Docstoc

Archive Calls lotting paper

Document Sample
Archive Calls lotting paper Powered By Docstoc
					                            Created from the 4XME Archived Calls

                                      http://64.160.247.135



IF you feel that by reading this document, you don‟t have to listen to the Archived Calls, well, I
disagree with you.

What this document does for you is that while you are listening, you may add your own notes,
either as additions and/or clarifications. As you do this, clarity should come quickly, enhancing
your learning curve of 4XME.

IF you read something that you do not understand, don‟t skip over it. Find out why and dig until
in your own mind you have clarity and know what this document spells out. Some information
is a combination of both the Archive and the DVD training set.

These notes were compiled by „hovnme‟ – if you have a question, don‟t hesitate to drop me a
note. I‟ll either correct or explain it.

                                      hovnme@yahoo.com



                         Archive Calls 1 through 17




                                               Hov




Mark and Mark have asked that before participating in the Live Chat sessions, you complete the
Archives and view the DVDs at least once. I am sure this is because after you have done this,
the „live‟ sessions are much more meaningful.




                                                 1
1 - Overview and Background of the Forex Market

According to Derek Hughes – the best times to trade the 4X market are

      Open of USD market -           0800 ET                0700 MT
      Close of JPY market -          0200 ET                0000 MT

Why trade the 4X market?

      Largest market in the world
      D
      Very liquid market
      24 hour a day trading
           o Best trade times       1300 – 1500 for EUD
           o                        0600 – 0800 for the JPY
      Volatility
           o No price gapping with possible exception on Friday and Sunday afternoon
      Outperforms any stock market
      Don‟t need lots of money (Stock traders who Day trade need $25,000.00). 4X can go
       with very little
      Leverage – lowest margin, highest leverage in 4X
      No market manipulation like stocks and options with the market makers
      Have an excellent trend analysis tool in 4X

Specify PIPs for order to get you filled and not skipped

      Pips or points when entering – 2, 3, or 4 – even if market is fast moving, if the price
       passes through your specified price, you will get filled.

2 – Forex Basics and Terminology

Currency Pairs

      BASE currency is on the left
      COUNTER currency is on the right
           o CROSS is used interchangeably with “counter” – it is a Cross Currency Pair, or,
               the Counter currency (on the right)
      BASE is dominant – drives direction of the trade.
           o Example – EUR/USD
                    Going LONG = GREEN = UP on EUR (base)
      IF Base is stronger than Cross – the trade will have an UP trend – GREEN lights
      IF Base is weaker than Cross – the trade will have a DN trend – RED lights
      IF lights are all the same color, a possible trade

      BASE currency ALWAYS = 1 (using EUR as example)
          o So if EUR/USD PAIR is trading @ 1.3297, that means that
            1 EUR = 1.3297 USD
          o It is the CROSS (on the right) that ALWAYS fluxuates.
      To BUY (to Open) – GREEN lights at the ASK

                                                 2
          o To Close you SELL at the BID
      To SELL (to Open) – RED lights at the BID
          o To Close you cover at the ASK (offer)

There is no “up-tick” rule like with stocks or options

SPREAD

      Difference between the ASK and the BID
           o On a Mini account, you will usually pay an extra PIP for the trade

Who Are The “Majors”

      “Majors” are the “major” currency pairs
           o These have USD on either the left or the right, plus
           o Mark includes the NZD – that would make 7 majors
                    AUD usually moves with the NZD
           o The “Majors” account for about 80% of all trades in 4X
      What is difference in the Majors
           o Majors usually have a spread near 5 PIPs
           o Minors can have spread around 15 PIPs
      If you are a “Scalper”, keep your spread around 4 to 5 PIPs

What is a PIP

   o Farthest decimal number on the right – smallest amount

What is a LOT

   o Mini account – 1 LOT = $100 which controls $10,000
   o Standard account – 1 LOT = $1000 which controls $100,000
        o 100 : 1 leverage

Market Order – filled instantly

   o Filled order can NOT be cancelled
   o Only a Stop or Limit order can be cancelled

Leverage (because of it, do a LOT of paper trading WITH Money Management)

   o While paper trading, START with $1000 Mini demo account
   o Should be able to increase that to $2-3000 in 1 month. When you can do that, go live.
   o Deal in 1 LOT trades and go for consistency

Limit Order

   o It is the
          o Minimum price you are willing to PAY, or
          o Maximum price you are willing to accept
   o Your STOP must be ENTERED IMMEDIATELY

                                                 3
Stop Loss Order

   o Long (buy) – Put STOP 10 pips BELOW
   o Short (sell) – Put STOP 10 pips ABOVE


3 – Training Resources for Learning 4X Made Easy

      Software
          o Enclosed is DVD/VHS – gives highlights
          o In 4X, is the Tutorial. MUST become familiar with 4X and this helps immensely.
              This is your “Owners Manual.”
          o 3 Day WizeFest convention with great training classes, 1 day free classes for life,
              2 day power class live in the market.

      On 4X Made Easy home page (in your browser)
          o GlobalTecTalk newsletters (down right side of page) – over 30 articles written by
              the experts to help you learn 4X, chart recognition, analysis, etc.
          o Product tab - Extra tools. One good trade can pay for a tool
          o Support tab
                   4X Talk Live – live radio, plus
                   Archives – like this document
                   Community support – Yahoo users group message board
                   Technical Support – computer problems, etc
                   OR – down right side, Live Tech Help – a tech can actually control your
                      computer and solve problems, answer Q, etc.
      About 4X tab
          o FAQs
          o Glossary of terms (copy and paste this into a document – excellent)
          o Time Chart – when markets are active
          o Calendar – Events by date which affect the 4X market, what currency – this page
              is priceless.
      Events tab
          o A list of all events (training included) which are available as a resource for the 4X
              user.
          o 1 Day Training – as many as you want to attend, FREE for live
          o 2 Day Training – this is not free, but worth its weight in gold. Live in the market
              “hands on” actual trading. Always sold out way in advance.

When You Purchase the Software

      You are really purchasing SUPPORT and TRAINING for life, not a software package.
      All upgrades to the software are free for life.
      DVD training set is free – really gets the user up and running




                                               4
4 – Placing Orders with FXCM Trading Station

      Some users prefer InterbankFX – the feeling is that FXCM sometimes manipulates trades
       to stop a person out. Talk to other users to clarify this comment.

We bypass this page because of the controversy re FXCM. However,

      REFCO has not bought out FXCM – they only have a 30% position
      For those who like to “scalp”, notify FXCM and use a different platform that they offer to
       avoid “execution delays” users have experienced


5 – Navigating the 4X Made Easy Software

New features in Ver 6.0

Trading screen

      Hot keys
          o CTRL U – Tutorial screen
          o CTRL Q – Quick Quote screen
          o CTRL M – Money Management screen
          o CTRL C – Charts screen
          o CTRL R – Trade Vault screen
          o CTRL P – Parameters screen
          o CTRL T – Trading screen

      Currency pairs in upper right
          o Can click and drag onto a Currency Pair button on lower screen for it to be seen in
              the Trading screen

      File menu
           o Force Upgrade

      Left Click on currency pair button opens ALL Exchange Pairs
      Right Click on currency pair will REFRESH that pair
      On Trading screen,
          o Put cursor over the P/L field – this will show the formula for its calculation of the
               trade profit/loss
                    (Entry price-Current bid)*# lots*PIP*100*10
      Enter a paper trade
          o Click on diskette under the ASK price
          o Enter Lot size and Save – you have a trade

Trade Vault screen (CTRL R)

      Can archive – simply click on the “pages” icon lower right of window – puts Trade Vault
       info into an Excel spreadsheet.
      Tom and Marie Sanders – enter trades into trade vault to find fastest growing currency
       pair – which ever made most profit the fastest was the one they traded live.
                                                5
      Display Options – controls what the Trade Vault will display

Quick Quote screen (CTRL Q)

      Streaming information
      Arrows show the LAST move of the pair
      Volatile Period – red triangle appears. Will also appear on the Currency Pair in the
       Trading window. Indicates a volatile period in that pair
           o Watch the volatility bars.

Money Management screen (CTRL M) (also called the Money Management Calculator)

      Be sure Current Balance is accurate
      Establish Type of account and Trade Style (new traders should start with a $1000 “Mini”
       account
      Calculates your Stop Loss and the Limit
      Be sure to click the RECALCULATE buttons if you change a parameter

Chart screen (CTRL C)

      Can click and drag one of the nine currency pairs (upper right) to the button to view that
       pair. Allows you to see that chart without changing the pairs listed on the Trading
       window
      Clicking on the mini “chart” (bottom left of chart) opens a mini screen. Can have
       multiple pairs or charts open.
      Show Data – shows data for the time frame your cursor is in.

Parameters screen (CTRL P)

      Have either pre-set lights, or can set up your own parameters
      Header Pairs – these are the 9 currency pairs in the upper right of all windows
      Popup Configurations – not real clear in the Tutorial – these are pop-up charts
           o Use the mini chart on the Charts page – this opens a mini window.
           o Open as many or few as you like
           o Position them as you want
           o Now SAVE that config for recall
      Interval update – use 15 or 60 seconds – better for 15 seconds for rapid updates
      Chart Exchange Pairs – selecting Page 1 & 2 helps screens populate faster.
           o Also, will show ONLY those pairs listed on the Trading window rather than all 17
               pairs

6 - Trend Analysis and Chart Reading Vol. 1

      Cross Over and Bounce
          o Red or Green crosses over the other
          o The Green line tells us whether it is a Long or Short call
      Bounce
          o Green line approaches the Red line, does not have to cross, but then turns and
              must meet two criteria to be a legitimate bounce:
                  Increased angle and
                                                6
                    Increased separation
      Curve movements
           o The curves are fixed except on the far right end
           o When there is a new time frame on the right, you will lose one time frame on the
              left
           o Volatility can be seen more clearly on the shorter minute lights
           o A chart with increasing separation will not turn on you quickly
                    Increasing separation indicates stability in the move
      Anticipated Cross-overs
           o “If you anticipate a cross, you anticipate a loss.”
           o DON‟T trade outside the parameters of F.A.S.T.
           o WAIT for the cross before entering the trade
           o This software is NOT predictive – it tells you in real time what is happening
              relative to buying and selling pressure.
           o “Foundation” or “Trading” window is the fourth arrow to the right
           o “Entry” or “Trigger” window is the second arrow to the right
           o Wait for the F. and you get A. and S. before entering. Chances are much better
              for a successful trade
           o “Waves” move from left to right.
                    Wave theory states, “Wave comes from the ocean (left side, short lite) to
                      the beach (right side, longer lite)
                    You can sometimes see a change in momentum (direction) by watching
                      the shorter lights as they move across and eventually change the long term
                      light to make a F. (fresh cross)
           o DON‟T trade against the anchor window – “the trend is your friend.”
      Patterns
           o They either go UP, Down or Sideways
           o Try to recognize a “trading range” (pattern)
           o If the pattern is confusing (braided), don‟t trade and wait until that pair decides on
              which direction it wants to go
           o Look for the ones that have clear patterns
           o Count the “dots” – how many UP and then how many DN. If you are at dot 2 in
              an UP cycle that normally cycles as 3 UP, 3 DN, it is past a good entry point.
           o Look for the “Resistance” in a LONG trade and “Support” in a SHORT trade.
                    To “break” resistance or support, it should be 15 to 20 pips above or
                      below.

7 - Trend Analysis and Chart Reading Vol. 2

      Position of the Red and Green line
          o Imagine a clock face – 12, 3 and 6 o‟clock
          o Remember, GREEN line is most important
          o IF Green is pointing up above 2 and the Red is at 3 and turning upward, you have
              a good LONG signal
          o IF Green is pointing down below 4 and the Red is at 3 and turning downward, you
              have a good SHORT signal
          o Make CERTAIN that the green is a STRONG 2 or 4 – if in doubt, don‟t trade
          o The Red curling toward the Green (either above or below) is CONFIRMATION
              the move is starting.


                                                7
       o IF Green is pointing UP and Red is pointing DOWN, that is an “alligator mouth”
           or “PAC Man” – it shows instability. DON‟T trade. The Red is NOT showing
           commitment
       o The Green is the magnet – the Red is the metal. You always want to see that the
           Green has “attracted” the Red to follow in the same direction. That indicates
           “commitment”
   GAP ups and GAP downs
       o Will see between the Closing of market on Friday afternoon and the Opening of
           market on Sunday evening, or after a sudden news event
       o To recognize
                If you see the Red and Green line shooting straight UP or straight DOWN,
                   AND they are together, that is a GAP up or GAP down
                Will see a jump or drop in pricing
   Optimization of Minute lights
       o Mark prefers the Custom setup for lights instead of pre-sets
       o If you are very new, use pre-sets. Then is not the time to tinker
       o Once you have experience, now check different set-up
   Defining Angle and Separation
       o Good Separation
                IF your cursor is the “normal” one (default in Windows, about ¼” wide),
                   good separation is the lines being far enough apart for the cursor to fit in
                   between the lines
                On shorter lights, the lines will be a little further apart
       o Good Angle
                The greater the angle from 3 (12 to 2 or 4 to 6) is a stronger move than an
                   angle pointing at 2:30 or 3:30
                Diverging lines mean increasing momentum
                Converging lines mean decreasing momentum and likely to turn
                Good angle is 45 degrees or greater between 3 and 12 or 3 to 6
                Low angle is less than 45 degrees either way
                Parallel or diverging lines mean stable movement
   Momentum and Consolidation Cycles
       o Momentum cycle – When the currency pair is moving in the general direction of
           the trend or the direction of the anchor light
       o Consolidation cycle – When the currency pair is moving opposite of the general
           direction of the trend or direction of the anchor light
   Curve readability
       o If the curve reads in smooth, easy to read cycles
       o If the curves are confused, don‟t trade it
   F.A.S.T.
       o Fresh Cross – within 2 time frames
       o Angle – as defined above
       o Separation – as defined above
       o Timing – getting in at the correct time




                                             8
8 - Trend Analysis and Chart Reading Vol. 3

      In a chart – the grid defines a “time frame” depending on the arrow selection
      The grid is NOT an X / Y type of reference
      (reviewed Angle and Separation above)
      View charts from right (longer term) to left (short term)
           o Long term – months
           o Mid term – weeks
           o Short term – days
      Volatility bars
           o Register best in short term lights
           o Good to have increasing volatility for a trade
      Support or Resistance
           o Resistance is a peak – tend to prevent the pair from going higher
           o Support is a valley – tend to prevent the pair from going lower
           o If a chart is approaching either a peak (Resistance) or valley (Support), chances
               are the chart will either change direction to stay within its “range” of trading, or
               at the very least, have a slight retrenchment
           o Ideal time to enter a trade is right after a chart has “bounced” off of either support
               or resistance and is going opposite direction from support or resistance.
           o To consider a pair to have “broken” either support or resistance, you should be
               higher (than resistance) or lower (than support) by at least 15 to 20 PIPS.
           o Support or Resistance can show you the potential move of either a Short or Long
               trade respectively
                     IF the Resistance shows the last peak to be at .1250 and the current point
                       is .1245, you have a potential of a 5 PIP upward move
                     If Support shows the last valley at .1050 and you are currently at .1040,
                       you have a potential of a 10 PIP downward move


9 – Money Management

Best quote: “After the charts, the Money management screen is the most important in 4XME.
Failure to use proper money management is abusing your right to use the leveraging advantage
extended to us in the Forex market.” Blake Morrow

      Money Management is for YOUR protection – Minimizing loses.
      You learn by Paper Trading – this is a MUST first step
      Know the 7 Rules of Money Management
          o Never trade without a Stop Loss
          o Always trade with a Risk/Reward ration of 1.5 to 1 or better
          o Never over leverage your account
          o Make realistic goals
          o Accept losses, then move on, and trust software
          o Protect your profits when position is profitable
          o Always trade with money you can afford to lose.
      Money Management tab
          o For the MM Calculator to give you good information, it is essential you keep the
              Current Balance (upper left – is changed in upper right corner) accurately

                                                9
         reflecting your actual account balance. This is the primary factor in the
         calculation of how many lots you can trade.
      o Under Data Variable – Risk Reward portion – the first line displays the MAX
         Lots you can trade (not how many you should trade). In other words, DON‟T
         exceed that lot amount. If you do, you are over-leveraging your account.
              Paper trade realistically – if you will NOT be trading 5 lots in a real
                 account, don‟t do it in paper trading. Make your paper trades accurately
                 reflect exactly what you will do with real money.
      o Select the type of account you will be trading. Again, provide here a real
         reflection of what you will do “live”.
      o Trade Style – Active, Swing or Position are “trade styles”.
              Your choice of “trade style” determines how far back 4X will go to
                 calculate your ATR (Average True Range) which is what determines your
                 Stop Loss. Therefore, this choice is very important in that it should reflect
                 honestly your trade style. Failure to select the proper style could result in
                 getting stopped out of a trade prematurely.
              Most traders will not use the “Entry Arrow” trade style.
      o Be sure the Interval time value (center left) reflects the same time value as the far
         right arrow on the Chart screen.
      o Confirm all other selections – Correct currency pair, Long or Short trade and be
         sure you RECALCULATE both buttons
      o Remember - the Stop Loss is for YOUR protection. The suggestions have taken
         into account the ATR for the trade style you selected. It then places the Stop Loss
         just outside (above or below) the ATR so you don‟t get stopped out on a “normal”
         move.
      o “Newbies” should start out using a 1:2 Risk Reward ratio. This is easiest to
         remember and mentally calculate. Once you are familiar with the environment,
         you can change your RRR.
      o The only time you should use a Limit order is IF you can NOT be at your
         computer to watch your trade.
   AVOID the pitfalls
      o Economic events
      o Trading without a Stop Loss
      o Ignoring patterns / Trading against the trend
              Pattern – counting the “dots” or “boxes” on a chart line. If your normal
                 pattern is UP 3 dots, DN 3 dots, and you are at dot 2 in a current move –
                 DON‟T trade it. The pattern is almost over IF it holds true to its “pattern”
                 of movement
              Trend – draw a mental line from the first time frame at the chart line, to
                 the last time frame where the chart line ends. Is it UP, DOWN or FLAT –
                 THAT is your trend. Plus, your arrows need to agree with the trend – all
                 green or all red.
      o Changing plans mid-stream
      o Emotional trading




                                            10
10 – Technical Analysis

      IS IT necessary.
           o 4XME is a “trend” analysis software.
                   Primarily the “supply” and “demand” (buying pressure v.s. selling
                      pressure)
           o TA is “past tense” – 4XME is current, up to the minute
           o Is not a “moving average” type of software
      Trying to use TA slows your ability to “learn” 4X

      Support and Resistance
          o Any stock, option or currency pair, will trade in a range (a peak and a valley).
          o Support is the valley (floor). When the pair reaches support, it will usually
             bounce and go back in the opposite direction
          o Resistance is the peak (ceiling). When a pair reaches resistance, it will usually
             bounce and turn to go back toward its valley to stay in its trading range
                  However, IF something is “heavy” enough, or is forced UP with enough
                     force, it can and will break the floor (support) or ceiling (resistance) and
                     continue moving in the same direction
          o If it continues past support or resistance, then it has “broken” that range limit,
             which is called a “breakout”.
                  To be considered a breakout, the pair should move at least 15 to 20 PIPS
                     past the support or resistance level
          o IF the pair breaks out going up, then the old resistance now becomes your new
             support. Conversely, if the pair breaks support, it now becomes your new
             resistance. In other words, the pair is establishing a new “range” in which it will
             trade.
          o IF the current pair position is close to either the support or resistance, entering a
             trade is more risky because when it hits either, the trend is probably going to
             reverse
          o Support and Resistance does not change when going to a different chart. The
             lines look different, but if you find the same time frame, you will see that the
             Support or Resistance is the same.
          o How do you find Support or Resistance
                  Using the Foundation window (farthest arrow to the right on the Chart
                     screen), check back to the left to find the nearest Support (valley, if the
                     chart is trending down) or Resistance (peak, if the chart is trending up).
                  The value at the peak or valley is the Resistance or Support value
                  If the peak or valley is only 1 or 2 PIPs away from your current pair value,
                     then consider that as your potential max profit. Obviously, it would not be
                     worth the trade.
                  Have the “Show Scrolling Popup” checked (on the Chart screen). Now, as
                     you move your cursor back over the peak or valley, find the Support or
                     Resistance as follows:
                          Support – move the cursor back and find the LOW value for the
                              valley. Check 1 or 2 time frames on each side to get the lowest
                              low value.
                          Resistance – move the cursor back to find the HIGH value for the
                              peak. Check 1 or 2 time frames on each side to get the highest
                              HIGH value.

                                               11
                            Compare that value to the current value to find how far you are
                             away from either Support or Resistance to determine how far your
                             trade can potentially move. If it is too close, don‟t enter the trade.

      Channeling
          o All pairs channel. It is either
                  Bullish – trending up
                  Bearish – trending down
                  Oscillating – basically

11 - Basic Trading Styles

      To select trading type, go to the Parameters screen
          o Highlight the type in the Interval Setup
          o Click Apply – this set parameter throughout 4X for that style
          o Remember – a trading day has in the Forex market (24 hours) is 1440 minutes
      Position trader
          o In position for a few days to a week or two – Foundation window is Short Term
          o Don‟t have to check position as frequently
          o Set Stop losses wider
          o Looking for a larger return (400 to 500 PIPs), therefore, you also stand to lose
              more
                    This is controlled by the Stop Loss
      Swing trader
          o In trade for a few hours to 1 day to 3 days – Foundation is at 180 minutes
          o Check trade more frequently
          o Returns would be lower because working with a smaller cycle – the Foundation
              window is much smaller than the Position (day) trade
          o Stop loss is still set – but a little higher
          o Risk Reward set smaller – 1-1.5 to 1.2
      Active trader (not recommended for a „newbie‟)
          o In trade for minutes – Foundation now goes to 30 minutes – a very short cycle.
              You are now working with a short cycle, so you must be sure you have protection
              in place
          o Must monitor the trade actively – more time in front of the computer
          o Stop Loss set real tight – this is getting more aggressive in your trading
          o Looking for 20 to 30 PIPs max – if more, you‟re lucky
          o This is like “Day Trading” the stock market
          o Timing is critical – your full concentration is essential
          o Consider putting in a Limit trade as well
      Super Active trader (commonly called „scalping‟)
          o Foundation light is now 15 minutes
          o Trade runs for a few minutes only
          o Tight stop losses
          o Lots of time in front of the computer
          o Risk Reward never greater than 1.5 to 1
          o Trade time 5 minutes or less
          o This is a high risk strategy – very aggressive
          o 5 to 15 PIPs max profit
          o Must use „lot leveraging‟ – trade more lots thus more risk

                                               12
          o    DON‟T use minute lights lower than this – lower than 3 minutes gives so much
              „noise‟ that you can not be accurate
      Rules for Entry – same for ALL styles
          o All indicators same color
          o Far right window (Foundation) have F.A.S. – F. can be optional
          o Entry window have F.A.S.
          o Far left window have A.S. – strength and stability – this window is for
              confirmation of your Entry windows
          o ALWAYS trade with the Trend (# 4 window)
      Rules for Exit
          o First is dictated by the Money Management of the trade – Stop and Limit orders
              (if order is not monitored)
          o Watch for the „wave‟ from the left (lights changing colors) – if the lines converge,
              be ready to close
      Check your goals regularly
          o Where you want to be by…
          o How much you need to accomplish on a monthly, weekly or daily basis

12 - Time Zones and Calendars

      Time is referenced in GMT (Greenwich Mean (Meridian) Time)
          o Example – look at the CST row. The 6 indicates that Central time is 6 hours
              behind GMT.
      Green bars indicate when multiple (more than 1) equity markets are open at the same
       time
          o Yellow boxes are daylight – blue boxes are night
          o Best times to trade in U.S.
                   Open of USD market -           0800 EST
                          Look at U.S. Currency market open (first green box). Go up that
                             column and you see that it opens at 0800 EST
                   Close of JPY market -          0200 EST
                          Look at the JPY green boxes. Last box, then up that column shows
                             it closes at 0200 EST
      Calendars resources
          o www.4xmadeeasy.com – click on About FORES, Calendar
                   Gives an Economic Data Release Calendar about 2 months in advance
          o http://biz.yahoo.com/c/e.html
                   Gives a calander for one week in advance
          o www.instatime.com
                   Gives an excellent display of world time zones
          o www.forexnews.com
                   Scroll to bottom of the page for a Global Calendar
                   Top of page gives global headlines


13 - Standard vs. Mini Account/Leverage and Margin

      Standard Account
          o $2000 to open
          o 100:1 leverage
                                              13
        o 100,000 Trade Size
        o The 100K account is ideal for active traders wishing to leverage the advantages of
            FX trading. Traders receive precision execution from real time streaming quotes
            24-hours a day.
   Mini Account – for most „newbies‟
        o $300 to open
        o Up to 200:1 Leverage
        o 10,000 Trade Size
        o The Mini account is designed for those new to online currency trading. It is
            intended to introduce traders to the excitement of currency trading while
            minimizing risk.
        o The Mini account trades in smaller contract sizes of 10,000 units, 1/10th the size
            of the standard account. The smaller trade size gives traders the opportunity to
            trade live with less overall risk or exposure to the market.
   The „mini‟ is a safer way to start.
        o Trading with a Standard account has higher reward but also higher risk
        o If you are successful in the „mini‟, you won‟t need the Standard because your
            funds are going to increase
        o This is the place to learn money management
        o Because the pip value on the Mini Account is just $1 per pip – traders can
            focus on developing a disciplined trading strategy basing decisions on pip
            movement and market conditions NOT P/L.
        o Consider the Following Example: When trading Mini account, a 30-pip floating
            loss is approximately $30. That same 30 –pip move against you on the 100K
            account now becomes a $300 floating loss. By starting with a Mini account- a
            trader loses only a small amount on every losing transaction making it easier to
            stick to a disciplined trading strategy. Generating larger losses on the 100K
            account can be detrimental to new traders as the temptation to hold on to the loss
            is much greater based on the size of the loss.
        o PAY ATTENTION – This advise is the BEST YOU CAN GET.
   Margin
    The margin deposit is not a down payment on a purchase of equity, as many perceive
    margins to be in the stock markets. Rather, the margin is a performance bond, or good
    faith deposit, to ensure against trading losses. The margin requirement allows traders to
    hold a position much larger than the account value. Broker‟s online trading platform has
    margin management capabilities, which allow for this high leverage.

    In the event that funds in the account fall below margin requirements, the Broker‟s
    Dealing Desk will close all open positions. This prevents clients' accounts from falling
    into a negative balance, even in a highly volatile, fast moving market. Dealing Desk will
    close all open positions. This prevents clients' accounts from falling into a negative
    balance, even in a highly volatile, fast moving market.
   What Every Currency Trader Should Know
    The forex market is one of the most popular markets for speculation due to its enormous
    size, liquidity, and tendency for currencies to move in strong trends. An enticing aspect
    of trading currencies is the high degree of leverage available. Brokers allow positions to
    be leveraged up to 100:1. Without proper risk management, this high degree of
    leverage can lead to enormous swings between profit and loss. Knowing that even
    seasoned traders suffer losses, speculation in the forex market should only be conducted
    with risk capital funds that if lost will not significantly affect one's personal financial well
    being.
                                               14
        The Mini account was designed for those new to online currency trading. There is a
        smaller deposit required to open an FXCM Mini account and trading sizes are 1/10th the
        size of a regular account. The smaller trade size enables traders to take smaller risks. The
        FXCM Mini is intended to introduce traders to the excitement of currency trading while
        minimizing risk.
       Know the following terms – on the 4X website is a Glossary. Print it out.
            o Equity - The amount currently held in a customer's account calculated as if all the
                opened positions will be closed at the current market quotes.The account is comprised of
                Unrealized gains, less Unrealized Losses and plus or minus storage.
            o   Free margin - Available funds in the client's account not currently being used to support
                existing trading positions, which can be used to open new positions.
            o   Leverage - The ratio of the amount used in a transaction to the required security deposit
                (margin).
       BOTTOM LINE best advise
          o When you start, have the discipline to trade a „mini‟ account and trade SINGLE
            LOTS (1 LOT).
          o This is learning to „crawl‟ before you try „walking‟
          o IF you are NOT consistent here, you won‟t be consistent with real money.
            Conversely, if you learn to be consistent here, going live will not be a big deal –
            you‟ll be consistent then.
       Common Misconceptions About The FOREX
          o Trading FOREX on an un-leveraged basis is no more volatile than other
            investment alternatives.
          o Technical analysis does not translate well into FOREX.
            (It does!)
          o The tools to trade the (spot) FOREX are too cumbersome.
            (Not Anymore!)

14 -   Creating a Trade Journal

       IT IS – Archiving each individual trade you make so you have documentation you can
        look back at. The best lessons are those where you find a mistake you have made which
        caused a loss.
            o Basically, it is knowing what you did RIGHT and what you did WRONG
       Ten Steps in creating a Trade Journal (assumes you are using a Swing style)
            o Step 1 - Once a pair is found you want to trade, create 4 mini (tear away) charts
                by clicking the „tear-away‟ button 4 times
            o Step 2 – Make each chart reflect a different time interval – remember all the
                charts are working charts, so just click on the arrow for the time value you want
                that chart to display
            o Step 3 – Arrange each chart into one of the 4 corners of the screen – you will have
                4 charts covering your whole screen
            o Step 4 – Use the PrtSc key and make a „screen capture‟ of the charts
            o Step 5 – Right click on Word, select Paste and your capture is pasted into the
                Word document. This gives you a record of what your trade looked like when
                you entered. CTRL V will paste into the document
                     This is excellent documentation – you see a record of your name, the type
                        of set-up you used, time the trade was placed (all lower right), plus all the
                        other information like the Pair name, High/Low, Bid/Ask, etc.
            o Step 6 – Print out the charts – draw the trend line, circle the fresh cross, etc.
            o Step 7 – In Word, now write down all your observations and WHY you decided to
                enter this trade.
                                                 15
          o Step 8 – Also write down any negatives you see like close Resistance and/or
            Support, etc.
          o Step 9 – Now, when the trade closes, write down how you got out – Stop Loss,
            manual exit, Limit Order, etc.
          o Step 10 – Finally, print out a final document after the trade is closed

15 – The Emotional Side of Trading

      If you don‟t know what to look for, then you don‟t know the material – the „unknown‟
       causes emotions
      If you do something and you determine it worked or failed, you learn through repetition –
       this is what paper trading is all about
      Repetition, especially if it is successful, reduces emotion
      IF you don‟t see something good, don‟t execute a trade – forcing a trade causes mistakes
       and failures
      Have a trading partner that is willing to give you HONEST feedback, even if you don‟t
       like it
      DON‟T be afraid to let a trade to slip by – be certain or don‟t
      Have a definite plan for entry WHEN you find a good prospect
      IF you have a Trading Plan, and you use good Money Management, emotions subside
      When something turns, DON‟T try to „fix‟ it. Get out – better a small gain than a small
       OR large loss.

16 - Flexible Trading Plans

      A „Plan‟ has a known method of entry
          o You don‟t compromise your plan – it is rigid
          o If you have a plan, emotions are minimized
          o Your plan if mechanical – you either meet the criteria or not. If it doesn‟t, don‟t
               trade
      What should be in a trading plan
          o Known exit plan before you enter
          o Known money management you will put in place
          o Know what you want to trade – what pairs do you want to follow
          o Know what you are looking for in charts, F.A.S.T, which light is Foundation,
               which is Entry, etc
          o Define very specifically what you want to see on each chart BEFORE you
               consider a trade
          o DON‟T force a trade just because you haven‟t traded for a day or two
          o MASTER one style of trading at a time until you have consistent success – variety
               is NOT the spice of „trading‟
          o Know the objective of your trade before entering the trade
          o Set a realistic financial amount you want to realize per day, week, month, etc.
          o START with 1 LOT trades until you are consistently successful on the positive
               side – even if it is only $1
      Flexibility
          o You can have a „contingency‟ plan in case Plan A doesn‟t go today (like a
               different style)
          o Use the same criteria for success as in Plan A
          o Be more cautious because you are not on familiar turf

                                              16
17 – The BIG Light Strategy

I have found that sometimes forex traders struggle with the short
term minute lights and the volatility of the forex market trying to
scalp 10-20 pips. Many times they are not even cognizant of the long
term trend or they are not able to even diagnose where the currency
pair is in the overall longer term cycles. They are often traing
against the trend but don't even know it. This method focuses on
the attempting to trade the largest lights possible or largest
lights available for individual pairs and largest momentum cycles
available for any point in the market. The potential for larger
movements is here using this method, and more than likely less
frequent trading.

But even if you don't use this method you will be cognizant of the
larger trends and you will knowwhether or not you are trading with
the larger trends, or against the bigger trends (consolidation
cycles within a larger trend). If you strictly use this method you
would probably trade a little less but get potentially larger
movements, based on the current market condition and what was
available. Forex traders using this method consistently report
actual profits that are generally are higher up to the hundreds of
pips range of magnitude since you are attempting to use much larger
lights and momentum cycles. As with any method you would papertrade
until confident and use good money management. Always enter on a
fresh minute light cross with angle and separation.

The starting light setup is 720 minutes , short mid and long (custom
light setting not preset lights). Subsequent lights to check are the
660, 600, 540, etc. and decreasing from there in 60 min increments
until you find the correct trading window. You can set up a 660,
600, 540, 480 in the presets and then 420, 360, 300, 240 in the
presets. Then look at swing light settings, or create a custom set
of swing lights.

This is called drilling down all of the lights. If you follow the 6
major currency pairs this exercise takes 20 minutes and you can do
it 3
times per day on 8 hour intervals or ahead of the major trading
sessions (European, American and Asian). If nothing is out there go
live your life and spend time with your family and throw the trading
emotion out the window.

Using this approach you evaluate ALL the lights in each currency
pair and approach each analysis like a super long term position
trader but still maintain the flexibility to enter or exit on a
particular trading window that you determine by analyzing multiple
lights and looking for bullish waves, bearish waves, or channels up
and down that are identifiable and readable.

Just remember that starting with the long term light and moving to
the left all you are doing is magnifying the curve you just looked
at. The midterm magnifies the right side of the long term, the short
term magnifies the right side of the midterm, etc, etc all the way
down to a 30 minute light. Embedded trends and channels.

Procedure: Check any or all of the currency pairs you are interested
in systematically and check to make sure the long term and midterm
is fully separated with no convergence. This is the first filter.

If the mid and long are not fully separated you go no further with

                                      17
this pair and the pair does not qualify for this method and you are
essentially done with the major trend indicators.

If no pairs qualify for the method you have to then move to the
short term chart and larger minutes lights and start looking for
shorter momentum cycles or channels. Sometimes you will locate a
midterm and/or short term chart with angle and separation and this
becomes your foundation light/anchor light. It's the "biggest
available" for that point in time. Even if this method is not
applicable to a pair you will at least have looked at the longer
trends to see where you are at in the longer cycles and be cognizant
of this, which has value all by itself.

If you find pairs with fully separated midterm and longterm (strong
double foundation) move then to the to the second screening. Look at
short term light and 720, 660, 600, etc very large minute lights all
the way down till you find a light with a nice easy to read bullish
or bearish wave where the movement and consolidation cycles are
visually apparent. Any light will do. If you find one with good
readability this is your main trading window, lets say you find the
a 480 minute light has good look. Then optimize with lights around
it like 460 470 490 500 looking to refine your trading window
further,
optimize to the best one. Inspect the momentum and consolidation
cycles and estimate your next entry or exit. Drill down further the
lights to the left of your identified foundation/trading window and
try to identify a trigger light and WRITE IT DOWN. Enter on fresh
cross with angle and separation. Trail up or down from there with a
stop. Estimate potential profit based on previous cycles of movement.
At this point you should have your lights setup with the main
windows or foundation lights on the right and entry/confirmation
lights on the left.

Each currency pair is either trending up, trending down, channeling
or indeterminate (messy curves). Don't overcomplicate the approach.

Since you have already verified that the pairs of interest are pairs
are trending strongly or channeling look for the obvious patterns
bullish or bearish on short term light or large minute lights. The
cycles and patterns should be visually obvious. Don't force a trade
into any light, just evaluate the lights find the right one. Then
decide up front what your entry window is. Potential trading
channels and entry window must be visually obvious and make sense.

Contingencies - In the event that no separation is on the mid and
long (skewed, pacman, or braided) you are now aware that the pair is
not trending on a longer term basis but may be channeling on the
lights to the left. This is powerful information because very large
up and down channels may be available to trade. Start looking at up
and down channels for the short term chart and large minute lights
and drill down the lights again until you find a nice smooth easy to
read rolling trading pattern.

This method is only one method and we all know there is more than
one way of trading 4x. But using this method and canvassing all of
the lights you can ferret out the best and most obvious trading
channels and cycles and always be on the right side of the trade.

If no currency pairs meet the mid and long term full separation
initial screening criteria you can quickly move to another group of
lights to trade with shorter term anchor (foundation) windows or up
and down channel. My personal choice for a contingency would be a
                                      18
fully separated short term chart (position light settings) or short
and mid full separation. I prefer the "position" style as a backup
plan for trend trades using the short term curve as an anchor,
knowing I will be in for a shorter ride and possibly trading against
a longer term trend. This is fine as long as you are aware this.
Always better to trade with the trend or have full knowledge of the
fact when you are trading against it for overall risk assessment.

Dealing with convergences and consolidations………….
I have no problem with someone trading against the trend but not on
teeny tiny minute lights. Use bigger lights for bigger
consolidations and bigger potential profit. Look for short term
charts that have moved up for several days and wait for convergence
on the green line, then set up 30, 60, 90, 180 minute lights (swing)
or possibly a little larger and trade in the opposite direction of
the previous short term cycle and always use a fresh cross to enter.
Pick the light that's easiest to read. If a midterm chart goes
through a long cycle and the midterm chart green line convergeges,
these consolidation cycles can produce 300 pip retracements. After a
long movement on a short or midterm term curve and a convergence on
the green line, this is one of the few scenarios that I might enter
on something as small as a 30 or 60 minute light going in the
opposite direction of the previous cycle
cycle.

If you do not or are unable to write down your light setup
foundation light, main trading channels, and fresh cross entry
lights, and whether or not the pair is trending or channeling, which
direction you want to go and the spread, you have no plan and cannot
even papertrade……really why would you?

Money management is a little simpler with this method. I use the
peaks and valleys of the curves within the trends and embedded
trends to visually set stops slightly below the recent previous
support or above the recent current resistance if I am shorting.
Using the proper optimized minute light to read the peaks and
valleys. Keep it simple and very systematic.

List of I don't cares:
I don't care what currency pair I trade, but tend to stick with ones
that have a 3-5 pip spread.
I don't care if I go short or long
I don't care why its going up or down.
I don't care if a certain pair doesn't meet my criteria on the mid
and long, I can trade another set of lights if I want, that's my
choice.
I don't care what my foundation and trading window are as long as I
can identify it clearly.
I really don't care about small minute lights, because I know that
larger lights can give me a bigger movement.
I don't care if I trade against the trend as long as I am fully
aware of the risk.

When I introduced this approach in January 2004 in the afternoon 4x
talk live support chat sessions many software users confessed they
were struggling with the smaller lights and I turned many of them
around as they were ready to give up. Since then the overall
response has been tremendously positive as 4xme traders are able to
now see all of the charts and are able to be on the right side of
the trade/trend or say no to trades more often.

Traders have consistently reported profits in 50 to the 100 and even
                                      19
to to 1000 pip range (no kidding), traders doubled their accounts
and many made over $10,000 the first week it was introduced, based
on the
emails sent in from 4x users. Since then I can confirm that
consistently, over time, this method produces the largest potential
profits for any pair. I told the traders that if you trade bigger
lights you expect to get bigger profits. Simple simple. I cannot or
will not imply a profit for anyone, but the potential is there and
can be fully supported by the daily high profit testimonials
received.

Although my forex experience is limited, I have more experience than
any 4xmadeeasy trader reading the 4X curves due to my Wizetrade
experience of over 4 years. Owning Wizetrade I understand the
mathematical algorithm and how it affects the charts. The bottom
line is that if you understand these charts well and know how and
when to better to set a market and and stop order and understand the
basic concept of money management but understand little about the
forex market you actually need little else, this is why its called
4x made easy. I am a died in the wool Wizetrader who doesn't know
any better, and I don't trade any stock without a fully separated
mid and long term so I just did the same thing on forex looking for
the bigger trends first. You don't have to be a long term trader to
have a long term perspective on any currency pair, stock, commodity
or anything, its just awareness. The long term lights are the bus
drivers the minute
lights are passengers.

As a rule I don't hold over the weekend but repeat initial screening
on Sunday afternoon/evening about one hour into the opening of
trading to get ready for the first Asian session. I understand the
impact of news events and their effect on currency pair movements,
but this method is still essential to making sure you always trade
with the trend. Trends can be interrupted, but generally trends
always resume after the interruption.

Although I will not answer any questions on this method here on
yahoo or by email I am in the afternoon 4x chats almost every day
for 1 hour to field questions if your homework assignment I give out
daily has been completed.




                                      20

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:9
posted:7/11/2010
language:English
pages:20
Description: Archive Calls lotting paper