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					Forex Profit Harvester
Prepared by: Frank Lucas - Pips Pulling Machine Team
    Hallo and welcome to my video. I am Frank Lucas from
the Pips Pulling Machine Team and I am planning over the
next few minutes to introduce to you a powerful FREE Forex
trading strategy. I am sure you will be delighted by the Forex
Profit Harvester (FPH) which will help you capture serious
quantities of pips on a regular basis. I and many others have
already enjoyed its benefits.


    Before explain my system in depth, let me first provide
you with some fundamental guidelines that have helped me
progress from losing my hard-earned money from Forex
trading to becoming a pip pulling pro. These ideas will help
you as well gain an appreciation of the central concepts
behind the Forex Profit Harvester.


    You should also find that these powerful ideas will
provide you with the momentum to advance your Forex
career in leaps and bounds. For instance, you may be
surprised to discover that many major Forex institutional
trading companies only utilize a maximum leverage of
10:1 and risk less than a maximum of 1% of their
entire account balance per trade and even less in most
cases.
    This is because they appreciate and respect Forex and,
as such, place the control of their risk exposure as their
number one priority. In comparison, most Forex novices
attempt to utilize leverage facilities that often exceed
100:1 and risk well over 2% of their balances per
trade.



    In addition, they take these actions even though they do
not fully understand how to trade Forex successfully. As you
can readily conclude, this is a recipe for disaster. Beginners
just dreams of the profits that they can make without paying
any serious attention to the dangers and complexities that
Forex poses.



    If you identify yourself with the latter group, is it still
worth your time and effort elevating your Forex trading
skills? I asked this very question many times during my early
trading years before discovering the following concepts that
have laid the foundation for my belief in Forex trading. Let
me share them with you now.
              Awesome Daily Turnover


    Forex possesses a gigantic daily turnover which is
reputed to be in the region of $3 Trillion daily. This
staggering figure should certainly be enough to capture your
attention and provide enough incentive for you to stay
onboard and last the course.


         The Power of Compound Interest


    When Albert Einstein was asked what did he think was
the most powerful force in the universe, he replied that he
thought that it was compound interest! Just for
clarification, you will experience compound interest
everytime your profits are added to your account balance.


    This means that from that time onwards you will earn
interest on your new balance which is equal to the old one
plus your profits. For instance, Forex trading presents you
with the possibility of compounding your money on a daily
basis.
     By continually reinvesting your profits back into your
trading, you can potentially achieve significant financial
growth within a relatively short period of time.


     Once you realize that there exists no better opportunity
than Forex to use compound interest to grow your account
balance rapidly, then you too will acquire the drive to strive
on and master this amazing subject. You should be excited to
know that my Forex Profit Harvester harnesses this concept
to the full.


     The following chart demonstrates vividly how compound
interest can grow your account balance exponentially.
    Grasping such insights into the size of the potential
profits available from Forex trading provided me with the
energy and incentive to understand and master as much
Forex information as I could. My Forex Profit Harvester is one
of the successful products that arose from all my efforts and
studies.


    I would now like to take a few more minutes to
introduce you to a few more important concepts that are
inherent features of my trading system.


  The Importance of Risk and Money Management



    You need to understand as soon as you can that
minimizing your losses must always be your number one
trading priority. A well-tested Risk and Money Management
Strategy can help you achieve this objective. In addition,
such a tool can prevent you from selecting bad position sizing
which can lead to excessive losses.
     In other words, if you use a Risk and Money
Management strategy well then it will prevent you falling into
the temptation of over-trading by selecting position
sizes that are too big for your account balance to
handle comfortably.


     For example, how would you respond to this simple
question? Assume you have a balance of $5,000 to trade,
how much of this amount would you risk on your next trade?
Some of the common answers are as follows:-


  1. 25%, because if I can suffer 3 losses I can still recover.


  2. Others replied, ’I would risk half because should I lose,
     then I still have the other half remaining‘.

     However, these replies indicate that their authors do not
understand that their losses can compound rapidly. You must
always remember this important point. For example, consider
that you risked your entire balance of $5,000 on one trade
and lost 50% as a result. You will now have only $2500
remaining and will require your next trade to realize a 100%
profit just to recoup your losses and return your account
back to its original value.
     Every time you suffer a 50% loss, you then need a
subsequent 100% win to recover. Should you endure two
consecutive 50% losses, you would then be left with $1,250.
This means that that your next trade must return a 400%
win just to regain your original account value. The following
chart illustrates this effect graphically.




     You are well advised to drum the following concept into
your head which states that a loss always requires a
bigger win to recover. For instance, if you risked 10% of
your $5000 per trade and suffered 10 consecutive losses,
then you would be left with only $1700 of your account.
    If, instead, you risked only 2% per trade, then you
would still have $4,100 after ten losses. Clearly the second
option provides you with far better protection. This is why
expert consensus recommends that you should not risk
more than 2% of your account per trade.


    If you are prepared to adopt the right attitude, then you
will find that Forex trading is a very worthwhile pursuit which
can be a very profitable activity. This is because you can
achieve above-average returns if you are able to control its
above-average risks. I am very glad that I invested my time
to master this intriguing subject.


    In addition, you will discover that your free version of
the Forex Profit Harvester includes an innovative risk
and Money Management Strategy that will cultivate and
grow your account balance in leaps and bounds.


        Learning to Control Your Emotions

    When trading Forex, you cannot allow your rational
trading judgment to become heavily influenced by your
feelings at any time.
     For instance, you must not give way to despair and
frustrations if you are suffering losses. Similarly, if you are
winning then you must not permit greed and over-excitement
to cause you to become over-confident and start overtrading.


     You will attain larger Forex profits consistently if you
concentrate on utilizing your new Forex trading strategy with
discipline and confidence. When trading Forex, you will have
to cope with a series of complex situations that will require
you to react with quality trading decisions.


     You will find that that trading can be difficult if you try to
make your trading decisions using your gut instincts only.
This is one of the main reasons why Forex experts advise
that a strategy should be used for trading comprising a set of
trading rules that have been well-tested.


     You will discover that your free Forex Profit Harvester
meets this requirement exactly and as a result will
help you capture large quantities of pips regularly.
     Introducing the Forex Profit Harvester


    Let’s know delve into my trading strategy which I will do
in a series of simple steps. Basically, I intend to first define
for you each component required to create a Forex strategy
before presently the specific selection (in blue) for the Forex
Profit Harvester.

    To   begin      with,   however,   you   need   to   state   the
requirements for a trading strategy that the components will
need to satisfy. For instance, should you ever decide to
construct your own trading strategy then experts recommend
that you should base it on the following 3 key points:



    If you can lay the foundation of your strategy on the
following requirements, then you will greatly improve your
chances of profitable Forex trading. I have done exactly this
when constructing the Forex Profit Harvester.
                    • Identify a technique that will detect good quality
                     trading opportunities possessing minimum risk and
                     excellent profit potential.
      Inputs




                    • Construct an exit strategy that will maximize your
                     profits.
   Exit Positions




                    • Design a strategy that can distinguish false set-ups
                     or signals from real trading opportunities as
                     accurately as possible.
    Protection




    I then used the following steps to achieve this objective.




     1. Choosing the Optimum Time Frame

    When selecting this parameter, you need to determine
how much available time that you will have daily to trade
Forex.
     For example, you will have to reserve a serious
proportion of your daily time to monitor your open positions
if you intend to utilize strategies such as scalping that use
the very short time frames, e.g. 1, 5, 15, 30 minutes. If you
are a Forex beginner then you should strongly consider
basing your strategy on the longer time frames such as the
hourly or daily.



     This is because you can then make use of the superior
statistics that are associated with these longer time frames
that can help you identify price formations more easily.
Consequently, you will be able to define your risk exposure
better for each trade that you open which will assist you in
achieving the maximum protection for your equity.



     My Forex Profit Harvester uses the DAILY time frame
because the statistics generated by this time frame are very
reliable and accurate. In addition, this timeframe as the
benefit of being great for those traders who do not have the
time to monitor Forex trades during the day.
        2. Selecting a Technical Indicator


     You will find that you can chose from a vast array of
technical indicators, such as the Simple Moving Average, the
Relative Strength Index, and the Stochastic Oscillator, etc.
Fundamentally, you will need to experiment with as many as
possible in order to determine the ones that produce the best
quality trading opportunities for you.



     You   can perform     this task     by   adjusting   the key
parameters of each of your preferred technical indicators
using a demo account. After each test, you will then need to
re-evaluate the performance of the technical indicator by
calculating the new key performance parameters of your
trading strategy, such as its win-to-loss ratio.



     The Forex Profit Harvester utilizes the Exponential
Moving Average EMA (9, close) and EMA (50, close) as its
primary technical indicators. The following diagram
demonstrates them in action using the daily time frame.
       3. Which Currency Pair/s to Trade


    Choosing this component is very important because
each currency pair possesses its own trading dynamics and
behavioral patterns. If you are a Forex beginner, then you
are advised to trade just the EUR/USD currency pair to begin
with until you become more experienced.
    This is because you will then be able to take advantage
of a number of major attributes that this currency pair
possesses such as its constant high liquidity and low spreads.
You should also realize that nearly 80% of all Forex
transactions include the EUR/USD.



    You should always aim to select currency pairs that
exhibit the lowest spreads. You will find that the EUR/USD is
always a good choice because it often possesses one of the
smallest spreads possible. The following diagram shows a
spread of just 2.5 pips for the EURUSD, which is the
difference between the SELL and BUY prices.
    If you attempt to trade other currency pairs possessing
wider spreads, then you will find that achieving a consistent
profit is a much harder task. The following diagram shows
that the EURCAD has a spread of 4.2 pips whilst the NZDJPY
has one of 4.0 pips.




    For example, if the present spread of a currency pair is 6
pips, then you have to gain a profit of at least this value just
to achieve breakeven. This is one of the main reasons why
you are recommended to trade the EUR/USD because its
spread is normally 3 pips or less.



    The EUR/USD also enjoys high liquidity. This means that
you will always be able to open positions whatever you want
to because there will be other traders present to support
your transactions.
    I have designed the Forex Profit Harvester so that you
can trade using any of the major currency pairs i.e.,
EUR/USD, USD/YEN, GBP/USD, USD/CHF, USD/CAD and the
AUD/USD. They are shown in the following diagram:




    However, if you are a novice to Forex trader then I
strongly recommend that you should start trading my Forex
Profit Harvester by using the EUR/USD currency pair for the
reasons outlined above.
            4. Confirming Entries and Exits

    Once you have completed the first three steps, you will
then have a basic strategy which has been constructed using
your choice of time frames, technical indicators and currency
pairs. At this point, you should be able to identify good
quality trading opportunities possessing minimum risks and
optimum profits.


    However, you now need to safeguard your account
further by    providing   increased   protection   against false
signals. You can do this by designing a confirmation
technique which you can then integrate into your trading
strategy.


    You can be accomplished this task by investigating other
technical indicators that complement your primary one and
that can generate verification signals. You must not omit this
important step because it will provide additional protection
for your account.
     The Forex Profit Harvester uses support and resistance
levels to act as its confirmation tool. As these levels will be
produced on trading charts using the Daily time-frame, you
can be assured that they will provide very strong indications
that price has the potential to proceed further in its current
direction.


     The following chart demonstrates this technique in
action by clearly identifying key resistance and support
levels.
     You must take these extra measures to safeguard your
account from serious price reversals and fakeouts. You
should take careful note that this important step will provide
you with increased confidence that your new positions will
possess the maximum potential to succeed.




               5. Entry and Exit Rules


     Our next task will be to define a set of rules which you
can easily use to identify the entry and exit points of new
trading opportunities.



     The Forex Profit Harvester is based on the following very
simple and easy-to-use set of entry and exit rules detecting
the openings and closings of all trading positions:



1.   BUY positions will only be entered when the currency
     pair is moving in a BULL trend. You will be able to detect
     such situations everytime EMA9 is above EMA50 as
     shown in the next chart.
2.   Under bullish conditions, you should then open a new
     position once price has first broken through Resistance
     Level 1 and then attained an additional 20 pips.



3.   You must close your position once price touches
     Resistance Level.
     The following chart shows point 2 and 3 in action.




4.   Sell positions must only be entered when price is in a
     BEAR trend which you can confirm by detecting that
     EMA9 is below EMA50 as shown in the next diagram.
5.   Under bearish conditions, you should then open a new
     position once price has first broken below S1 and then
     achieved an additional 20 pips.



6.   You must close after price reaches S2.
     The following chart demonstrates points 5 and 6 in
action.




7.   Only risk a maximum of 2% per account equity per
     trade. An example about how to do this is presented in
     section 6 shortly.
                         Example 1:


     On the following EUR/AUD chart, you will first observe
that the EMA9 is lower than the EMA50 which implies that
you must only open SELL positions. Such a trade was
activated on the 20th of August 2010 after price penetrated
the S1 level at 1.4263 by a further 20 pips.

     On the 23rd of August 2010, the position was closed
after price achieved S2 realizing a profit.
                         Example 2:



    In the next example, you can once again confirm that
price is in a bearish trend because EMA9 is below EMA50 on
the USD/CHF daily trading chart. You should then note that a
new SELL position was opened on the 26th of August after
price dropped below S1 at 1.0259 by a further 20 pips.

    On the 31st of August 2010, the trade was terminated
after price touched S2 located at 1.0192 achieving a profit.
    You should not concern yourself if you are having any
trouble understanding how the Forex Profit Harvester fully
operates. This is because, in my next training video, I will
provide you with more insights and tools that will make all
the above tasks become much easier to understand as well
as aiding you to trade much faster and profitable.

    I will also provide more live trading examples so you can
understand the workings of the Forex Profit Harvester much
better. So just keep an eye for my next email as you will find
that my next training video will be both very informative and
exciting

           6.   Minimizing Your Risk Exposure



    I have already advised that you simply cannot ignore
this aspect of trading. You must devise a simple money
management strategy so that you will know precisely what
your risk exposure will be for every position that you open.

In addition, you should only execute new trades if you have
determined that your predicted reward will be at least double
that of your maximum loss.
    In fact, a risk-to-reward ratio of 1:3 or higher is
preferable. As such, you will need to know exactly where to
locate your stop-losses and targets even before you open
new positions in order that you can satisfy this requirement.



    The Forex Profit Harvester risks a maximum of 2% of
your entire equity per trade. This requirement implies, as
stated above, that you need to always know precisely the
size of your position and stop-loss even before activating any
new trades. You can calculate these two parameters so that
they comply to your risk strategy as follows.


    Assume you have an account balance of $50,000 and
each 1 pip movement is worth $1. In the diagram below, the
blue bull candle on the 1st of September surged above
Resistance Level 1(R1) by an additional 20 pips. At that
point, you should open a new BUY position as near to the
price of 0.8986 as possible.



    You need now to calculate your position size so that you
will only risk a maximum of 2% of your total equity. The
diagram below illustrates how you can do this.
     For example, you could opt to locate your stop-loss
below S1 by a distance of 24 pips. You can now calculate
your position size by using the following formula:

Position Size = (%risk X free_margin) / (pip_value X stop_loss)

     Assuming that you have no other trades open, your free
margin will equal your entire equity, i.e., $50,000.

     The size of your stop loss equals 0.8986 – 0.8816 = 170
pips.
Account_Balance = $50,000 USD           PIP_Value: $1 USD

Stop_Loss (SL): 170 Pips                %Risk: 2%



Position size = (%risk X free_margin) / ((pip_value X stop_loss))



Position size = (0.02 X $50,000) / ($1 X 170) = 5 lots



     Note that your Position Size is rounded down to the
nearest whole figure in order to ensure your new trade
complies with your risk strategy.



     Consequently, if your 5-lot position was stopped out,
then you will endure a loss of 5 X $1 X 170 equaling a total
loss of $850, which complies with your 2% maximum risk
strategy, i.e. 2% of $50,000 = $1,000.



     If you follow that above six steps carefully, then you will
be able to start designing your own strategies in just the
same as I have done to produce the Forex Profit Harvester. I
would now like to introduce you to some an additional skill
that will enhance your Forex experience.
                  Trading Professionally

     In order to satisfy this objective, you will need to
enhance your patience and learn specifically to concentrate
on the risks involved when you open a new position as
opposed to its potential profits. Why does patience play such
an important role in trading? To answer this question, you
should compare the different ways that experts and novices
use to trade.



     For example, novices constantly seek excitement by
having a tendency to trade a large number of positions using
the shorter time frames, i.e., 1m, 5m, 15m, etc. As such,
they have a leaning to open new positions prematurely at
high levels of risk.



     In contrast, experienced traders know that the
effectiveness of important price levels such pivot points,
resistance, and support levels reduce dramatically as time
frames shorten.
     When I am trading the Forex Profit Harvester, I
constantly seek to achieve only realistic targets and do not
attempt to achieve the impossible. As such, I strive to exert
patience consistently. In fact, the Forex Profit Harvester
encourages such an approach because, for one reason, it is
based on the daily time frame.



     You will be able to confirm after using the Forex Profit
Harvester for a while that important indicators such as
resistance and support levels are far more effective when a
longer time frame is used. You will also discover that my
system is very helpful in enabling you to carefully select the
entry points of new trading opportunities so that the
maximum risk per trade will be compliant with its risk and
money management strategy.



     Your new FREE Forex Profit Harvester will not make you
expend excessive quantities of time and energy pursuing
trades with little real profit potential. Instead, you will be
encouraged to only activated new positions after making
decisions based on the superior statistics attributed to the
daily time frame.
     Consequently, although you may open fewer positions
than with other strategies, you will discover that they will be
of much higher quality.

     In the next training video I will provide you with a more
in-depth understanding of the operation of the Forex Profit
Harvester. In addition, I will also give-away another free
simple trading strategy which will again increase your ability
to capture large quantities of pip profits constantly.

     I will also provide many more live trading examples so
you can understand the operation of the Forex Profit
Harvester much better. So please stay tuned for the next
training video. I hope you enjoy this one in which I have
presented to you a FREE trading system that works under
many different market situations.

     This is just a small present from me to you to show that
I am really keen to assist you in attaining serious profits from
Forex trading. Soon, I will introduce to you a more powerful
Forex trading system as well as software that will increase
your trading profits in leaps and bounds! Thank you for
listening to my video!

				
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