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Tradeology Forex Growth Code

3

Introduction

Welcome to the Forex Growth Code trading system.

This is a straight-forward, simple but robust trading system. We are going to use some

great tools that you might be familiar with, and we'll also be using a candle type that you

may NOT be familiar with.

Generally, the Forex Growth Code is ideal for trend-following trades, but there will be

times when the system will find us reversal trades. (Usually, this will occur when the setup

and the signal phases happen at the same time, but I will get into that in the examples).

We are going to be taking a very systematic approach to trading this system.

When this and this and this happen, we enter a trade. The stop loss is nice and clear, and

the take profit gives us a couple of options (but when in doubt, use the default exit).

The Forex Growth Code is a good system for making tidy little profits in the markets, and

anyone can use it whether or not they have traded for years or are a new trader.

Timeframes The Forex Growth Code works on all the different timeframes, but this works best on the

1 hour timeframe. The chart examples and the trades taken in this manual will all be on

the 1 hour timeframe.

The stop loss will be placed 30 pips above or below the entry, and this is best on the 1

hour timeframe charts. (For other timeframes, you will want to make the appropriate

adjustments to the stop loss and the target).

Let's move onto the system.


4

First Look This is what the Forex Growth Code system looks like when it's on a chart. You might even

see how to use it simply by looking at it. The Forex Growth Code is a user-friendly trading

system that will give us clear and profitable trading signals.

Image 1

With the indicators we have on the chart, we can determine:

• The direction we want to trade.

• The setups

• The entry signals

• The initial stop loss

• The trailing stop

• The target

• The bonus exit methods

Everything we need to make a complete system is at our fingertips.


5

Parts Of The System

There are 4 basic indicators used with the Forex Growth Code system:

1. PSAR (Parabolic Stop And Reverse)

2. Moving Averages

3. MACD

4. ADX (only the DMI lines)

Image 2

Heiken Ashi As well as the indicators, we will be using a different type of candle.

We are using something called a Heiken Ashi candle. They are a modification of the usual

Japanese Candlesticks that we normally use. They take into consideration part of the

previous candles information and gives us a better trending type of candle.

With Heiken Ashi candles, we will usually see more of the same color candle in a row, it's

better at identifying a trending market. The color of the Heiken Ashi candle is important

as well.

• The signal candle for a buy trade should be white.

• The signal candle for a sell trade should be red.


6

PSAR The green dots that we see above and below the price. The PSAR is the trigger we will use

to signal a trade. The other indicators will have to be lined up at the time of the signal,

and then the signal will be delivered by the PSAR.

Image 3

The PSAR will be used for entry signals and for trailing our stop loss.

• For a long trade, the PSAR will start above the price, and when we get a candle

close with the PSAR under it, we will place a buy trade.

• For a short trade, the PSAR will start below the price, and when we get a candle

close with the PSAR above it, we will place a sell trade.

After a trade is placed, once the PSAR moves past the initial placement of the stop loss,

we will start to trail the stop along the PSAR. (This is usually only going to be the case

when we choose to let the trades run farther than the default take profit).


7

Moving Averages There are two moving averages on the chart.

• The fast green moving average is 13 EMA.

• The slow red moving average is 21 EMA.

Together, they form a trend (or a bias).

Image 4

• When the green EMA is above the red EMA, we are in an uptrend.

In an uptrend, we will be looking to take only buy trades.

• When the green EMA is below the red EMA, we are in a downtrend.

In a downtrend, we will be looking to take only sell trades.

The EMAs are great at determining the trend direction, but the EMAs can quickly change

when the market changes direction. We could be getting signals to take trades in a new

trend direction.


8

MACD The Moving Average Convergence Divergence indicator (MACD) is the default indicator

on the MT4 platform. The part of this indicator we are looking at will be the blue

histogram.

The histogram will either be above the zero line or below the zero line. The zero line (0

line) is the line that runs through the center of the indicator. The blue MACD Histogram

emerges from the 0 line to go up or to go down. Above the 0 line, the histogram is

considered positive, and below the 0 line, it is considered negative.

Image 5

• When the MACD histogram is above the 0 line, we are looking for buy trades

only.

• When the MACD histogram is below the 0 line, we are looking only for sell

trades.

The MACD is a filter that will keep us out of bad trade setups, and setups with less

potential.


9

ADX The ADX is the Average Directional Index.

It generally has 3 parts to it:

• Average Directional Index (ADX)

• Plus Directional Index (+DI)

• Minus Directional Index (-DI)

But for what we need, we will only be using the Plus DI and Minus DI components.

Image 6

The +DI is colored green and the -DI is colored red.

• When the green is above the red, we are looking for long trades.

• When the green is below the red, we are looking for short trades.

The ADX is a twitchy indicator and is pretty sensitive to the market movement. It will

respond to movements before the moving averages, the PSAR, or the MACD will. We can

use the ADX as an alternative exit to our trades, but we will get into this in the Bonus Exit

Methods section of the manual.


10

Buy Trade Rules

• Bullish Moving Average:

Green 13 EMA above the red 21 EMA.

• Bullish MACD:

The MACD Histogram is above the zero line.

• Bullish ADX:

Green +DI is above the red -DI.

• Bullish Heiken Ashi Candle:

The signal candle will be white.

• Bullish PSAR:

PSAR appears under the price.

Setup 1. Moving averages are bullish.

2. MACD Histogram is above the 0 line.

3. ADX is bullish.

4. PSAR is above the market.

Signal 5. Candle is white on the close.

6. PSAR moves below the price on the close of the candle.

Management 7. Buy trade is placed.

8. Initial stop loss is placed 30 pips below the entry.

9. Place 1:1 profit target.

10. Trail stop along the PSAR once it moves higher than the initial stop loss.

*Note Steps 1 - 6 could happen all at the same time on one candle. It's ok to take the trade if

this is the case.


11

Number 1, 2, 3, 4: Setup phase of the market. The moving averages, the MACD, and the ADX are bullish.

Usually, we are waiting for is the PSAR to change sides from above the price to below it,

but in this example, the setup and the signal happen at the same time.

Image 7

Number 5, 6: The signal happens. On the close of the candle, the candle is white and the PSAR dot is

below the price.

Image 8


12

Number 7, 8, 9: After the next candle opens, we place the buy trade. The stop loss is 30 pips below the

entry and the take profit is 30 pips above the entry.

Image 9

Number 10: If at all possible, trade will be managed along the PSAR dots once they move above the

Initial stop loss. (This won't always be possible, but when it is, we will manage the stop

loss along the dots as each new dot appears).

Image 10


13

Sell Trade Rules

• Bearish Moving Average:

Green 13 EMA below the red 21 EMA.

• Bearish MACD:

The MACD Histogram is below the zero line.

• Bearish ADX:

Green +DI is below the red -DI.

• Bearish Heiken Ashi Candle:

The signal candle will be red.

• Bearish PSAR:

PSAR appears above the price.

Setup 1. Moving averages are bearish.

2. MACD Histogram is below the 0 line.

3. ADX is bearish.

4. PSAR is below the market.

Signal 5. Candle is red on the close.

6. PSAR moves above the price on the close of the candle.

Management 7. Sell trade is placed.

8. Initial stop loss is placed 30 pips above the entry.

9. Place 1:1 profit target (30 pips).

10. Trail stop along the PSAR once it moves lower than the initial stop loss.

*Note • Steps 1 - 6 could happen all at the same time on one candle. It's ok to take the

trade if this is the case.


14

Number 1, 2, 3, 4: Setup phase of the market. The moving averages, the MACD, and the ADX are bearish. All

we are waiting for is the PSAR to change sides from below the price to above it.

Image 11

Number 5, 6: The signal happens. On the close of the candle, the candle is red and the PSAR dot is on

top of the price.

Image 12


15

Number 7, 8, 9: After the next candle opens, we place the sell trade. The stop loss is 30 pips above the

entry and the take profit is 30 pips below the entry.

Image 13

Number 10: If at all possible, trade will be managed along the PSAR dots once they move below the

Initial stop loss. (This won't always be possible, but when it is, we will manage the stop

loss along the dots as each new dot appears).

Image 14


16

Bonus Exit Methods

The market can often move farther than the standard 30 pips that we are using, so we

want to find ways to capitalize on these bigger movements.

The default 1:1 target is a great way to trade if there is any question as to the exit method,

but in the following pages, I will show you a few alternatives. These alternatives can

potentially get us more than 30 pips.

Bonus Exit Method 1:

2:1 Take Profit.

Instead of targeting the 30 pips of the stop loss, we will double it and target 60 pips on

the trade.

Image 15


17


Candle Color Change.

We will exit the trade when a Heiken Ashi candle closes in the opposite color.

• Sell trade: when a white candles prints.

• Buy trade: when a red candle prints.

Image 16


18


ADX Exit.

The exit will be when the ADX crosses in the opposite direction of the trade we are in.

• Sell trade: exit when ADX crosses bullish.

• Buy trade: exit when ADX crosses bearish.

Image 17


19


PSAR Exit.

The exit will be when the PSAR crosses to the opposite side of the price.

• Sell trade, exit when PSAR appears below the price at the close of a candle.

• Buy trade, exit when PSAR appears above the price at the close of a candle.

Image 18


20

Conclusion

The Forex Growth Code is a very robust trading system and I think you will really get a lot

out of it. It works best on the 1 hour timeframe, but you are free to try it on other

timeframes as you like. The 30 pip initial stop might have to change somewhat to

accommodate the different candle sizes the different timeframes offer, but I can give you

a starting point.

• 5 Minute = 10 pip stop loss (do not trade out of session).

• 15 Minute = 15 pip stop loss (do not trade out of session).

• 1 Hour = 30 pip stop loss

• 4 Hour = 75 pip stop loss

• Daily = 150 pip stop loss

These will be different from pair to pair and whether or not the market is moving well or

slower. Experiment with different stop sizes and see what you think.

Before you go live with the Forex Growth Code, you want to go through some initial steps.

I don't want you to lose any more than you need to, so begin by simply eyeballing the

system on your charts. Next, try trading it on a demo account. Once you are ready to go

live, trade with the smallest lot size you can, generally 0.01 lots (1 micro lot).

I want you to lose as little as possible, so easing into a new system is always the best idea.

Sincerely,

http://www.tradeology.com

Documents

RISK DISCLOSURE STATEMENT / DISCLAIMER AGREEMENT2018/PDFs/Forex... · RISK DISCLOSURE STATEMENT / DISCLAIMER AGREEMENT Trading any financial market involves risk. This report and