at the charts one time a day at the end of
the day. You will be in trades for 4-30 days.
Charts to use: Weekly and Daily Charts Confirm trend on the weekly and trade the daily.
Swing Trading This means that you will look at the charts a few times a day and you will
be in trades from 1-4 days.
Charts to use: Daily and 4-Hour Charts Confirm trend on the daily and trade the 1-hour.
Intra-Day Trading This means that you will look at the charts several times a day and
you will be in trades from 1-2 days.
Rule #1:
Find the trend on the higher time frame.
If you are doing End of Day trading then you will be using the weekly and daily chart. The
first thing you want to do is find the trend on the higher time frame chart (weekly).
The way you do this is very simple. You look at the 50 EMA and count back ten bars and
determine whether or not it was sloping up more over the last ten bars or if it was sloping
down more over the last ten bars.
If the 50 EMA was is sloping up then the trend is up. If the 50 EMA is sloping down the
trend is down. If the trend is up you can only take buy trades. If the trend is down you can
only take sell trades.
The 50 EMA (red line) on the chart begins to change at bar one by beginning to slope up,
however you wont consider a trend change until bar ten. After bar ten you can begin to
look for buy trades on the Daily Chart. This leads to Rule 2.
Rule #2:
Move down to the lower time frame (daily chart in this
example) and look for a pull back against the trend.
A pullback is identified by anytime a candle closes on the opposite side of the 50 EMA
against the trend.
The first thing you want to verify is that the trend on the Daily chart is the same as the trend
on the Weekly chart. The trend on the weekly chart turned up and the trend on the Daily chart
is up as well.
The next thing that you want to do is to look for a pull back against the trend. The way you
identify this is very simple. If a candle closes below the 50 EMA while the trend is up then
this is considered a pullback against the trend. If a candle closes above the 50 EMA while
the trend is down, then this is a pullback against the trend.
In the case of this current example you can see an uptrend and you are looking to buy the
market. So you will be looking for the Williams %R to go below the -80 level. Once it goes
below the -80 level you are now looking for it to rise back above the -80 level.
The bar that corresponds with the rise of the Williams %R back above the -80 level will be
your signal candle.
The green dotted line shows where you would place our entry and the red dotted line shows
where you would place our stop loss.
Y would place a buy stop above the high of the signal candle (or below the low for a sell). The
stop loss will go below the low of the closest swing point in the opposite direction. A swing
point is defined as a candle with a lower low than the previous candle and the following
candle.
This is the very next trade that happens just a few days later. In this case you can see that
the trade makes a tidy profit.
As you can see, all of the requirements of the first 3 rules of engagement have been met.
Lets look at the profit taking strategy next.
First, before you can consider trailing your stop you must reach a 2/1 reward to risk ratio.
In this example your pip risk is 233 pips. That means the price must move 466 pips in your
favor before you can move your stop.
Entry = 1.60773
Stop = 1.58439
Price must reach 1.65430 in order to move your stop using the trailing stop method.
Once price reaches this price you will use what I call the Money Line Close in order to
trail your stop. This enables you to dynamically follow the market as far as possible before
cashing out and taking profits. This way you can let our winners run and cut your losses
short.
Once price reaches 1.65430 you will only movey our stop once there are two full candle
closes below the 5 SMA. Lets look at this same example.
Notice that price is above the 5 SMA at the point of the green line. Then abruptly it closes
below the 5 SMA. The next day it closes below the 5 SMA again. At this point you move your
stop to the lowest of the two closes as identified by the green dotted line.
The following day price breaches the lowest of the two closes and you are stopped out of the
trade with a profit of 310 pips. The end reward to risk ratio is 1.16.
In other words, for every $100 you risk on this trade you make back $116.
In this example we will look at this same strategy but how it works for swing trading using
the 4-hour chart. As youll see nothing changes between how we use it for end of day trad-
ing and for swing trading.
In case you arent familiar with the terms swing trading and end of day trading let me give
you a definition:
End of Day Trading Order: A buy or sell order that specifies a price for the security, and
keeps the transaction open until the end of the trading day. If a transaction is not made as
the desired price is not met by the close of trading, the end of day order will be canceled.
You can keep an end of day order open by making it a Good Till Cancelled order (GTC
for short). In this case the order will not be cancelled until it is filled or until you manually
cancel it.
Swing Trading: A short-term strategy used by traders to buy and sell a market whose
technical indicators suggest an upward or downward trend in the near future -- generally
one day to two weeks.
Remember... you are trying to capture the big trades with this that earn you much more
money than you risk. By doing this you could be right less than 50% of the time and still
win. However youll find that by using this method you will win 6 to 8 times out of 10.
Position Sizing
Position sizing (also known as money management) is critical to your success as a Forex
Trader. When trading the Forex you are using high leverage and position sizing becomes
even more critical.
Position size is the only real determining factor as to how much you will win and how much
you will lose on a trade. I recommend using a fixed fractional position sizing method. This
means that on every trade, no matter where your stop loss goes youll always trade a per-
centage of your account value.
So in this example you would risk 1 mini lot which equates to $1 per pip.
Thats it. You are ready to start this wonderful and potentially very profitable journey of
Forex trading. The Continuation Method has been responsible for hundreds of thousands
of dollars in profit for myself and many other traders and investors... and it can be for you
too.
But you have to take action today. You have to take a risk if you want to get any kind of
reward. Dont procrastinate and dont waste any more time.
Use the quick start checklist on the next page as your motivator to move forward with your
dreams and goals of a bright financial future trading the Forex.
Now that you have some working knowledge on the subject of Forex trading its time to get
started. Below is a simple Quick Start Checklist to help you get moving fast.
I recommend starting with a demo account first. This is going to allow you to get familiar
with how to read quotes and place trades on their platform.
The two recommended charting and trading platforms of choice are MetaTrader 4 and
Ninja Trader. MetaTrader 4, or MT4 for short, is the most widely used Forex charting and
trading platform in the world. Ninja Trader is another common charting and trading platform
that can be used with multiple brokers.
Once you have downloaded MetaTrader 4 from your broker of choice you can download
and install the template. To load the template on a chart simply
follow the instructions here.
Step 3: Look For Trade Setups Using These Four Simple Steps
2. Move down 1-2 time frames and look for a pull-back against the larger trend (see
rule #2 above)
3. Verify that the Williams %R is at the -20 level (for selling) or -80 level (for buying)
see rule #3 above.
4. Enter the trade using no more than 1% risk and follow the Profit Taking Rules (see
rule #4 above). In this case you will use a buy stop to buy and a sell stop to sell.
Conclusion
Keeping things simple as a trader is a way to almost guarantee long-term success. The
best traders in the world have become very good at mastering simple strategies. Simple
strategies give you as the trader a better ability to execute the strategy with precision and
accuracy thereby reducing the number of mistakes you make.
In my experience mistakes are one of the greatest cost factors to a new trader. Some
mistakes can even be devastating to a newbie trader. This makes it all the more important to
keep things simple. My philosophy has always been centered around what I call the K.I.S.S.
technique. K.I.S.S. stands for Keep It Simple To Succeed.
The Continuation Method is a simple strategy that newbies to veterans alike can put into
their trading arsenal immediately and start to see results. Ive been trading full-time for over
a decade and this is still my most used and favorite strategy. Try it out today and let us know
what you think.
After 12 months as a junior trader he got an opportunity to manage a small private fund
for the firm. Twelve months later he had recorded a 435% profit. Shortly after, in 2006, Mr.
Robles became a CTA and launched his own currency-trading firm, YourForexMentor.Com.
Mr. Robles has since traded millions of dollars in client funds and has educated thousands
of traders around the world through his books, seminars and online courses.
In his book, How To Profit From The Falling Dollar he accurately predicted the collapse
of the housing bubble, the devaluing of the dollar against other major world currencies, the
bull market in gold, and the rise of China. Mr. Robles presently serves as founder and chief
editor of Currency Investors Alliance, a financial publishing company that provides traders
with strategic information for turbulent times.
Mr. Robles also speaks in the U.S. and abroad on trend following, technical analysis and
money management for the FOREX markets.
As traders, almost everyone would agree that getting into the market at the right price and
the right time is the key to making money. But did you know that a good entry is the least
important part of a profitable trading equation? The truth is that your exit in the trade is far
more important than your entry.
The exit in a trend ultimately determines whether you take a profit or a loss. That means the
right exit can help you maximize profits and minimize losses.
The right exit can turn a losing trade in to a winning trade. Conversely, the wrong exit can
turn a winning trade in to a losing trade. Perhaps you have had this problem before:
Scenario One: You enter a trade, and you are up 50 pips, and the trade turns around
and stops you out.
Scenario Two: You enter a trade and you are stopped out for a 30 pip loss. Then
market reverses and crosses over where your Take Profit was set.
Why do average traders lose money consistently? They dont know where to set their stop/
loss and take profit targets. Heres an example:
Markets spike up and down, taking out levels along the way. Even when a market is trending,
it will find a way to take out a lot of stop/losses along the way. Why would you place your
stop/loss below the most recent low? You are almost guaranteeing that the market will stop
out your order for a loss.
How do you reverse this problem? Its simple, when you think about it. Instead of making
your stop/loss an easy target, make your take profit an easy target. And make your
stop/loss hard to find. That way, the same market moves that are taking everyone elses
stop/losses out will be depositing cash into your account. This simple logic works with any
entry strategy and it is designed to put active traders in a position to win more trades and
deposit more money into their accounts.
Heres the secret to gaining a massive advantage, especially for traders who use time frames
less than the daily charts: Place your profit target INSIDE the area that the market is likely
to float and your stop/loss OUTSIDE the area that the market is likely to float. This means
you have a negative risk to reward ratio. If you have a high probability of winning a trade, it
is okay if your risk/reward is negative, neutral or positive. But if its far easier to take an 80
pip stop/loss for a 50 pip target and win 70% of the time, then why not achieve success that
way?
o For example, if the ATR for your time frame at the time of entry is 7 pips, you want
your take profit to be 28-49 pips.
The next step is to draw a zone or place lines on the chart from 28 to 49 pips and then move
to a larger time frame to determine where the most sensible target in that zone would be.
Anywhere within the 4-7 ATR zone will put you at an advantage to exit the trade with a win
a high percentage of the time.
Using technical analysis to enhance your entry point within the ATR zone will take your
profitability to the next level.
Stop/Loss Placing your stop/loss outside the ATR zone is key to this strategy.
The stop loss zone for this strategy is 7-12 times the ATR on a given
time frame.
Once again, you want to revert to a larger time frame to see where the best place is to place
your stop/loss within this zone. Using technical analysis to help you place your stop/loss is
also helpful.
The key to your stop/loss placement is that you dont want it to be an easy target.
We realize that every once in a while, the market will take out a stop/loss regardless of
where you place it. But if you are winning better than 70 percent of your trades, you are still
making money consistently.
The combination of placing your Take Profit in a high probability area and your Stop/Loss in
a low probability area will have a dramatic effect on your trading performance.
This is an automated tool for Forex traders that sits on top of MT4 charts and places the
suggested Take Profit and Stop/Loss zones for you.
At any time on any time frame, you can click the BUY or SELL button, which will automatically
draw your Take Profit and Stop/Loss Zones based on the direction you would like to trade
and the current conditions of the market.
If the market is expanding, the zones are stretched. If the market is contracting, the zones
are tightened. With the zones automatically plotted for you, you can find more high probability
trades, and dramatically reduce your risk of getting stopped-out on your trades.
The beauty of the forex market is that it allows almost anyone the opportunity to achieve
financial freedom. In a world where the opportunity to make a good living is dwindling by
the day the forex market still offers that dream. This market has literally changed my life and
I firmly believe that with the right strategy and direction anyone can be just as successful.
The trouble with most traders is they dont realize the forex market is controlled and thus
manipulated. Most people see this in the news and get discouraged; I however believe
this is the best way to predict future price movements. The simple truth is if you can track
the manipulation then you can track the next direction in the market with a much higher
probability.
For years traders have been taught that the forex market is too large to be manipulated.
Maybe you were taught the same thing as you first started to trade? Over the last 2 years
forex market manipulation in the news has shattered the old belief that the FX market is too
large to be manipulated. A simple google search for forex market manipulation will reveal
100s if not 1000s of stories that cover many different types of manipulation. Simply put the
old adage that the forex market is too large to be manipulated has been completely blown
out of the water time and time again.
Think about it this way. Think about a stock for a minute. In this example we will use Apple
(AAPL). On the day Im writing this AAPL has traded roughly 70 million shares which is just
over 8.26 billion dollars in volume if you have an average of $118 per share. Now imagine
for a second that 80% of that volume (56 million shares) was traded by just 10 different
individuals. Do you think that those 10 individuals would have the ability to move the price
of that stock if they were responsible for 56 or the 70 million shares that traded hands? Of
course they would! The same is thus true for the forex market. 10 banks control just over 4
trillion (80% of the daily volume) of the over 5 trillion dollars that trades hands daily. It doesnt
matter whether the market size is a million dollars or 10s of trillions of dollarsif you control
80% of the volume you will at the very least control short term market direction.
The main point is this, as retail traders we will never know the reason for every order and
quite frankly it really doesnt matter. What matters is when they desire to enter or fill a posi-
tion they must search out the liquidity to both enter as well as exit a position. This constant
and daily search for liquidity is at the core of our bank trading strategy. How then can we
identify these likely areas of liquidity (manipulation points), and how do we know if or when
to enter the market?
The Strategy
I firmly believe that simplicity is the key to long term success. Over optimization and compli-
cated strategies tend to not only be hard to follow but they also tend to do well in some mar-
ket conditions only to then give back everything and more when market conditions change.
The bank trading strategy has been tested through all market conditions going back to 2009.
In 2009 the market had times where the average range was close to 200 pips on the EUR/
USD. On the opposite side of the spectrum 2014 produced the most stagnant daily range
ever seen in the last 25 years. Regardless of market type, volatility, or range the bank trading
strategy stands the test of time because it focuses on the constant that does not waverthat
is the majority control of the banks.
The key is finding areas that the rest of the market is going to view as significant. I recommend
picking manipulation points from the chart that you intend to take your entries from. Because
I use the 15M chart for all my entries, I also use the 15M chart to pick all manipulation points.
The longer the time frame, the longer term perspective you should take with that trade.
Trades taken off of 15M levels are intra-day trades and thus they should have intra-day
targets. Trades taken from daily levels should have targets that correspond to longer term
price swings. For the examples in this book I will use the 15M chart.
I start picking manipulation points for the following day during the Asian session. The question
Im asking myself is, is the rest of the market looking at this level? The first level we typically
look to use is the most recent high and low that has been created. Lets break down what
is happening at the last high. For those in the markets that are short the likely stop location
becomes the last high. Placing initial stops or trailing stops down to the most recent high
or low is one of the most frequently used techniques and unfortunately is one of the worst
locations to do so. Why? If Smart Money is going to continue the price to the downside
they will likely drive the market into and through the previous high (area of liquidity) before
continuing the price down. This allows them to sell into any buying pressure triggered by
hitting stops above the previous highs.
The beauty of the confirmation entry is how mechanical it is. One of the biggest struggles
new traders have is the inability to take consistent entries. Because the confirmation
entry has a black and white rule set it allows traders to produce consistent results without
discretionary trade analysis. This entry technique has 3 simple steps.
Step #1 The first step in the confirmation entry is a 3 pip break of the pre-selected
manipulation point. This is the only rule of the stop run candle. How the candle closes is
not important. The only criteria I look for is whether or not the manipulation point has been
broken by 3 pips. The illustration below shows 3 valid stop run candles that visually look
different. Although they all look slightly different they all satisfy the one rule of the stop run
candle by breaking the manipulation point by at least 3 pips.
Its important to understand that the illustration of the stop run candle is a perfect 3 candle
setup. The confirmation entry can however be a total of 5 candles as a maximum. Candle
#1 will create the stop run but there may not be a confirmation candle until the 4th candle
and then the 5th candle could provide the pullback. It is also important to understand
what invalidates a trade setup. When two consecutive candles open and close beyond the
manipulation point the trade gets thrown out and we then wait for the market to come into
the next selected manipulation point. This is a basic overview of a confirmation entry.
The video below is over an hour long breakdown of the confirmation entry and all different
aspects of it. The video is actually from one of our training sessions we run twice per week
as part of the continuing education.
Imagine you take 1 trade per day. With an average of 22 trading days a month that would
give us 22 different trades. For our example we will use a risk of 2% per trade and a win/
loss ratio of only 50%. Lets see how this breaks down over the course of 12 months.
22 Trades Total:
11 Winning Trades X +4% Per Winning Trade = +44% On The Winning Trades
11 Losing Trades X -2% Per Losing Trade = -22% On The Losing Trades
+44% On The Winning Trades Minus -22% On The Losing Trades = +22% Monthly Total
If you make 22% per month on a $5,000 account you will have $54,361 at the end of the
year if you compound the profits each month. Obviously this is a perfect world scenario but
as you can see even with a 50% win/loss ratio and a high R/R ratio the potential is huge.
So many times trades associate success with a win/loss ratio when really success often
has nothing to do with a win/loss ratio and is almost exclusively related to the R/R ratio
your trading strategy produces. If you take nothing else away from the information in this
strategy then take away the importance of R/R ratios.
The numbers described above show the importance of R/R ratios. Obviously its not as
simple as setting your take profit to two times your risk and then hoping for the best. A
strategy must be designed around R/R in order to take advantage of it successfully.
When we teach people to trade we take the same approach. I dont believe traders can
learn by watching a course or reading a book and the statistics prove that statement to be
true. That is why our bank trading course is just the start. After someone goes through the
course and learns the mechanics of the strategy, next comes the application phase. We
use 4 different tools to give everyone the best chance at learning to trade.
2) Daily Market Review (DMR) The DMR video averages 15 minutes and is released
every day before trading begins. In that video we do review what happened during the
previous day based off of the prior days DMR. More importantly we preview the upcoming
day. In that preview I choose the exact manipulation points I will be looking to trade from. We
also select the expected direction for the following day based on market cycle (something
we did not cover). Because the confirmation entry is mechanical you know exactly what
happened based on the previous days review. You also have an exact trade plan for the
following day. All that is required is to simply wait for a valid entry at one of the pre-selected
levels. We dont just tell people how to trade, we actually show them live and in advance of
the actual move. All DMRs are in video format therefore they can be viewed at any time.
3) Live Forex Training Room Our live training room runs on Tuesday as well as
Thursday. During both days the room runs from 3-5AM Eastern for the London session and
9:15-11:30AM Eastern for the New York Session. During the room we cover the previous
trading day as well as any trades setting up while we are in the room. The room offers a great
opportunity to break down different aspects of the strategy and get questions answered on
any trade setups. We also record all sessions for those who cannot view the sessions live
4) Member Forum & Chat Members have access to the bank trading community
forum as well as the member chat. While most prefer to email us directly, the forum allows
new members to view others members trade journals, get questions answered, as well as
share their own thoughts.
5) Lifetime Access & Support Our membership is a one-time payment for lifetime
access to the community as well as to our support.
6) 30 Day Refund We have a very simple policyif youre not 100% convinced that
youre getting far more from us that what you paid then simply ask for a refund and we are
happy to send it back.
What you are about to learn will change the way you look at trading the Foreign Exchange
markets. In this chapter, you will learn how the banks hide their plan of action through their
volume activity by using algorithmic high frequency protocols that they have designed to
hide their real intent from the Retail Trader. Now, if I have your attention, then dont stop
reading because what I am going to show you in the coming pages will finally make you
aware of the new truth. A wise man once said the truth will set you free but in this case, the
truth will greatly improve your trading consistency.
You will learn about a new state of the art technology that has been created to decode the
Market Makers/Banks intent. You will learn to take fear and doubt away from your decision
process before entering the trade. You wont use conventional indicators like Moving
Averages, MACD, Stochastic, RSI, or others because the banks have counter programmed
those outdated indicators and that is why you cant get an edge on the trade. Because of
this, many of you turn to chart pattern recognition programs that do not work for you either.
So do yourself a favor and continue reading this chapter and make sure to watch video. We
will demonstrate how we made over 700 pips in one night using this system.
One of the things that you will discover is that with PhoenixTradingStrategies.com you
have reached the finish line. We are the final frontier when it comes to Order Flow trading
and Volume Price Analysis.
The Forex is a market created by a network of banks that are in the business of buying
and selling currencies. Most banks and retail traders in many cases trade twenty eight (28)
pairs that are derived from the eight (8) major currencies which are the following:
Now you and I both know that everyone out there emphasizes that you should only trade
the majors because that is where most of the volume is traded. There is some merit to that,
but I will show you that they have a different agenda that does not always apply to the major
pairs.
Currency Portfolio Rebalancing is the idea that money is in continuous motion but that
there is a balance that must be maintained between the portfolio of the eight (8) major
pairs. While some currencies are trading within a specific frequency of balance others are
taken out of balance and then brought back into balance. The example below portrays this
concept.
In theory, it seems logical but how do you apply it in a real trade? This is a good question,
and we will get to how you apply it in the live trading later.
Lets talk about volume in the FX Market. Reality is that there is no centralized exchange for
Forex and that is why you cannot quantify the real volume that the Banks/Market Makers
are actually trading. This has been a way to keep the retail trader in the dark. So we
have created a volume indicator that will help the retail trader decode their order flow by
synthetically creating volume that can be interpreted and show the degree of interest that
the banks have in rebalancing their risk at certain price levels. We are able to isolate buying
and selling volume numerically per bar per time frame.
So for example, if you are on the (15) fifteen minute time frame, this indicator will show how
many millions they are selling and buying in the same candle giving you the depth of the
market per candle that you could never see before.
As we continue, you will discover that our volume indicator is better than anything that you
have ever used to define order flow because it is easy to interpret and can tell you if that
candle is really bullish with bullish volume or is really a bullish candle with bearish volume.
In the example below, you will see how we identify all the volume in the candle that we
tagged with a white arrow. Just that one candle had a total of 429.8 million that was quoted
in that one bullish green candle that moved a total of 32 pips. More importantly is that within
that candle we were able to isolate in panel (2) two, the buying and selling volume that was
quoted inside that bar. Showing the real emotion that drove the candle to go long. This has
never really been seen before by the Retail Forex Trader. Now imagine if you knew when
it mattered to look at the volume and understand that they were rebalancing their risk by
offsetting their short positions before driving the trade long the way they did here. You will
see later how valuable this information is to your decision process because our software
alerts you when you should be analyzing the volume per candlestick because the market
makers/banks have decided to execute their plan of action at a particular price level.
Why is it that retail traders are the last to know before volume and momentum are driven
into a currency pair? Why cant that information become more noticeable to the human
eye? That is the question that all traders ask themselves because they lack the right
information to plan their trade out before the Market Makers/Banks decide to move the
market. The Power Dots is an algorithmic piece of art that we created to identify when the
Market Makers/Banks are about to begin rebalancing their trades around a specific price
level where they have chosen to offset their short orders in order to drive the trade long.
The example below shows a graphic display of that powerful information that will alert you
hours in advance so you can plan your entry, stop loss and even price target without fear.
The Gold Dots are the Phoenix Power Dots. In the example above, you can see how using a
30 minute time frame plotted the Gold Dots at 20:00 hours above the green line. The green
line is an additional price level that was plotted on a higher time frame, and represents a
key area of support that the banks refused to break. This is because if the banks break
this area of support, it would trigger other algorithms from other banks that would create
a selling frenzy, instead of driving prices higher and offsetting their short positions. And
where you see the Power Dots form is exactly where the banks do a lot of high frequency
trading so when you combine the Phoenix Volume with it you can see how desperate they
are per candle to rebalance their orders but never trade below the Power Dots because
their intent here was always to go long 200 pips to the upside. Now think about this the
Power Dots began to form five (5) hours before the trade went long. So you had a five (5)
hour window to determine your entry, stop loss and take profit target.
In the example below, we combine all the indicators together to tell you the story. You can
see in the data box on the left the Power Dots formed at 1.1320 which was right above
1.1306 where the green line was plotted. So the price of 1.1320 was established by the
Market Makers as the price level that they were going to aggressively rebalance their short
positions. The first Gold Power Dot shows the amount of volume that they were desperate
to sell. In Panel 2 on the Data box you can see that they were desperate to offset -292
Million on the sell side against 231 Million on the buy side. Leaving -60 Million that they
could not offset in that candle. So you see this price level is where they were going to do all
their high frequency trading to get out of their short positions before driving this trade long.
Thus, the reason why we call this Order Flow Trading with Volume Price Analysis.
So when you see the combination of facts and numbers, is it fair to say that they have
counter programmed candlesticks? Without this software alerting you and calculating all
this information for you to define and decode the Market Makers/Banks intent you would
have never thought that they were really intending to drive the trade long over 200 pips.
Finally, we put you in control of the trade by creating a Market Analyzer that will alert you
when the Gold Power Dots form in any of the 28 currency pairs that you prefer to trade.
This is the icing on the cake because it reduces your analysis time to when you should be
looking at the market not being a slave to it.
Conclusion
Whatever you decide to do, I want to wish you the very best in your journey to Trading the
Forex Markets. I hope that in this journey you choose PhoenixTradingStrategies.com as
your guide to staying (10) steps ahead of the Banks.
If you trade any market including the forex, you may want to consider adding Nadex to your
trading arsenal. Nadex gives you an excellent opportunity to manage your money, risk/
reward and it serves as hedge against market spikes that can keep you from losing trades.
With Nadex, you always know what your maximum risk and maximum reward is before you
place your order. In this chapter, you will be introduced to Nadex and you will be exposed
to 2 strategies that have high probabilities of success.
Nadex Binary Options have been called yes or no or up or down trading propositions.
Each contract has a maximum value of $100. This means that the most you could win or
lose is $100 per contract traded. Probabilities determine how much you can win or lose.
Lets say you think the price of gold will be above $1250 at 1:30pm EST
The market determines that there is a 70 percent probability you are right.
You would risk $70 on a market order to make $30 on this high probability trade.
Conversely, lets say you think the price of gold will be below $1250 at 1:30pm EST
Everything starts with your opinion on which direction the market is going
Determine whether you are buying or selling. How many contracts are you trading?
Decide what price you are willing to pay. Will it be a market or limit order?
You can let your trade ride until expiration or close it out early.
Nadex charts give you a wide variety of indicators you can use for technical analysis. On
this chart, the 8 period EMA, 50 period MA, Stochastics (12,3,3) are plotted along with a
volume indicator. Once you have determined the direction of the market, it is time to place
an order.
The daily low or high of the GBP/USD currency pair will be established between
2am-5am EST, when the European and London financial markets open.
The opposite high or low of the day will be established between 8am-2pm EDT
after the opening of the New York market.
Think of it like a see-saw, where the 6am-7am time period is the fulcrum.
Why does this happen?
At 2am EST, the European markets open and financial transactions start to happen. At 3am
the London market and the Bank of England opens. 3am is also the final hour of trading
in the Tokyo exchange. At 3am EDT, a huge volume of transactions are processed and
cleared in a very short one-hour period of time. The result is often a very bullish or bearish
move with the GBP and its related currency pairs. Think of it like a garden hose being
crimped, with water accelerating out the hose when you squeeze it.
The volume of transactions, coupled with any economic news reports coming out of the UK
(usually at 4:30am EDT) will set the direction of the market for the rest of the dy. Heres an
example:
The order filled, and the market moved sharply downward. At 8am, when the New York
market opened, the market accelerated downward, and the trade was never threatened.
This pattern repeats itself with great frequency. If you look at the hourly charts of the GBP/
USD, you will see patterns like this with great frequency:
If you can spot the low or the high of the market between 2-5am EST, there is a high
probability that the opposing high or low will be revealed after 8am EST. If the low or the
high of the morning session isnt obvious to you, then its probably a good day to skip this
strategy for the day.
Check the Economic Calendar for news from the UK and the US. Most news reports
out of the UK are released at 4:30am EDT, so you want to hold off trading this strategy until
those reports are released.
Check the US Dollar Index. Is it trending up or down? The US Dollar Index moves in the
opposite direction of the GBP/USD.
Strike Price: +/- First strike price above the morning low if BUYING, or below the morning
high if SELLING
o The London Open Strategy works very consistently, as long as the US Dollar
Index isnt at 10-Year highs or the GBP/USD isnt at 10-year lows. Be aware
of major economic news in the UK and USA.
o Use a risk/reward strategy that best suits your trading style. You can place a
market order, and risk more per contract, or you can place a pending/working
order and wait until the market comes back and fills you.
Conclusion
Trading Nadex Binary Options is a simple yes or no, up or down proposition. To trade
Nadex Binary Options successfully, you need to master three areas of trading:
Disciplined money management Never risk more than 5% of your account per trade
Risk/Reward Management Know how to manage your winners and losers
Directional Strategies with a High Probability of Success 70 percent or better. Make
sure you test any new theory in demo at least 20 times to gauge probabilities of success.
If you can master these three areas, you will achieve much better consistency in your
trading and your account balance will continue to grow.
Open Up a 2-Week Free Nadex Demo Account Sign up for a free Nadex demo
account. It will be funded with $25,000 in play money. Test these strategies and see how
they work out for you.