Secrets to Successful Forex Trading

  • Upload
    dlensa

  • View
    276

  • Download
    5

Embed Size (px)

Citation preview

  • 8/9/2019 Secrets to Successful Forex Trading

    1/32

  • 8/9/2019 Secrets to Successful Forex Trading

    2/32

    How I Trade Proftably Every Single Month without Fail

    First of all, let me take some me to introduce myself to you. I am Kelvin and I am a

    full me currency trader. I have a passion for trading and this drives me to create a

    forex blog that gathers a community of traders together.

    Due to constant request from my blog readers asking me to share my trading

    strategies ith them, I took a total of !" months to create a course that teaches you

    all the strategies that I have been using all these years ithout reserve.

    #o that you have subscribed to my nesle$er, you ill be receiving forex tutorials

    from me every month as ell as trading videos that I have specially created to help

    you in your trading.

    In this book, you ill be taught the % secrets to successful trading. Do note that these

    % secrets are all based on my on experience and therefore ill be useful for you in

    your trading.

    &his is a reard for those of you ho really took acon as it shos your

    determinaon in learning this skill.

    'o let me start to share ith you the % secrets to successful trading and at the end of

    this guide book, I shall sho you an (#&)*D secret of the +-D indicator that ill

    greatly improve your inning percentage.

  • 8/9/2019 Secrets to Successful Forex Trading

    3/32

    Secret #1: Power o Suort ! "eitance

    +y secret number ! in trading is support and resistance. +ost ne traders tend to

    ignore the importance of support and resistance because they do not kno that the

    ave like movement of the market is actually the creaon of support and resistance.

    hen the price hits a ma/or resistance for the 0rst me, it ill most probably movesdon 0rst due to the repulsion of that level. It ill then a$empt to break this

    resistance level again and once it manages to break through it, the old resistance

    level ill no turns into a ne support level.

    1ou ill 0nd that the price ill alays comes back to test that ne support level

    before it moves further up. 'uch acon contributes to the formaon of aves in your

    trading chart.

    &herefore as a trader, you must be able to idenfy here the ma/or supports and

    resistances are. ith these level iden0ed, you ill then be able to kno here to

    enter a trade, here to place your stop loss and here to place your target pro0t.

    In this secon of the book, I ill teach you a fe ays to idenfy strong level of

    support and resistance.

  • 8/9/2019 Secrets to Successful Forex Trading

    4/32

    Fibonacci Indicator

    &he Fibonacci indicator is one that is commonly used by instuonal traders and

    therefore the level of support and resistance created by this indicator is more

    signi0cant.

    &he Fibonacci indicator consists of retracement and extension. ll you need to do is

    to drag the indicator from the top to the bo$om of the ave and you ill be able to

    select hich retracement and extension level you ant to sho.

    From my trading experience, retracement level like the 2."34, 2.522 and the 2.6!3

    have more poer than the rest of the retracement levels. s for the extension, it

    depends on the retracement.

    If the price hits the 2."34 retracement level, the price ill usually stop at the !.474

    extension level.

  • 8/9/2019 Secrets to Successful Forex Trading

    5/32

    If the price hits the 2.522 or 2.6!3 retracement level, the price ill usually be

    stopped by the !.522 or !.6!3 extension level.

    8oever if you are able to 0nd level of mulple Fibonacci, that speci0c level ill be

    here you are going to enter a trade.

    Pivot Point

    9esides the Fibonacci indicator, the :ivot point is another indicator that is used by

    instuonal traders. 'imilar to the Fibonacci indicator, the support and resistance

    level created by the :ivot points serve as a strong level of support and resistance.

  • 8/9/2019 Secrets to Successful Forex Trading

    6/32

    For the :ivot levels, you can plot the daily pivot, eekly pivot and monthly pivot on

    the same chart. Do note that the poer of the monthly pivot is larger than the

    eekly pivot and the poer of the eekly pivot is also larger than the daily pivot.

    Swing

    'ings are ; pa$erns. hen you see

    a sing high, the top level ill then formed the resistance level. hen you see a

    sing lo, the bo$om level ill then formed the support level.

  • 8/9/2019 Secrets to Successful Forex Trading

    7/32

    8oever not all sing highs and los are of equal importance, those sings that

    have more depth are considered stronger level of support and resistance than those

    ith lesser depth.

    9elo are some pictures for your comparison.

    &he above are " ays you can idenfy strong level of support and resistance.

    &herefore spend some me to pracce them on your chart today to have a be$er

    understanding of their trading nature.

  • 8/9/2019 Secrets to Successful Forex Trading

    8/32

    Secret #$: Power o Indicator

    &he next secret to successful trading lies in the indicators that you are using as ell

    as ho you use them. +ost traders do not kno the nature of the indicators that

    they are using and therefore 0nds them useless to their trading.

    +y suggeson to you is to learn the various ays to use an indicator as ell as

    learning ho to 0ne tune them to suits your trading plan. 9elo are some of my

    favourite indicators and the ay you can use them in your trading. 'o spend some

    me to go through them no.

    M%&' Indicator

    9efore I start to tell you the poer of +-D, I must spend someme to do a

    introducon on hat is +-D and ho invented it.

    +-D is a forex indicator that is developed by ?erald ppel ho has ri$en !4

    books on investment strategies. 8e is also the president of 'ignalert -orporaon

    hich is an investment 0rm that helps to manages over @4A2 million dollar of capital.

    +-D is in fact one of the simplest and reliable forex indicators I have used so far. s

    it is actually analyBing and displaying chart for past data, it is oCen kno as a lagging

    indicator. 8oever there are mes here you can use +-D as a leading indicator to

    help you predict the next movement of the price.

    1( How to Setu )our M%&'

    &he most common seng for +-D is 46 or !4. hat this means is 46 days and !4

    days Exponenal +oving verages. &he 46 E+ is a sloer seng for +-D hich

    ill produce a sloer indicator that is less prone to hipsas. s for the !4 E+, it is

    usually a faster seng for +-D.

  • 8/9/2019 Secrets to Successful Forex Trading

    9/32

    In the +-D indicator, there ill usually be a A days E+ that ill represent the

    trigger line hile the histogram represents the dierence beteen +-D line and its

    trigger line.

    $( How to "ead )our M%&'

    &here are several ays you can use the +-D to help you in your trade but 0rst of all

    you need to understand ho to read your +-D.

    i) Bullish Crossover:9ullish crossover usually indicates a upard movement in the

    market and the ay you can idenfy a bullish crossover is through the to line in the

    indicator namelyG +-D line and its trigger line.

    henever +-D cut through its trigger line in the upard direcon, it usually

    indicates an uptrend or an upard movement.

    ii) Bearish Crossover:9earish crossover usually indicates a donard movement of

    the price and the ay you can idenfy a bearish crossover is hen the +-D cut

    through its trigger line in the donard direcon.

  • 8/9/2019 Secrets to Successful Forex Trading

    10/32

    iii) MACD Divergence: &his is the best signal any trader can get from +-DH

    Divergence. First of all, let me explain to you hat is +-D divergence all about.

    hen e say that there is a divergence in +-D, e are referring to the scenario

    here +-D and the price are not in the same direcon movement pa$ern.

    E*a+le:hen the highs of a currency pair is geng higher and higher, +-D highs

    are geng loer and loer. e are experiencing something called #egave

    Divergence.

    From my experience, you ill usually see a donside movement aCer a negave

    divergence is formed.

  • 8/9/2019 Secrets to Successful Forex Trading

    11/32

    hen the los of a currency pair is geng loer and loer, +-D los are geng

    higher and higher. e are experiencing :osive DivergenceJ. henever you see

    posive divergence, you ill usually see a upside movement in price.

    ,( How to -e M%&' to For+ Fore* .uy Sell Signal

    It ill be very risky if you trade based on /ust one of the signal you have learn above.

    1ou ill have a more robust forex strategy if you are able to combine these to

    signals above to constute your buy sell signals.

  • 8/9/2019 Secrets to Successful Forex Trading

    12/32

    +-D is a good indicator hen it comes to buy sell signal as it alays allo the

    trader to validate a trend line break or a breakout in price. ith this funcon, +-D

    can help the trader to idenfy fake outs in trading.

    %'/ Indicator

    iding the trend is one of the most pro0table trading strategies you can have as it is a

    good ay of producing high risk reard rao trade and the best ay to 0nd out the

    status of the trend is to make use of the forex adx indicator.

    So 0hy %'/ Indicator

    If you have been reading my blog, you ill kno that I have ri$en an arcle to help

    you idenfy the trend of the market using various forex trend indicators like the

    moving averages. &he moving averages are sll a good ay to tell the trend but they

    are unable to give you a value for the trend and this is here the DL indicator

    comes into play.

    0hat I %'/ Indicator

    It is an indicator that is made up of a single line ith value ranging from 2 to !22. 1ou

    may think that it looks like an oscillator but it is uni

  • 8/9/2019 Secrets to Successful Forex Trading

    13/32

    hen the indicator moves above the 45 level, it is telling you that the trend is

    strengthening and the larger the value, the stronger ill be the trend. 8oever to

    have a be$er understanding of the trend you are in, you need to combine the

    direcon of the indicator together ith its value.

    Sign of a Strong Trend:

    1ou are in a strong uptrend or dontrend hen the DL indicator is poinng up and

    moving above the 45 level.

    http://www.forexindicator.org/wp-content/uploads/2010/06/Strong-Uptrend.png
  • 8/9/2019 Secrets to Successful Forex Trading

    14/32

    Sign of a Weak Trend:

    1ou are not in a strong trend hen the indicator is poinng don and moving belo

    the 45 level.

    http://www.forexindicator.org/wp-content/uploads/2010/06/Strong-Downtrend.png
  • 8/9/2019 Secrets to Successful Forex Trading

    15/32

    2ther -e o %'/ Indicator

    1) Divergence:9esides using the DL indicator for telling the strength of the trend,

    you can also use the divergence of this indicator to arn you of possible retracement

    or reversal. If you have entered a *)#? trade and you see the DL making loer

    highs hile the price make higher highs, this is a good me to exit your trade as a

    retracement or a reversal is going to occur.

    http://www.forexindicator.org/wp-content/uploads/2010/06/Type-of-Market.png
  • 8/9/2019 Secrets to Successful Forex Trading

    16/32

    2) Breakout Strength:1ou can also make use of this indicator to help you trade

    breakouts. &he problem ith most breakout traders is fake out hich is the false

    movement of the market leading most inexperienced traders to enter a trade and

    then stopped them out by reversing the movement.

    http://www.forexindicator.org/wp-content/uploads/2010/06/ADX-Divergence.png
  • 8/9/2019 Secrets to Successful Forex Trading

    17/32

    With the ADX indicator, you will now be able to check if a breakout is valid or not.

    When you see the price breaking out of a pattern or trend line, you can immediately

    check your indicator to see if it is pointing up and moving above the 25 level. A valid

    breakout will be formed when the ADX indicator is pointing up and moving above the

    25 level and an invalid breakout will be the opposite.

    I hope that you 0nd this indicator useful for your trade and eventually integrate it

    into your trading plan. If you have other uses for the DL, do share ith us by

    commenng belo. I hope that this blog ill eventually become the place here

    traders share their knoledge and everyone can learn from one another.

    http://www.forexindicator.org/wp-content/uploads/2010/06/Validate-Breakout.png
  • 8/9/2019 Secrets to Successful Forex Trading

    18/32

  • 8/9/2019 Secrets to Successful Forex Trading

    19/32

    From the picture above, you can see that the market move higher hen --I reaches

    the O!22 level and vice verse.

    2) As a reversal iden!"erQ &here are basically " ays you can make use of the --I

    indicator to idenfy reversal and I am going to go through one by one in detail.

    a( Trend 3ine .rea4:1ou can make use of the --I to dra trend line and once you see

    the trend line being breached, you are going to see the market moving in the

    direcon of the breakout.

    http://www.forexindicator.org/wp-content/uploads/2010/05/Strong-Trend.png
  • 8/9/2019 Secrets to Successful Forex Trading

    20/32

    b( &&I 'ivergenceH 'imilar to +-D divergence, the --I also produces posive and

    negave divergences. hen you see the market making higher highs hile the --I

    making loer highs, you are in fact seeing a negave divergence. &his is usually a

    signal that the market is going to move don but the me it takes for the don

    move may vary and you should not assume that it is coming in the next fe candles.

    http://www.forexindicator.org/wp-content/uploads/2010/05/TrendLine.png
  • 8/9/2019 Secrets to Successful Forex Trading

    21/32

    If you see the price making loer los hile the --I making higher los, it is a sign

    of posive divergence and the market is going to produce an upard movement

    soon. 'imilarly, you should not assume that it is going to happen very soon.

    http://www.forexindicator.org/wp-content/uploads/2010/05/Positive-Divergence.png
  • 8/9/2019 Secrets to Successful Forex Trading

    22/32

    c( 2verbought ! 2verold:'imilar to the 'tochasc and the elave 'trength Index,

    the --I can be used as an oscillator. hen you see this indicator moving above the

    O422 level, you are in an overbought Bone and you can place a '8)& trade hen

    you see the --I crossing belo the O!22 level.

    hen you see the indicator moving belo the http://www.forexindicator.org/wp-content/uploads/2010/05/Negative-Divergence.png

  • 8/9/2019 Secrets to Successful Forex Trading

    23/32

    owever there is nothing that works !""# of the time and below is one such e$ample

    http://www.forexindicator.org/wp-content/uploads/2010/05/Overboughtdunwork.pnghttp://www.forexindicator.org/wp-content/uploads/2010/05/Overbought.png
  • 8/9/2019 Secrets to Successful Forex Trading

    24/32

    &he --I indicator has been a great help to my trading so far and it can be integrated

    into various type of trading methods due to its mul

  • 8/9/2019 Secrets to Successful Forex Trading

    25/32

    %) The Sile Moving Average 'SMA)

    How to Setu )our .ollinger .and

    :ersonally, I alays sck to the default seng for my 9ollinger band hich is the 42

    days '+ and plus minus 4 x standard deviaon for the upper and loer bands.

    8oever you can also ad/ust the seng if you 0nd the price constantly penetrang

    the upper or loer bands.

    0hat .ollinger .and &an 'o For )ou

    &he upper band usually indicates a resistance level hile the loer band usually

    indicates a support level. If you take a close looks at your 9ollinger band. 1ou ill 0nd

    that the price usually bounce o the 9ollinger band henever it touches the upper

    or loer band.

    ith this observaon, you can use the upper and loer bands as support and

    resistance hen planning your trade.

    9esides using the upper and loer bands as the support or resistance, you can also

    make use of 9ollinger bands to help you measure the volality of the market.

    hen the upper and loer bands are narro, you are actually in a period of

    consolidaon and hen the bands are idely apart, you are in a period of strong

    price movement. In my next post, I ill sho you the various uses of forex bollinger

    http://www.forexindicator.org/wp-content/uploads/2010/01/Explain.png
  • 8/9/2019 Secrets to Successful Forex Trading

    26/32

    bands in trading and ho you can make full use of its feature to help you in your

    trading.

    %T" Indicator

    &he average true range =&> indicator is developed by R.elles ilder and it is used

    to measure the volality of a currency pair. (nlike the other forex indicators e have

    ent through so far, the average true range =&> indicator does not provide any

    indicaon of the price movement.

    &here are a total of " dierent ays you can calculate the average true range =&> of

    a currency pair.

    ecent 8igh minus the ecent *o

    ecent 8igh minus the previous -lose

    ecent *o minus the previous -lose

    8oever the value that you ill use as the true range ill depend on hich of them

    are larger. ith your trading plaNorm, there is usually no need to calculate these

    values yourself. 1our trading plaNorm ill help you to calculate the value and plot it

    into a graph.

    So How &an )ou -e the %verage True "ange 5%T"( Indicator

    lthough this indicator cannot give you an indicaon of the direcon of the market

    movement, it can be a good tool to help you verify the strength of the current

    market.

    hen the & indicator is shoing small values, it is usually a sign that the market is

    consolidang or moving ith small movement aing for a breakout.

    hen you see the & indicator shoing you large value, it is a sign that the market

    is trending strongly or you are in a valid breakout.

  • 8/9/2019 Secrets to Successful Forex Trading

    27/32

    If you are a breakout trader, this indicator can be a great tool to add to your trading.

    hen you see the & shoing small values, you ill ait for a breakout to occur.

    )nce you see a trend line break together ith rise in the &, this is a good sign of a

    breakout occurring.

    9esides using the average true range indicator as a breakout tool, you can also use it

    in trend trading. hen you are performing trend trading, you can use this &

    indicator to help you verify hether you are in a strong trending market or not.

    http://www.forexindicator.org/wp-content/uploads/2010/08/Average-True-Range-Example.png
  • 8/9/2019 Secrets to Successful Forex Trading

    28/32

  • 8/9/2019 Secrets to Successful Forex Trading

    29/32

  • 8/9/2019 Secrets to Successful Forex Trading

    30/32

  • 8/9/2019 Secrets to Successful Forex Trading

    31/32

    -an you see the poer of this risk reard raoS Even hen you only in 52P of the

    me, you are sll making @!,622 per month. If you are trading 4 standard lots per

    trade, you can make up to @",422 per month.

    &he reason hy I am able to generate pro0t every single month is because all my

    trading strategies has a inning percentage of more than 72P and it has a risk

    reard rao of at least !H4.

  • 8/9/2019 Secrets to Successful Forex Trading

    32/32

    Secret #=: -ntold Secret o M%&' Indicator

    s promised, I shall be sharing ith you one untold secret about the +-D indicator

    that you ill not 0nd elsehere.

    &his is a technique that I have realiBed over these years of trading and I ill like to

    take this opportunity to share ith you.

    -lick belo for the video tutorial that I have prepared for you regarding the +-D

    indicator.

    h7:88www9ore*trainingclaroo+9co+8+e+ber8ore*video$tutorialAat+acd

    &oncluion

    +aking money from forex trading is not as hard as hat most people think but it is

    also not that easy. 1ou ill need to be paent and is illing to spend me to learn

    and pracce hat you have learned.

    It took me A months to eventually make my 0rst dollar in forex but since then, I am

    able to generate consistent income for myself every single month ithout fail.

    &herefore it is de0nitely orthhile to spend the me to learn and pracce forex.

    %ll The .et

    3ee Belvin

    http://www.forextrainingclassroom.com/members/forexvideo2tutorialflatmacdhttp://www.forextrainingclassroom.com/members/forexvideo2tutorialflatmacd