Forex Bermuda 2012

FOREX BERMUDA

TRADING STRATEGY

WWW.SUPERIORFXSIGNALS.COM

Forex Bermuda 2012

DISCLAIMER

U.S. Government Required Disclaimer - Commodity Futures Trading Commission Futures

and Options trading has large potential rewards, but also large potential risks. You must be

aware of the risks and be willing to accept them in order to invest in the futures and options

markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an

offer to Buy/Sell futures or options. No representation is being made that any account will or

is likely to achieve profits or losses similar to those discussed on this ebook. The past

performance of any trading system or methodology is not necessarily indicative of future

results.

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE

CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED

RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE

NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED

FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF

LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO

THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO

REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO

ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

No representation is being made that any account will or is likely to achieve profits or losses

similar to those shown. In fact, there are frequently sharp differences between hypothetical

performance results and the actual results subsequently achieved by any particular trading

program. Hypothetical trading does not involve financial risk, and no hypothetical trading

record can completely account for the impact of financial risk in actual trading.

All information on this website or any e-book purchased from this website is for educational

purposes only and is not intended to provide financial advise. Any statements about profits

or income, expressed or implied, does not represent a guarantee. Your actual trading may

result in losses as no trading system is guaranteed. You accept full responsibilities for your

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Forex Bermuda 2012

1B1BThank you and Welcome,

In this ebook, I will show you how to trade forex market using a

very simple and yet very powerful strategy.

If you are beginner, I highly recommend getting basic trading

knowledge before start reading this ebook. Here is a great

source for this mission :

www.babypips.com

You may also want to open a demo account and download

metatrader software for free. There are many brokers offering

free demo accounts and use metatrader platform:

FXDD : www.fxdd.com

I will start by explaining this system and after that I will tell you

all about money management.

Thanks again and wish you all the best,

www.superiorfxsignals.com

Forex Bermuda 2012

2B2BAbout The System

Forex Bermuda Trading System is based on a price pattern.

Called ―The Triangle’’ .

The Triangle pattern is simply Two small trends ( upper trend –

lower trend ) crossing each other and form a shape that looks

like a triangle.

Forex Bermuda 2012

Price usually move inside that triangle and then we should see a

breakout. The direction of the main trend is not important at

all. We are not following the trend. We are trading breakouts.

At the above example, the breakout happened in a down trend

movement.

But it could also be an Up trend breakout.

Forex Bermuda 2012

Your main job now is to practice on recognizing triangle

patterns. Once you learned this skill, the rest should not be a

problem at all.

Remember, you only need to see an uptrend crossing a down

trend and form a triangle shape.

Try to practice on 1 hour time frame or 4 hour time frame.

Smaller time frames are not recommended in the beginning.

It doesn’t matter where the shape is formed, in the middle or at

the beginning/end of a trend. The direction that the triangle is

pointing at, also doesn’t matter.

One thing you should keep in mind, this pattern happens all the

time. No matter what currency pair you are trading or what

time frame you are using. And that’s a big advantage!

So, feel free to practice on any currency pair you like. 1 hour/4

hour time frames for now. And when you feel that you are ready

to take the next step .. jump to the next page.

Forex Bermuda 2012

Fibonacci Retracement ( Fibo Levels ):

Leonardo Fibonacci was a mathematician born in 12th Century

Italy. His study of Fibonacci numbers (a sequence of numbers

where each number is the sum of the two previous numbers) is

often applied by modern technical analysts to find support and

resistance in stock charts.

Default Levels : 0.0 – 23.6 – 38.2 – 50 – 61.8 – 100 – 161.8 –

261.8 – 423.6

We are going to use the 123 pattern. The 123 pattern is a

reversal chart pattern which occurs very frequently and has a

very high success ratio. 123’s occur at the end of trends and

swings, and they are an indication of a change in trend. They

can also be found within a trading range, and they take place

when the directional momentum of a trend is diminishing…

Here is how it looks like:

Forex Bermuda 2012

1 - 2 – 3 Pattern with down Trend :

1 – 2 – 3 Pattern with Up Trend :

Forex Bermuda 2012

System Setup

This system works with all currency pairs and all time frames.

But it’s recommended to be used with 15 minutes or higher time

frames.

As you know now, we are going to use 2 patterns with this

system:

1 – The Triangle Pattern

2 – The 1 2 3 Pattern

Here is how it looks like on the chart :

Forex Bermuda 2012

And another one ..

Forex Bermuda 2012

Once the 1 2 3 pattern was spot, we attach the Fibonacci levels

to the pattern.

If the 1 2 3 pattern predicts an uptrend breakout, then we attach

fibo level 0 to point 1. And fibo level 100 to point 2.

Forex Bermuda 2012

If the 1 2 3 pattern predicts a downtrend breakout, then we

attach fibo level 0 to point 1. And fibo level 100 to point 2.

Very Important : Point 3 must always be at one of the fibo

retracement levels :

23.6 – 38.2 – 50 – 61.8

If not, then it’s not a valid 1-2-3 pattern and there would be no

setup and no entry for that trade.

Forex Bermuda 2012

System Rules

We Enter the market in the direction of the 1-2-3 pattern

breakout when price hit fibo level 100.

Fibo level 100 is our entry point.

Place your stoploss right at point 3 or few pips below/above it.

Targets :

Target 1 = Fibo level 161.8

Target 2 = Fibo level 261.8

Target 3 = Fibo level 423.6

Next, we are going to see some trading examples ..

Forex Bermuda 2012

Trading Examples!

EUR/USD – Feb/2009 – 1H Chart

Triangle Pattern + 123 Pattern ( uptrend breakout )

Signal : Buy @ 1.2759 ( fibo level 100 )

Stoploss @ 1.2570 ( 3 Point - fibo level 23.6 )

Target @ 1.2911 ( fibo level 161.8 )

Profit = 152 + Pips

Forex Bermuda 2012

EUR/USD – Mar/2009 – 1H Chart

Triangle Pattern + 123 Pattern ( uptrend breakout )

Signal : Buy @ 1.3071 ( fibo level 100 )

Stoploss @ 1.2937 ( 3 Point - fibo level 23.6 )

Target 1 @ 1.3203 ( fibo level 161.8 )

Profit = 132 + Pips

Forex Bermuda 2012

EUR/USD – Mar/2009 – 1H Chart

Triangle Pattern + 123 Pattern ( Downtrend breakout )

Signal : Sell @ 1.3593 ( fibo level 100 )

Stoploss @ 1.3582 ( 3 Point - fibo level 23.6 )

Target 1 @ 1.3406 ( fibo level 161.8 )

Profit = 187 + Pips

Forex Bermuda 2012

The main problem could have with this system is the triangle

formation. So , here is my advice :

Wait until the breakout happens and the triangle is formed

before you enter any trades.

This is ok, because anyway we are going to wait for price to hit

fibo level 100 to enter the market. And not going to trade once

the breakout happens.

Take your time to confirm the pattern formation and breakout.

Avoid big triangles or start by trading smaller time frames.

Like 15m – 30m charts.

Start by trading currency pairs with small spreads. Like

EUR/USD.

Forex Bermuda 2012

Money Management

The very first thing you should do when you start to trade is

think about your risk management tactics. Before placing any

trade, you should ask yourself the following question:

How much money am I willing to risk on this trade?

The answer to this question should not be found on Google or

in a discussion forum – but should be answered by YOU and

yourself only.

Money management means you do everything possible to

minimize the risk to your money by minimizing your emotions

when you are doing your trading. You cannot just give your

money and expect success. You cannot take uncalculated risks.

You cannot invest your money into this market with anything

even remotely like being thoughtless.

Even when your money management approach does not affect

your trading system, it will always affect the size of your trading

account.

Money management in forex trading depends on - risk and

leverage.

Risk only very small percentage of total investment:

Risky trading would be anything greater than 5% risk per trade.

If you are trading and willing to lose 25% of your account on

each trade, a few bad trades in a row and your account is

bleeding badly, quite possibly done for. Recommended Trade

Risk is usually 1-5% of your account, and typically as an account

grows in size traders risk even less because the value of floating

profit/loss and make a stomach turn

Forex Bermuda 2012

Calculate risk / reward ratio before trading:

Before entering any trade, make sure that your risk / reward

ratio is at least 1:3, which means that chances to lose are tree

times less than promises to win.

For example: 30 pips of possible loss versus 100 pips of

potential win is a good trade to enter.

Another example: 40 pips to lose versus 30 pips to win, 20 pips

to lose versus 20 pips to win — all that is a clear sign of bad risk

management.

Here is a free tool that you can use :

http://www.goforex.net/money-management-calculator.htm

What is leverage? As an example, if you have a Leverage of

100:1, it means that for every $1.00 dollar of your own capital

in your account you have $100.00 buying power. This sounds

scary, but you do not have to be afraid, because currencies

usually move only a portion of a percent, sometimes a little

more in a day. Leverage has to do with the amount you can

borrow from your broker, it is the amount your broker is willing

to lend you. Today, most brokers are willing to go as high as

lending you $500.00 for every $1.00 you deposit in your

account. Usually most brokers use the standard 100:1 leverage;

you don’t really need anything more than that; and of course,

higher leverage means higher risk when used.

Forex Bermuda 2012

When you trade without sound money management rules, you

are in fact gambling with your investment. You are not looking

at the long term possible on your investment. Rather you are

only looking for that quick high return. Sound money

management rules will not only protect your investment, but

they will make you very profitable in your investing future.

Discipline and money management means survival to a Forex

trader. Gamblers do not last long in the trading business; they

flash and burn out leaving only the ashes of their failure behind.

Money making is a serious game and if you are not serious

about wanting to make money and keep on making money even

when trading starts tapering off or goes bad suddenly, then you

must not take up a career as a trader.

The successful Forex trader plays the money game like a chess

player. He uses his strategies to manoeuvre, he knows when to

move forward boldly and he has learned when it is the best time

to hang back and wait to see what the market will do.

Best regards,

Michel Selim

www.superiorfxsignals.com