Forex Strategy E-book - Winners Edge Forex Trading

11m ago
606.24 KB
10 Pages
Last View : 6d ago
Last Download : 1m ago
Upload by : Eli Jorgenson

#Forex Strategy E-bookBy Casey Stubbs -Winners Edge Trading.comTable of ContentsChapter 1 . IntroductionChapter 2 . Trading PlanChapter 3. . Money ManagementChapter 4 . Moving Average StrategyChapter 5 . Stochastic StrategyChapter 6 . MACD StrategyChapter 7 . Parabolic SAR StrategyChapter 8 . RSI StrategyChapter 9 . ConclusionChapter 1 IntroductionDisclaimer: Forex Involves risk. So if you lose money you can't blame us we told you tradinginvolves risk.Welcome to the World of Forex!This E-book is a compilation of different forex strategies that you can use for you own trading. Ifyou do not have a system, then you can use this book to find one that works for you. This bookcontains everything that you need to be successful to trade forex if you read it and apply it andthen follow it. The key is to do what you plan to do and that is hard because traders get boredfollowing the rules all the time, emotional and greedy.My goal is to get you to be successful in trading the forex market. You have probably heard that95% of traders don’t make money. That will always be the case, but you don’t have to be one ofthe 95% , be the exception. Be the winner, be the one with the most training discipline and desireto accomplish your goals. You want to trade than do what is necessary to be successful, don’tmake excuses, get it done. You can do it. Reading this E book is taking step to getting you to beone of the 5% that makes money in forex Market. The next step is to apply what you learn,execution is always the most difficult part.Chapter 2 Trading PlanBefore anyone begins trading they must have a trading plan. Even before you have a demoaccount you must have a trading plan. This is because you want to trade your demo accountexactly like you trade your real account and in your real account you will have a trading plan sothat means in your demo account you will have a trading plan.What is a Trading plan?

A trading plan is basically a business plan except a trading plan is for traders that want tosucceed in forex. If you are serious about being a trader you will have a plan. This is what youshould have in your plan. Trading is a business treat it like a business use a plan.1. Overall Purpose of why you are trading and what you want to accomplishGoals that you can measure your progress to see if you are winning or losing. What steps youmust take to see your goals become successful andA system that you have developed to include the trading strategy, money management, Tradingroutine,Set your Mindset Write down that you will be successful and you will follow the rules and youwill not give up when times are difficult. I know that this will be difficult but I know what ittakes to succeed and I will do what is right by my trading plan. The plan is king I will follow theplan. The plan rules I wrote it therefore I will follow my plan, not my feelings or emotions. Myfeelings and emotions will lie to me but my plan that I wrote works and by following I will haveevidence and proof that it works.Weaknesses Write them down and come up with a strategy to defeat your own weaknesses.Don’t be a fool we all have weaknesses and those that are successful will identify them and dealwith them. Set up ways to overcome them, for example if you have difficulty following yourmoney management rules find write that down and tell yourself today I will follow my moneymanagement rules. If I have to get my mother to sit with me and make sure I follow them I will.If I have to get approval from my broker to make sure that I am following my plan I will. Sowhat I mean is don’ t let your self cause failure. Make sure that your weaknesses don’t take youdown. Do whatever it takes to beat those weaknesses.Trading Journal it is important to have a trading journal. It takes discipline to maintain a journalyes it is hard it takes about 5 minutes once you set it up. Make it part of your routine. Writingdown what trades you make which pair, what price, notes as to why the signals you got thereason it looked good. As you do this you will begin to learn where you messed up. You willbegin to notice that when you don’t follow rules you get creamed. The reason I do is because itteaches me to follow the rules. I hope you are beginning to see a theme here. Trading is not agambling event to get rich quick. Trading is creating a system and following it. The idea issimple, but it is oh so hard to pull it off. I use a spread sheet for my trade journal.Example Trading Plan(My Personal Trading Plan to share with you)Ok, First I want to say we are not all the same, so make your own plan that fits but you can usemine.Overall purposeThe reason I am trading to make a living to provide for my family. So I can be free to do otheractivities in my life that I think is good. I want to accomplish the difficult task of beingprofitable in the forex market. And to do it for a living.GoalsGoal 1 Follow My rules and this plan how I am going to that is print this plan out an put it infront of my computer and look at it everyday.

Goal #2 Make a 5 percent gain in my account each week.SystemMy system is a simple strategy with a set of rules to follow. Rules for my System:Capitol Preservation is most important I must always protect my account once it is gonetrading is over. It does not matter how large the account is if I risk too much it can be wipedout before you realize it.Risk 1% of total account value on all tradesIdentify the trend on 4 hr Chart and trade within the trend. If the trend is up I trade only longtrades.1 to 3 Risk Reward Ratio. Let My winners run and cut my losers short.Trade only in the hours of 8 am to 12 pm.Use a 3 EMA and a 30 EMA 25 EMA on a 2 hr chart. When the 3 EMA crosses above or belowthe 30 that is when you enter. Wait until the 2 hour candle closes.Open 3 lots with a stop just above the high on the two hour candle before the candle you enteron. Adjust stops as the trade moves in your favor.Use MACD with 12,26,9 settings the purpose of the MACD is to exit trades. When the lines onthe MACD Cross after you enter that is when you exit 2 lots two take profit. Keep the 3 lot opento let the profits go on more.

That is allthere is to it. I follow that and I do well I don’t find trades everyday but when the signals are notthere I don’t force it I follow the rules.Demo TradingDemo Trade your plan until you can do it consistently and make profits. Wait at least twomonths it could be two months or two years but do not enter until you constantly make yourprofit goal.Chapter 3 Money ManagementPay attention here this is the most important area of trading if you get this wrong you cannot be atrader. It won’t work, take my word for I know so don’t even try to not follow proper moneymanagement. Why do people insist on doing things that don’t work, I don’t know, If you don’tfollow Money management you are gambling, in gambling you lose unless you get lucky.Remember we are traders not gamblers.Money Management is protecting your account, it is that simple protect your account. Youprotect your account by managing risk. Before you ever make a trade determine the maximumdollar risk and the total % that it is in you account. Let me say that again because that is the mostimportant rule in trading. Before you ever make a trade determine the maximum dollar risk and

the total % that it is in you account.How much Should you Risk?It can be anywhere from 1 to 5% I personally like 1% because I can still easily make my profitgoal of 5% per week. Trading is not get rich quick. It is a slow take profit from the market overtime the ones that have patience are the ones that will be successful. However 5% is still lowenough that if you follow it you will not wipe out your account. Remember to adjust the risk andfigure it out after every trade because after every trade your account balance changes.This is also where risk to reward helps you if your win 3 times more than your losses than youcan lose 50% of the time and still be profitable. That helps grow your bank account by making alarger pip count.In conclusion ,practice proper money management in all your trading activities. If you canmaster your money management you will be fine because even if you are not the best trader youwill still be able to keep trading until you get to be the best trader.Chapter 4 Moving Average StrategyThis is a great strategy that is simple and can be used to become a profitable trader.Indicators: 10 EMA, 25 EMA, 50 EMA.First Identify the trend with a trend line on a 4 hour chartEntry rules: When 10 EMA goes through 25 EMA and continues through 50 EMA, BUY/SELLin the direction of 10 EMA once it clearly makes it through 50 EMA. (Just wait for the currentprice bar to close on the opposite site of 50 EMA. This waiting helps to avoid false signals).Exit rules exit when 10 EMA crosses 25 EMA again.This strategy is best in trending markets if the market is in a consolidation period do not use asthe movement is small so you run higher risks.

This strategy can be modified to improve performance. You could change time period butremember longer time frame is more successful. You could add RSI to that avoid fake outs orany other indicators. It is up to you. It is good to work it out and offer testing so you can see whatbest for you.Chapter 5 Stochastic StrategyThis is simply using Stochastic to find entry and exit points.Currency pairs: ANYTime frame chart: AnyIndicators: StochasticFirst Identify the trend with a trend line on a 4 hour chart.Entry rules: When Stochastic goes 80 to 90 and back down to through 80 then sell. If the pricegoes through 20 down to 10 then back up through 20 than buy.Exit rules: When the price continues though to the top or bottom either 80 or 20 then exit.

This strategy does not work well in trending markets unless you go in the direction of the trend.If you notice the chart above if you entered on downward trades you would make good profit buton the up not so good. That is because this is a current downtrend.Chapter 6 MACD StrategyOne way to use a MACD indicator is to watch the cross over the lines and enter the trade at thecrossover. The MACD is a slower indicator so it can be used with other indicators to help. Forthis Strategy we will just focus on the MACD.Rules: Enter on the Cross over.Exit: Exit on the next Cross over

So that is all there is to it. Remember to trade within the trend. Also stay away from this insideways markets.Chapter 7 Parabolic SAR StrategyThis strategy is used with the Parabolic SAR and the MACD.Entry on a one hour chart enter when the dots change sides when they go from top to bottom youwill buy. When they go from bottom to top you sell. The change in position of the dots indicatestrend change.This is how the MACD comes in. When a MACD cross over after your entry this is where youexit.

This strategy works well in trending markets. Notice how there is a trend line drawn on the chart.I recommend drawing trend lines with all strategies so you realize the direction of the trend.Chapter 8 RSI StrategyRSI is an indicator which shows overbought and oversold positions for the price movement.Over 70 is overbought and a reverse is coming and under 30 is oversold and a bounce to theupside is coming. With this indicator you must be careful as when a strong trend is in force theRSI can stay overbought and oversold for long periods of time.Entry: on a 4 hour chart when the RSI is oversold or overbought levels. On the cross beneaththose levels when the candle closes than you enter the trade.Exit: Exit when the RSI goes to 30.

This Strategy because of the longer time frame can be longer term so be prepare to wait for theright time to exit.ConclusionI hope this guide has been helpful to you. The bottom line is to create a trading plan first. Thendemo trade until you can become profitable. The strategy you use does not matter nearly as muchas the following the rules and following your plan. You can throw many different strategies intothe mix and be successful. If you have any questions I would be happy to help just email me at:Winners Edge [email protected]

Welcome to the World of Forex! This E-book is a compilation of different forex strategies that you can use for you own trading. If you do not have a system, then you can use this book to find one that works for you. This book contains everything that you need to be successful to trade forex