THE FOREX TRADING SYSTEM EXPLAINED

The forex moves in trends, the trend can be bullish (upward), bearish (downward)

or Horizontal (sideways).

The approach of this trading system does not care which direction the price wants

to move, it is more concerned about making a minimum of 40 pips per day from

the forex trading.

When using this forex system the concept is; your success is not in the number of

forex pips you make but in the volume you entered in.

Other attachments that come with this manual are;

1. Continuous automatic pivot calculator (Which works on metatrader platforms

only).

2. An average forex daily range calculator, Average weekly range calculator and

Average monthly range calculator (Also works on metatrader platforms only).

For the range forex calculators, I have already done my research to discover the

pairs this trading system work with. (you may use it to research more on your

own).

The currency forex pairs this system work with are;

* AUD/USD (NORMAL SPEED)

* EUR/USD (NORMAL SPEED)

* AUD/NZD (LIGHTNING SPEED)

* AUD/CAD (LIGHTNING SPEED)

Fig. 1 A Metatrader Platform Screenshot

The Above is an EUR/USD 4hours Chart on metatrader platform Nov/Dec 2008.

THE FOREX STRATEGY

Pick the vertical line from the tool bar and demarcate the previous day from the

present day make sure the line shows the present day's first candlestick at 00:00

Hours.

Pick the horizontal line from the tool bar and divide the first candle of the present

day into two. Call this line; line X

Count 40pips above line X and draw another horizontal line exactly 40 pips above

line X and call this line; line X1.

Count another 40 pips above line X1 and draw your horizontal line X2 exactly

40pips above line X1.

Count 40pips below line X and draw a horizontal line exactly 40 pips below line

X, call this line; line X3.

Count another 40 pips below line X3 and draw a horizontal line exactly 40pips

below line X3.

Your forexChart should look like this;

EXPLANATION

Line X is the starting point, allow price to dance between line X1 and X3 until it

picks its direction for the day.

Set your buy stop on line X1's price value, your take profit must be at line X2,

stop loss must be at line X4.

Set your sell stop on line X3's price value, your take profit must be at line X4,

stop loss must be at line X2.

LOGIC GATES

1. Price could trigger your buy order and hit your take profit of 40 pips.

2. Price could trigger your sell order and hit your take profit of 40 pips.

3. Price could trigger both your buy order and your sell order, hit both take

profit zones, giving you a profit of 80 pips.

4. Price could hit your buy order and not reach your take profit, come back

downwards 80 pips to hit your sell order and give you a loss of 80 pips.

5. Price could hit your sell order and not reach your take profit, come back

upwards 80 pips to hit your buy order and give you a loss of 80 pips.

Instance 4 and 5 happens around thrice a month in the currency pairs this system

works with.

To reduce the number of Instance 4 and 5 in a month, repeat the pending orders

explained above immediately you take your first profit for the day making the

triggered take profit your next starting point. That is your line X.

With this system, you can catch 40 pips out of every 81pips price movement no

matter the direction it goes. But let's just say 90pips to be on the safe side, 90 pips

was the criteria I used when doing my research, price can have up trends for three

months, moving thousands of pips upwards or downwards.

Once the direction has started these pairs find it difficult moving 80 pips in the

opposite direction in the same day.

Consequently, if the price moves 1000 pips upward or downwards in a month,

you'll have the chance of catching almost 500 pips during such a month.

If you will use this system you need to rule out greed. Below is the blue print for

entering positions when using this system;

The Forex broker Account below starts with 400USD and after 15 Trades became

4,440USD. Please stick to the rules of this forex system. Don't be too much in a

hurry.

Trade 400USD

1. 80USD (0.2) LOTS

2. 80USD (0.2) LOTS

3. 80USD (0.2) LOTS

4. 120USD (0.3) LOTS

5. 120USD (0.3) LOTS

880USD

1. 160USD (0.4) LOTS

2. 160USD (0.4) LOTS

3. 200USD (0.5) LOTS

4. 240USD (0.6) LOTS

5. 280USD (0.7) LOTS

1920USD

1. 360USD (0.9) LOTS

2. 400USD (1.0) LOTS

3. 480USD (1.2) LOTS

4. 600USD (1.5) LOTS

5. 680USD (1.7) LOTS

4,440USD

You are expected to use half of your buying power in setting both trades. This

enables you to enter a hedge when instance 4 and 5 above occurs.

Never wait for price to cut X1 or X3 and use all your buying power .

The above blue print does not guarantee that you'll win 15 Trades consecutively;

it is a guide to help you when entering positions.

In the instance that you decided to follow price by setting another trade, making

your first take profit of the day your point X then repeating the procedure, such

trades usually last till the following day.

What I do

I reset the trades the following day by determining my first candle for the present

day, delete the inactive pending orders of yesterday and take my profit from the

present running trade as set yesterday.

Shift the stop loss of yesterday's trade to be the same as today's pending order

counterpart.

Instances where you see a reversal pattern you can close yesterday's trade

immediately.

If it is a continuation pattern, that's double profits for you today

If you don't understand how to read charts, then just leave it set along with today's

trade.

FOREX TRADING SYSTEM TWO (BONUS)

You'll need to load a forex auto pivot calculator on your metatrader platform to

use this system.

http://www.forexfactory.com/showthread.php?t=5538

Example;

Copy the pivot calculator and paste it inside C:\Program files\Metatrader

Northfinance\experts\indicators

To load the pivots on your chart click on the indicator button and choose custom,

then select Auto-Pivot Plotter.

Repeat a similar process for the Average Daily Range Calculator

http://www.forexfactory.com/showthread.php?p=210832

Your forex Chart should look similar to the picture below.

You should have some support lines and some resistant lines.

THE FOREX TRADING STRATEGY

Set a pending order between the support and resistant lines allowing a 15 Pips gap

from the lines. Buy at the upper parts (When resistance is broken)

and sell at the lower parts (When support is broken) there's a secret about setting

these straddles It's like setting a trap for the price.

This could be the worst way to trade if you don't know the secret behind it.

Another choice is to use instant executions (Market Orders) while trading support

and resistance. I don't recommend that, Metatraders have a nasty habit of asking

you to re-quote your entry price.

Please use the auto pivot on USD/JPY, a very consistent bouncer.

I believe the most reliable indicator ever is PIVOT POINTS if you have any other

please tell me. It can enhance the system in a great way.

THE SECRET BEHIND THE STRADDLES

On hourly charts, the gap between support and resistant lines ranges between 40

pips to 120 pips. I recommend hourly charts and 15 minutes charts.

You are to pick 25 pips after every 15 pips movement away from the lines. Set

your pending orders on the condition that a support or resistant line is about to be

broken.

Price may or may not break the lines, which means a break or a bounce.

What you're expected to do.

When price touches the lines (Which may be a support line or resistant line),

place your straddle from the line with 15pips gap before buy is executed, 15pips

gap before sell is executed.

Your stop loss should be 10 pips above the resistant line when you place your sell

order, 10pips below the support line when you place your buy order, this makes a

total of 25pips stop loss.

Your take profit should be 25pips after your entry point.

You will certainly not win all the trades!

Your risk to reward ratio on each trade is 1:1 or let's say 50/50.

But you have a possibility of losing one out of every three trades.

- Straddle means setting a buy pending order above current price action and

setting a sell pending order below current price action.

- Pending orders are orders you set on your platform, they don't execute until the

price you state is reached.