A bit about www.systemsfortraders.com and who we are

We are a group of 4 traders with over 50 years trading experience between us. All of us have been full time traders at some time or another, two of us still are, the other two still trade on a part-time basis. We set up and now run this new forum in our spare time with a specific purpose in mind.Many people find it extremely difficult to find completely independent and honest reviews of trading systems and services. This is because many products do not live up to their expectations (as advertised on their own websites) and many product reviews are carried out by other websites promoting and benefiting from selling that product. Our intention with this site is to facilitate a 100% independent and honest forum for such products.We use our spare time and our experience to produce initial reviews of as many of these products as we can. Reviews are based on our limited exposure, limited because we just do not have the time to review each product for months upon months and trade them all in parallel. However, this fits with our intentions, which is not to test each product to its extremes but to use our experience to get a general feel for it so as to be able to produce our initial review. To achieve this, for each product, we endeavour to do some form of back-testing/result verification and also run the product in real-time (on a small account) for at least a few weeks. Not ideal, however we believe our experience permits us to produce what we consider a reasonable initial review.Our intention is not to be Judge and Jury, our limited exposure does not permit this.  Following our initial review, the hope is to promote further (hopefully honest) discussion and feedback within the forum from those with more experience of the product, who will add further value. All being well this will result in a forum that the whole trading community can come to rely on and benefit from, not just based our experiences but from the experiences of the collective.

We police (moderate) every single post on the site so all forums will stay on topic.  It will not become another clogged up forum for others ego’s or for off-topic unrelated discussion.

Regarding affiliations, we are completely open and honest about this too.  We do not and will not ever endorse or promote any of the products we review. Nor will we ever accept payment or otherwise for a favourable review.  We do however set up affiliations where possible and ask, that, should anyone decide to purchase any of the products we review that they use our links. The commissions we receive from purchasing via our links (where available) will allow us to fund the future purchase of new systems and services to review as well as keep the site free.We also ask that users return to the forum from time to time and provide their own feedback. It is only through this interaction that the site can be of benefit to all of us.

 SYSTEMS AND SERVICES WE REVIEW

 Systems

 These usually come in the form; peruse the website, part with your cash, receive a manual (usually in pdf form), read the manual, set your charts up, learn the strategy, trade the system, make the same profits advertised on the website, never look back.

 Most of these systems are mechanical in use, thus, a certain set of criteria (indicators) have to meet certain conditions before placing a trade.  For example, MACD (12,26,9) has to turn up, 10 Day Moving average has to be sloping up and RSI(14) must be less than 70 on a 15 minute chart.  Please don’t trade this system, its an example.  But basically, most systems are rules based (mechanical) and need to be set up and “learnt”.  To us this involves reading the manual, setting up the charts, observing historic charts (back-testing) and live-running on a small (or demo) account.  We will never use a system out of the box based on the claims on the website and we would never advise anyone else to do so.

 Occasionally a system will come with an EA, this is short for Expert Advisor.  These EA’s are usually pre-programmed indicators that are downloaded and applied to Meta Trader charts (they will only work on Meta Trader charts).  This is quite a standard charting package offered by many of the Forex brokers out there so is usually not a problem for most.  The EA is usually incorporated into a systems rules.  E.g. it is basically another indicator that has to be a certain value, shape, etc. in order to place a trade.  The advantage of some EA’s is that they create an audible alert when a trade is setting up/has set up and thus saves the trader some trouble and hopefully, some screen time.

 Most systems we come across are Forex related, this makes sense, as it’s the largest (most traded) market and most flexible (its open 24×5 typically).  Some systems are designed specifically for indicies, e.g. FTSE, DOW, S&P and occasionally we come across some commodity based systems too.  However, it is fair to say that for every system we come across 2 out of 3 will be Forex based.

 Services

 This category could also be called Signal services at the moment as to date we have only really encountered Signal services in this category.  There are though, two quite distinct (Signal) services, “Standard” and Fixed Odds.

 By “Standard” we are referring to signals which are executed, as trades/orders, using a standard brokerage (trading) account or, particularly in the UK, with a Spread betting company.  Fixed Odds is a newer form of trading than the “Standard” form and involves placing a trade direct with a Fixed Odds broker or with a Spread betting company which offers Fixed Odds functionality.

 In the main, both types of service tend to fall into what we class as, Set & Forget.  This means one receives a signal (by email and/or sms), enters a trade/order and walks away.  The intention here is to emulate the results advertised on the website, to which you will have signed up.  Effort should be minimal.  The user should have to do little more than translate the signal into an order/trade with their broker and walk away until instructed to do otherwise by the provider.

 Robots

 There are many of these in the market.  For those of you that do not know what a Robot is, in basic terms, it’s a piece of software that runs on your brokerage account (usually via Meta Trader) and trades automatically without any human interaction at all.  All you have to do is buy it, set it up, run it, walk away, and it makes money whilst you eat, sleep, drink, etc.

 We are not interested in them at all and have no interest in ever reviewing them. Those wishing to pursue Robots will find many (sales) websites which are neither independent nor honest (in our opinion) featuring reviews. We will continue to focus on providing independent reviews of trading systems and services only, no Robots.

 We have our reasons for this, most of them based on the horror stories we read all too often.  In the main we have also found that most (sensible) traders (rightly in our opinion) are just not interested in them either, we may be wrong but we think not.

 WHAT MAKES A GOOD SYSTEM

 A question we are frequently asked and one we took some time to agree on, in order of importance:

 Next month we will focus on what, in our opinion, makes a (Signal) Service good.

 Mechanical

 Many are surprised that this is the most important factor, more important even than Profitability.

 If a system is not Mechanical, in our opinion, it cannot be operated consistently (according to a specific set of rules) and thus cannot be easily measured.  If a system cannot be easily measured, it is difficult to even consider claiming that it is or can be Profitable.

 How do we apply the term Mechanical?  What we mean is that a set of clear rules must be in place for Entry, Stop(s) and Target(s).  For example, x, y, z has to occur for Entry, Stop is xx and Target is yy, Exit if zz occurs.  This is a very broad example, however it illustrates our point.  Human intervention and discretion should be minimal thus negating emotion completely, or as best possible.

 Profitable

 This is self explanatory, a system must be Profitable.

 This is demonstrated in a number of ways.  Some websites provide previous results, some are actual, some are from back-tests, some are account (usually demo) snap-shots, etc.  A lot of websites provide examples of the finest trades from the last few years and most are also backed up with some glowing testimonials.

 The point here is that every system has some form or another of demonstrating its Profitability.  We take none of these as a given as it leads onto our next criteria.

 Proven

 The 3 key criteria now come together.  A system cannot be Proven unless it is Mechanical and there is no point in proving a system unless it is Profitable.

 We do and we also recommend that everyone else, do their own homework here and remain cautious in doing so.

 We approach this in a number of ways.  If we can back-test a system, we do.  If we can have access to a list of actual trades we take them and verify them.  If we can have access to live accounts we take that opportunity.  The idea here is that whatever historic data we can get our hands on to examine and verify we do it.

 We don’t listen much to testimonials, choosing more so to have a competition between us on who can find the most hilarious.

 Now, before moving on.  Just because historically something looks like the best thing since sliced bread, as mentioned above, we still proceed with caution.  For example, we have encountered indicators which repaint themselves or repaint after the event.  They look fantastic on the screen and highly profitable but this does not mean this is how they behave in a live environment.  Having proven a system, by whatever means, does not mean one can or should jump in without first using that system.

 Technically Sound & Usable

 What we mean here is two-fold.  First a (mechanical) system must be simple enough to be used and secondly it must not take up 10 hours of our day 5 days a week, staring at a screen waiting for a setup.

 Even the most mechanical of systems can be overly complicated, the chart can look like spaghetti junction and the criteria for trade entry can be so convoluted that 6 or 7 different events all have to occur at the same time.  We are not interested.

 Also, we are not interested in trading say, a 5 minute chart, for 10 hours a day.  Trading is about making a profit and having a life.  As a matter of note, most of the systems we trade at www.systemsfortraders.com require less than 15 minutes a day on our part.

 This is not to say we do not mind putting in the effort, we have put in a lot of effort over the years to get to the point we have.  Our point is that now, once we have decided upon a specific trading approach, our effort, in terms of executing our strategy and our screen time, should be minimal.

 We say this because in our opinion, there are enough opportunities in this environment across the many different timeframes we can chose to trade.  We do not need overly complicated systems nor do we need to be tied to our screens all day.

 We also like a system to be what we call, Technically Sound.  By this we mean that we like to agree with the principles by which it operates and everyone will have their own baselines here but we can give a couple of examples.  A system that goes long when RSI(14) is over-sold would not be Technically Sound in our opinion, nor would one that has a 100 point stop and a 10 point target.  Anyway, the premise here is that we at least agree the systems fits within some sensible trading boundaries and guidelines.

 It Works In Practice

 So, finally, once we are reasonably satisfied with our main criteria we always determine a systems credentials by trading it in real-time, usually on a small account, we just prefer this to Paper trading, personal preference really.  Paper trading is fine but even with a small account at least there is something to be won or lost based on your trading decisions.  As a tip, we usually imagine there is a zero on the end of our £’s per point when trying out a system on a small account, just helps us to involve some emotion that will always be there if the system is used for real.

 Of course, some systems fall by the way-side before we get to this point.  For example, we may deem it too complicated, it may not be mechanical enough, it may require too much screen time, we may have deemed it as not profitable, etc.  We may be wrong in our judgement but we generally go with our experience and gut feeling here.  If we are incorrect and do not progress we hope that we will soon be put right in the forum by our users.  If we are we will of course revisit a system and offer a follow up review.

 Being A Little Bit Picky

 And, really we are.  But sometimes we just get fed up with poorly written manuals and untimely customer support.  Believe it or not over 10% of those systems we review never respond to support emails, remember, we have already parted with our cash at this point.  We will now avoid reviewing any product where we receive no response to our initial enquiry, we suggest this is a sensible option for others to adapt.  Well, if someone is not interested in selling you something, what makes you think the product will be any good or that they will be interested in the slightest after they have your money.

 Summary 

So, we like Mechanical systems which are Profitable.  We like to perform some form of Proving exercise and to ensure the system is Technically Sound and Useable.  Lastly our final steps are to use the system in a real environment using a real account.

 Only after we have taken the following steps do we make our only real judgement.  This is never a recommendation but if any of us use a system (without modification) after writing our review we will give it a “Systems We Use”.  We will also, typically, update a live journal on the forum of all the trades we take using that system.

 SYSTEMS IN FOCUS

 To date only one system has made it into our “Systems We Use” category and that is the LMT System by Dean Saunders.

 LMT System  -  Works For Us!

 This is a system we liked as it is about 95% mechanical and takes about 2 minutes to operate 3 or 4 times a day.  This should be once a day but we cannot trade the Daily candles as they close when we are asleep so we trade the 4 hour time-frame instead.  The system slipped up in the month of July but before this it ticked all our boxes; Mechanical (95%, some exception rules to be applied that require some judgement), Profitable and Proven (on back-testing and live running), we agree with the principle of the system which is trend based and obviously we are happy with its usability as one of us is trading it and using it on our own trading accounts.  See our site for our real-time journal.

 5 EMA’s Forex System  -  Complicated!

 A Mechanical system based on 1 hour and 15 minute time-frames.  Although titled 5 EMA’s, the system actually uses MA’s, Williams, MACD, RSI, amongst others.  Just way too complicated for us.  Back-testing was really hard (impossible) and attempting to trade this is real-time well, there was just too much going on for our liking.  We just prefer systems to be more straight forward than this.  This is not to say this system cannot work, it’s just not for us.  We welcome feedback from others that have experience of this product particular those that are actively trading it.

 Easy Trade Forex System  -  Don’t Get It!

 A manual we feel may not have been written by someone who’s native language is English, nevertheless, it is comprehensible enough.  The recommended time-frame for this system is 4 hours (so a timeframe we like) and it “has been successfully tested for any time frame”.  The system itself is based on a rudimentary version of Fibonacci which is used to forecast a “Power Turn Point”.  However, the methodology behind this system just didn’t make sense (was not Technically Sound) to us and we didn’t back-test or attempt to use this system in real-time, just for that reason.  It would be interesting to hear from anyone actually trading this system to determine its usability and profitability.

 London Rush  -  Just About Made It!

 The only other system we have come across that has almost made it to “Systems We Use” category.  Claims of “Only 2 Hours A Day Is Required” actually equates to about 2 minutes a day around 08:00 (UK local time) most days.  The system is pretty much 95% mechanical and our live running in July produced a nice return of about 6-7% risking 3% of account balance per trade.  Even though we have an outstanding issue (and receive no response to any of our emails) we continue to run with this system and it’s on our “Systems We Use” list.  See our site for our real-time journal.  

This delusion globally entails identical aftermaths: 90-95% of traders turn steady to loose their deposits having studied books by Bill Williams, Alexander Elder, Thomas Demark, J. Schwager, et al.

Following the burn down of their first deposit trader’s plunge themselves again into scrutinizing Forex scholars, in this manner suffering losses of the second, the third and subsequent deposit. I will hereinafter try to elucidate where from the above regularity grows, so that no trader repeats his forerunners’ mistakes.

This statistics is common knowledge: 90% of traders constitute Forex losers… But the figure has always been giving rise to a leviathan of my doubts. It isn’t because of somewhat different 95%-5% loser-to-winner ratio quoted in the Van Tarp and Brian June “Intraday trading: secrets of mastership”. With 90% quoted universally, there naturally emerges the question, as to whether there is someone capable to check, to specify or to disprove the above figure. NO ONE IS, besides the directors of largest Western banks providing streamline Forex quotes, but having never raised the issue.

WHY? Because should this statistics be published, there will be sharp and ultimate decline in number of those chasing easy profits from the world Forex market. Otherwise banks would not keep mum in advertising purposes. Neither would they be silent if losers constituted at least by few points less than 90%. In any advertising, customer attraction is ensured by quoting beneficial maxima and non-lucrative minima. This has always been, is being and will always be a universal practice.

As a conclusion, 10% Forex winners is a maximum result among traders. It’s them, who have understood Forex market absolutely simple truisms and who attained steady daily earnings in amounts being gained by others within years or even the whole of life. Certainly, those are to be recollected, who in late 80s were the first in the ex-USSR to grasp laws of commerce and who began accumulating their initial stock. The rules used to be so simple that presently any schoolboy or a first-year student can show the way the capital might have been easily scraped up and augmented on the USSR debris and in the course of market relations being established in the post-Soviet space.

I do exactly allow for the fact that through the years a new generation will be laughing at the way we are now incapable to comprehend the laws, where under currency rates either spike up or fall down, all of a sudden.

With this provision, those seeking fast money at Forex have a much greater time limit than the ones engaged in capital building in the post-Soviet space (Forex market is incommensurably greater than that in the ex-USSR), but not to the extent thought by many.

By now trends are thoroughly less numerous than they used to be 10-20 years ago. By way of taking a glance the charts history You are in the position to understand the way traders used to earn under 20- 40 pts spread, commission and slippage. A trend was followed by a trend at that epoch.

AND WHAT’S NOW? Nowadays many of traders are impotent to gain under 3 pts spread without commission and slippage.

Thus, this book is intended for those willing to perceive Forex market laws. In order to get understanding of the way 5-10% of successful traders obtain profits, let’s at the outset analyze the reasons and the way the outstanding 90% of traders suffer losses. The 90%-figure looks scaring, to say nothing of 95% or 98%. It occurs despite the amount of literature on the issue equals to hundreds of fundamental books, written by authors, having gained capitals expressed by means of more than 7-digit figures (G. Soros, B. Williams, A. Elder, T. Demark).

Thus, the above minimum of 90% of smart, well-read, broad-knowledged people:- scrutinize the really great traders’ heritage;- open accounts with Forex Broker’s and banks, start trading and…- loose funds up to complete rout!

AND WHERE’S THE LOGIC? The answer springs to mind by itself… There’s something wrong in the literature (by the way, recognized throughout the world, where the deposit-killing statistics is as disappointing as it is in our country) so long as its studying yields such oppressive results.

STRANGE? No, rather natural, than strange on account of the following:

1. Being a great trader is not indicative of everyone being a great teacher.

2. Multitude of rules elaborated by scholars 10-40 years ago, has grown obsolete, since the Forex market is changing.

3. The scholars HAVE NOT revealed ALL the secrets even WITHIN THE FRAMEWORK OF THE THEN

FOREX, therefore by now their advice and recommendation turn out either obsolete or naïve.

Thus, once one’s advice and recommendations bring every 9 of 10 market participants to loose their money in each country, where one’s books have used to be published and have enjoyed all sorts of hosanna in the press, THEN ONE IS NONE OF A TEACHER.

Naturally, no trader will reveal his professional secrets to the full. But when studying Forex literature one gets astonished by a negligible extent the above secrets are “confided” at all, with a book on Forex containing 99% of common truth and 1% only of useful novelties. But should one train up even several thousands perspective traders, one will in no way burden oneself with competitors, due to the Forex market huge sale nature. Beyond a shadow of a doubt the above traders are really great. You may agree or not, but anyone, having earned USD1 bn or more, deserves being named “great”. So, one’s books should be published as memoirs. I am not attaching any irony hereto, since these persons have acquired gains by virtue of their minds and labor, as opposite to Rockfellers, who inherited their fortunes or to Russian oligarchs, who either stole or got their capitals dirt-cheap from state authorities.

Hopefully, understandable is the difference between such editions and manuals for beginners.

G. Kasparov, say, is far from writing manuals for chess beginners, since the job can be better completed by others with this fact not at all undermining Kasparov’s being a great chess player. And his advice and recommendation is sure to be of interest rather to a close circle of grand masters, than to those having touched the chess for the first time.

Actually Kasparov is but to be respected for not being tempted by the lust for fast money, by virtue of his name in the chess world and by way of cooking up manuals for beginners.

At Forex, by contrast, and for some reason, everyone deems oneself a teacher, which fact results in millions educated people worldwide leaving stock market being disappointed, angry with an inferiority complex life-time pursuit.

And hence, the unanswered question for them: is that all a fraud or not, since gains are midget, whereas losses are titanic?

I am recalling the book titled “The Alchemy of Finance” by G. Soros (the one I’ve read in early 90-s). I admit, it’s interesting, instructive…, but it is all narrated in so an inarticulate and tangled manner. As indicated in the foreword by an American investor, the theory has hardly been understood by few only.

So what’s the use of writing in such a manner? A theory may generally be complicated to any extent, BUT IT MUST BE wrapped in a simple, clear and understandable wording. You are welcome to attempt to read the above book once You have time to. Shortly, the Soros reflexivity theory of the countries’ cyclic development may easily bear a couple-sentence confinement:

1. Following liberation from totalitarian yoke, a country is granted credits, then, there is a rapid growth and flourish of economy.

2. As soon as the above credits are to be paid back, a country’s economy faces a natural recession.

Is it as difficult? The question may be addressed to a schoolboy (to say nothing of an American investor): when should those countries’ companies’ shares be purchased and when they are to be advantageously sold in order to acquire maximum profit? What’s going to happen in case one is too late to sell the shares, shortly exhibiting an impetuous growth in price?

Propounded long before, the Soros theory has been entirely corroborated in August, 98 by the dismal practice established in Asian and Pacific countries and later in Russia.

There still is another question: how inarticulate should Soros have been to enable his theory to be grasped by few only?

The second part of the book is not worth retelling. Reading its original is sure to be much more instructive with my annotation leaving no conundrums therein.

The theory is permeated by Soros’s strategy: enter long on what’s shortly going to enjoy price growth with a 100% probability and “pull out” Your money along with profits before the companies enter crisis, thus facilitating bankruptcies thereof. This is the way I clearly lecture my students on Forex-related complexities, thus conveying my logics to them. Despite its own complexities (news, TA, corrective actions, etc.), Forex is essentially reduced to a very simple truth: at a certain moment one should not be late with going long or short on a currency with “tertium non datum”.

And when asked if the Williams Alligator needs something to be added thereto, the majority of my students reply ”Yes!”, indicating what exactly is to be added. I’ll present a detailed vivisection of the issue in a separate chapter by way of proving that the Williams Alligator is but 50% effective.

Fig. 4. H1 EUR chart as of April 12, 2005. (See Note below)

The Alligator’s jaws display upward opening with a fractal formed at 1.3006. According to Williams, one should enter long one point higher, i.e. at 1.3007. Upward motion continues extra 11 points. Then the rate sharply swivels to fall down by 170 pts. Another example.

Fig. 5. H1 EUR chart as of April 22, 2005. (See Note below)

Please, figure out 1.3094, 16 pts above the previous fractal, following the Alligator upward opening. Thereafter, a sharp down swivel covering 140 pts. Hundreds of similar examples may be drawn. But what are the implications?

With the Alligator’s mouth opened, 50% of entries should be pro-Williams while the outstanding 50% – counter-Williams (i.e. vectored opposite to the Alligator mouth opening). When embarking on Forex, You must possess clear knowledge of the difference between either of the above 50%-portions. Otherwise…, You are doomed to loose even if You follow Williams’s technique, let alone other ones.

Even my students are in the position to advise what is to be added to Alligator in order to realize proper entry vectoring. Least of all would I want this example to be taken as a personal criticism of Bill Williams, whose contribution to the Forex theory is a significant one. And the majority of traders, like me, used to begin earning after studying HIS books. But not to go astray…, even without any addenda Williams managed to make a tremendous fortune, since a skilled trader (moreover being the Alligator’s father) is capable to differentiate between a steady travel and a pullback, or, say, a flat, or, visa versa, a trend low for the entry to be vectored oppositely. It is all fairly understandable for an experienced trader. But what about beginners as regards their interpretation of a flat, a recovery or a trend change?

These folks are sure to require assistance, especially, in information not presented in literature on Forex.

Without this knowledge a trader will never perceive the ABCs of stable daily earnings. But why the Forex scholars do not clear out the issue? This query is to be addressed to them, not to me. While reading these opuses, I am getting horrified at the fact that we are being foisted expensive high-sounding titled books, which are not going to ever teach a trader how to attain profits at the market.

Let’s open one of them (E. Nayman’s “Trader’s Minor Encyclopedia” and “Master-trading: Secret Files”) to get the understanding of the way almost all the books on Forex are written and supposed to have the price of USD20-100.

You may agree or not, but the name looks very beautiful and pretentious: “Master-trading: Secret Files”, 320 pages of sheer secrets…

HOWEVER, I HAVEN’T FOUND ANY SECRETS THERE! You are welcome to discuss an argue Yourself:

1. “The interrelation between fundamental factors and exchange rate dynamics” being a detailed story of how a country’s macroeconomic growing, benign rumors trading and political stability promote the exchange rate growth.

A “valuable” secret to be practically encountered in any Forex edition. But below is a real FA secret (not paid any attention to by Nayman): why does currency use to reverse against its country’s economic news? A whole chapter here will be dedicated to the issue.

2. “Construction of two moving averages on a single chart and twin combinations thereof”. The author furnishes a “wise” recommendation: entries should be made in the direction the MAs diverge (adding secretly that the most effective MA combination is 21, 55, 89, etc., as per Fibonacci).

The pseudo-secret nature of the above recommendation underlies the fact that any MA combination (should it be 21+55, as the author’s; 10+20 as in many Western trading systems; 5+8+13 as per B. Williams or 1+21 as used by numerous traders) yields the same results.

Ok. It all looks great. However, E. Nayman et al., seem to have circumvented the MA intersection chief secret, through which traders suffer constant losses: a “lighter” MA has crossed a “heavier” one, say, upwards, but… thereafter there is sharp downturn resulting in the MAs intersection again.

Fig. 6. GBPUSD H1 chart as of April, 21-26, 2005. (See Note below)

A fivefold reciprocating crossing of MA 21 and 55. You are welcome to calculate traders’ losses.

Now, let’s call it a day with examples. The MA intersection technique operates perfectly in certain circumstances, while turning out impotent in others, thus inflicting losses upon traders. No criteria have ever been stipulated by Forex scholars as to entries to be effected pro- or counter-divergence of moving averages.

3. MACD construction and analysis. What sort of secret may one expect from the following statement of Nayman’s: “a subsequent high being lower than the preceding one suggests a bullish trend depletion or even its changing with the same being visa versa under minimum MACD values”. Much of a secret, isn’t it? I thought it were the MACD operation principle, familiar to any Forex novice. The secret-fancier B. Williams hasn’t even taken effort to advise to perform inputs change from 9, 12, 26 into 5, 34, 5 to provide for a lag killer.

Assuming the above, authentic MACD secrets are not paid any attention to by scholar, which fact inflicts losses upon traders. The situation comes into effect, when upon a divergence formation, no trend change is observed with another same-trend wave taking place instead.

Fig. 7. GBPUSD H1 chart as of April, 2005, where MA21 crosses MA55 with slight rise and sharp downturn. (See Note below)

Another example:

Fig. 8. GBPUSD H1 chart as of May, 2005: a divergence with MA10 upward crossing MA21; a brief nudge up to 1.8916 and a sharp downturn. (See Note below)

As different from Nayman and other Forex scholars, we’ll touch in detail upon the ways to detect when MACD is trustworthy as a trend reversal attribute and when it is not.

4. TA classical patterns. One can not help smiling at the author sharing a secret of “head’n’shoulders” and “double bottom” patterns, being studied by beginners at the earliest lectures on Forex.

And here goes a real key secret: in what cases the patterns are indeed indicative of a reversal but in what cases brokers trap TA pattern-fanciers? Is there someone doubting the fact that patterns are known not only to traders, but as well to brokers with their mouths watering to make a rod for the backs of lovers and connoisseurs of the above patterns, just like on the sample chart below:

Fig. 9. GBPUSD H1 chart as of May, 09-11, 2005, a classical “inverted H&S” (See Note below)

At 1.8871 there’s an impetuous upward breakthrough, the Alligator rotating upwards, MACD above zero, MA8 having intersected MA21 upwards, the Williams vaunted Awesome Oscillator signaling long entry, the Accelerator Oscillator pointing up… nevertheless, the rate reaches as far as 1.8916 and slips down to 1.8481 by 450 pts.

To be noted: much worth scrutinizing is the phenomenon of Nayman’s “Trader’s Minor Encyclopedia” and “Master-trading: secret files” purported at understanding why over 90% of traders turn losers after reading the books.

The solution, to my mind, is that the above opuses are but good “ABCs OF FOREX” thus giving birth to all Nayman’s merits and demerits.

The guy is primarily awardable for having spared beginners’ paying USD50-200 to various Forex training courses or academies. Instead, one can download and study Nayman’s books, whose extracts are, by the way, quoted to trainees during their studies. Nayman is generally to be expressed gratitude to, because of his having laid out the Forex basic course in a competent, popular and accessible way.

This is the point, I elucidate to every beginner, being introduced to me: first one should scrutinize Nayman’s books, then only it’s worth discussing hooks and crooks of earning at Forex instead of loosing.

Nevertheless, there is a chief Nayman’s self-delusion about his folios really being in no way secret files with no one being able to find anything new to enable oneself to improve one’s Forex earnings. These books containing neither unique techniques nor non-standard solutions are famous for the generalization and systematization of what has been the Forex knowledge prior to Nayman.

But this fact is not realized by majority gripped by the “Master-trading: Secret Files” fascination, who open live accounts and turn losers inevitably.

Shortly upon their pre-mature success on demo accounts these folks hastened to open live accounts and faced losses. But since the Dealers’ staff managed to convince them in the incidental nature of the above losses, the folks ventured to go live again and did again turn to be deposit killers.

With these facts being proclaimed, I don’t hold it appropriate to call any statistics science for help. Any sensible man is to get the understanding of the above losses as not being of an incidental nature.

There could be NO OTHER WAY about it.

The next trader training level comprises books by B. Williams: “Trading Chaos” and “New aspects of exchange trading”, where the author propounds his own Forex trading methods along with advertising the other ones’, viz. Elliott’s.

My book, “Secrets Of Craftsmanship Narrated By Professional Trader Or What B. Williams and E. Nayman Have Concealed From Traders” is purported at developing of THAT particular school of training traders to practical operation at Forex.

Hardly will anyone object to the fact that B. Williams will disclose his Forex intimacies free of charge. Neither will he furnish their 100% disclosure after being paid to.

In all his splendor, Williams possessed sufficient knowledge to;- to share A PORTION of his secrets in his “Trading Chaos”;- to share A PORTION of his secrets as a paid training;- not to share A PORTION of his secrets in the least.

My book, “Secrets Of Craftsmanship Narrated By Professional Trader Or What B. Williams and E. Nayman Have Concealed From Traders” is also dedicated to teaching how the Williams secret methods are to be decoded properly to ensure successful Forex trading capabilities. Each of my book’s 20 chapters is permeated with a common logic aimed at finding relevant discrepancies in literature on Forex and at presenting my personal technique of Forex trading.

B. Williams declares being capable of analyzing tens of currency pairs (of 140-bar history each) that within tens of minutes, but in no way does he explain how to, whereas, I explain, that it’s feasible for any wide-screen trader, provided my computer monitor being 3-currency capable only (see: “Ally and adversary currencies”).

B. Williams sings about his magic Alligator, while I disclose and eliminate its pitfalls by, say, adding a MA233 thereto. This arrangement visualizes the whole of the 4 potential currency travel options: up/down above MA233; up/down under MA233.

B. Williams lists a stop-loss to be a “safety cushion”, whereas I disclose and eliminate its shortcomings by way of alternatively using my own pending orders.

B. Williams hold trades volume to be authentic resistance breakthrough criterion, while I quote reasons by which trades volume turns to be deceptive on Metatrader platforms (thanks to the banks Consortium) and I introduce my own levels true/false breach criteria. Now, regarding trading on news, I demonstrate the way one can turn a loser if trade like all the others and I offer my own on-news trading style.

1) Knowledge – As we all know already that Knowledge is power without Knowledge is just like working without getting paid. Get your Free FX Power Trading Course value @ $500! This ebook alone would teach you how to become a successful forex trader! http://www.eforex22.com/
2) technical and fundamental analysis – be prepared to trade and analyse the the chart and look out for the news annnouncement. Don’t ever trying to spot market tops and bottoms you’ll certainly get wrong as market is not predictable. Nobody can point the tops and bottoms perfectly and consistently even however good you are. Trade news & calendar reports, i.e jobless claims, (un)employment data, trade balance, budget deficits, productivity, Univ. Michigan Sentiment, PPI, CPI, FOMC, interest rates, Greenspan comments, consumer confidence, leading indicators, GDP, inflation, money supply, government intervention, IMF and/or World Bank intervention. News & Reports Tools: Shirmeyer economic calendar, Bloomberg TV and web site, Reuters.
http://www.eforex22.com/
3) learn to manage risk – stop losses quickly let profits run. Limit your lossses to only 15 – 30 points and make sure to ride your winning to at least three folds of your limit losses points. For instance if you were to risk your losses to 15 pips make sure you ride your profits to at least 45 pips if you’re risking 30 pips make sure you ride your profits up to 90 pips. if you apply this method you could be right only 50% of the time yet still make money in the long run!
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4) follows the trend – always remember trend is your friend and trade only when market begin to trend don’t ever go against it.
5) Time frame – look out for higher time frame and trade the 1 minute chart. Price directions are much much clear when you use this method for instance if you were to trade daily chart look out for smaller time frame such as 1 minute chart or 15 minute chart. There are 60 bars of 1 minute chart and 4 bars of 15 minute chart to contained in 1 hour bar chart and there are 24 bars of 1 hour bar chart to that of daily bar chart. By figuring out this smaller time frame your’re certainly on the right side to predict the future market directions.
http://www.eforex22.com/
6) The best trading time –
a) London opens at 8 am GMT or 3am EST. Closes at 4 pm GMT or 11am EST. The most active pairs during this session are EURUSD with 39% of the trading volume, GBPUSD with 23%, USDJPY with 17%, USDCHF with 6% and USDCAD with 5%.
b) Europe opens at 7am GMT or 2am EST,Closes at 3 pm GMT or 10 am EST.The European session is the most volatile session most of the time.
c) New York Opens at 1pm GST or 8 am EST.Closes at 8pm GMT or 3pm EST. New York is the second largest forex market place. The busiest time is 8am to noon EST. News releases can result in a volatile market. Trading activity usually winds down after the U.S. afternoon trading period.
d) The Tokyo session opens at 1am GMT or 8pm ESTand closes at 8am GMT or 3am EST.Sometimes volatility is low and sometimes good moves occur. The USDJPY is the most active pair with 78% of the volume followed by EURUSD with 15% and EURJPY with 5%. UK is on British Summer Time which is one hour ahead of GMT.UK, Europe and USA are on Summer/Daylight Saving Time until Sunday 29 October 2006.
http://www.eforex22.com/
7) knows the indicators: All of these indicators i.e. moving average convergence divergence (macd), fibonacci retracement levels, moving averages, ATR, RSI, momentum are absolutely important without it your chances of winning the market are absolutely slim it’s just like travelling without a map.

I am in the forex market just for few years and my experience is not huge, but after some gains and losses I started feel very confident about my trades. You can also get more familiar with our Investija.com company’s forex trading methods. In this article I simply would like to share my points of view to the market and I strongly feel that support and resistance lines do not get it’s deserved appreciation in the publications. We all know that support and resistance are very important, but still most of the trading methods do not include those lines at all. Drawing tools in the technical analysis are very powerful and all drawing tools contains support and resistance.

Some years ago I started trade in the forex market and due to lack of my knowledge about economy (I am IT specialist in programming) my approach to the market was purely technical. I studied all available indicators, theirs construction, how and when to use them. Due to my enthusiasm I very quickly developed few trading methods and started to trade. Well, my account started to jump up and down as a crazy horse. One minute you feel as a king of the world, but with the next glance at the market you simply can not believe – you already counting losses! I started ask myself questions: does technical analysis really work? Sure it does. With one condition – if you are using it correctly. I studied more about technical analysis and more I studied more clearly I could see everything. And at this point I would like to advice all the new traders – do not go into the market until you fully understood why are you selling or buying. To buy or sell just because MACD indicator declining or advancing simply is not good enough. Have theory part of your trading method ready, in case if somebody will ask you why are you taking such and such action.

After my trading account started dance with the wolves without any sense at all, I started investigate what is driving the market. Answer would be – fundamental news. Personally I have a doubt about that. In my point of view – market is based on traders emotional response to the current economical events, but news itself remains just news. Important word in the previous sentence is – emotional. Traders do not respond to any news rationally or logically. Emotions is driving the market and probably, if we take human nature itself, that is why trading on the market is so attractive. We all striving for positive emotions, we all have a hope. Let’s be true to ourselves: even if we follow any fundamental news, we still respond emotionally, and just traders with strong economical background, can interpret those news in correct way. Not all traders have finished some school of economics, but it does not mean their are not making money. And this is probably the reason why some fundamental news sometimes produce movement of the market in the opposite direction. At least for some time. Basically I believe that fundamental news are very important, just requires longer time to convince the traders to go that direction.

To find emotional state of every trader in the world practically is impossible. Plus professional traders have their emotions at minimum. That is why their are professionals. But at the same time every trader has his point of view to the market and traders are acting upon that view. If market is going up – traders are buying, if down – traders are selling. Market is just constant battle between buyers and sellers. In order to make money all you need is just to join right side. That is all. Looks simple, but how to do it in practice?

We all know about support and resistance lines. How those lines appear on the chart? And why sometimes those lines are broken, sometimes not? If we agree that the market is just constant game between bulls and bears, those lines will represent the price where one side taking over another side. If price is not going down below the support line it shows that buyers are in strong position or most of the traders has INTENTION to buy. And if price are not going above the resistance lines, it means just one – there is not enough buyers to go further up, in others words, traders at this moment have no INTENTION to buy above that particular level. I intentionally marked word “intention”. I simply would like to make traders aware – if most of the traders have no intention to buy or sell, market will not move in that direction. Market is driven by the traders actions and if there is no intention to buy or sell, market, in the best scenario, will stay flat. In the worst scenario – it will start to go opposite direction. If there are not enough buyers, sellers could start theirs attack. Congestion around the support and resistance lines are probably most important factors in the market. Even if bears start pushing strongly bulls down, victory can be decided just after support line is broken. If support line remains in tact, all the bears actions still in vain. And the same remains for the bulls – no matter how strongly you feel about the market and sitting with the long position, you can not say that market is going to move north if the resistance line is still holding its current position.

After I wrote for myself this theory and started to take actions according to it, my trading account started stable movement up. On my charting screens I left just two lines – support and resistance. I do agree that technical indicators are very good, but we all need to find our own way to trade the market. I am into the market just for one reason – to make money, and my trading approach is very simple, but yet affective. As long as traders will remain human beings, those support and resistance lines will exist. It is our human nature. We all taking actions according to the current situation. We all need base for our decisions. That is why some traders look at some technical indicators to take theirs decision. Again, I am not against technical indicators, but buy or sell just purely relying on them is not for me. But I believe are very good traders who simply can make money just with indicators. At the same time I do believe if their start paying more attention to the support and resistance lines, their will be more successful.

Another positive side of the support and resistance is this: support and resistance are the core of all drawing tools. Trend lines, Fibonacci numbers , channel lines and etc.

So let’s take a look at my practical side. You know now why I am doing that way, let’s see how I am doing.

First of all I would like to say that I am going to give examples of the charts at the time I write this article. There is no point to look at the past and find best examples. I would feel cheating. And probably that would mislead most of the traders. If my approach is working, it should work in any situation, not just in the past. And if this article will be printed, you will be able to see what happened next.

Second of all I will give those examples in order of the three market conditions: strongly trending market, slowly trending market and flat market. Reason is to make traders aware, that whatever your trading method is – it is not perfect and do not ever get excited about Holy Grain. There is no such thing. Your discipline and patience and actions without emotions makes money, not your method.

Third of all, for the general conditions I am using 4 hour charts, but for trades I am using 1 hour charts. Basically it is possible to skip 4 hour chart for this article, because this article is about support and resistance, not about my curiosity on the big picture.

Let’s start with the strong trending market. Everything what I am going to show remains in power and for the bull trend,but in opposite direction. I think there is no reason to repeat myself twice, just to opposite direction. Here you will see bear market on the GBP/USD (1 hour chart).

Let’s analyse. Here on the chart red ellipsis represents the moment when I drew support lines blue colour. After line has been broken I made that line broken. Last support line is still in tact. Thick blue lines represent resistances.

Why I am considering this movement as strong trending? First of all support lines were broken with on strong candlestick. Next – movement down is enough sharp without looking back, but movement up (retracement) is slow and unconvincing. Third point is – market did not retraced more than 60% of the previous movement down. Those three points is my major analytical points. On the chart you can see number 5 with the question mark. This is the point where I am ready to sell again with the stop loss above number 4. But before I really going to sell I will wait for bearish candlestick formation around area of number 5, with the expectation that price are going to test existing support. And if the support will be broken easy as a previous ones, I will make (again?) another nice profit. If not, I will take at least something. But do not get excited. I have not got illusions and I fully aware that after prices reached point number 5 , did bearish candlestick formation, and after I gone short, market will follow direction I want. Not always. But until resistance point number 4 for is still in place I can hold my position, and just after it has been broken I will take loss.

Hopefully you have basic idea how do I trade. Support line is broken – I look for retracement to go short. And opposite – resistance line broken, I am looking for dip to go long. In the previous chart we saw nice trending market, but unfortunately such market conditions is not so often as we wish. Let’s take another example of NZD/USD (1 hour chart), where I consider slow trending market.

Here we have strong bearish market from resistance (point No 1) to support (point No 2). And we see that at point number 3 market stuck and would be my selling point with the protective stop loss above point No 1. Market dropped down and we can easy draw resistance line at No 3 and move stop loss from point No .1 to just above point No. 3. As we see market did not go down to far and breaking the resistance point No. 3 moved up. Despite previous strong bears market, I for some moment considering that bulls taking over. But not very convincingly. So after resistance (point No.3) is broken I will be bullish market supporter. Here many can argue and say that I am wrong. Well, is not a problem to be wrong. Problem is to assume where market is going to go. Just market can tell you that. But for me for now market is moving up and as long as it is going up I will follow. So, after market reached point No. 5 I will look for some dip down. Let’s say I bought at 0.7016 (in fact I really did). After market moved up I put stop loss below point No.6. But look at that movement up. Slow, lazy and boring as a fly on the hot summer’s day. This movement from point No. 2 to point No. 7 I consider as a slow trending market. I do not have any doubts and my task is to get out from the market near the point No. 7. I took some profit. And market dropped below support No.6. My intentions changed as well, for now I will wait for opportunity to sell around 0.7025 with stop loss 0.7065 and profit 0.6900. That is the plan, but just market will show where its direction.

Here I would like to remind dear readers about my three major points: First – resistance and support lines should be broken with the sharp movement of the price. Second – retracement should be slower than direction of the current trend. And third – retracement should not be more than 60% of the last strong move. I have got theoretical and practical background for those three rules. Now let’s see flat market. Here is 1 hour chart of USD/JPY.

From the resistance (point No. 1) market moved down to point No.2 and started to climb back. At No. 3 good opportunity to sell, I went short with the expectation to reach 108.30. But look how market broke support line (point No. 2). If you take a look back at my three trading rules, so there is the first signal that traders still has some intentions to go up, instead of down. I placed stop loss at 108.35 just in case. Well, after some time market bounced back from the point No. 4 with very impressive strong movement, but… couldn’t go above resistance No 3. What’s it. Market did not broke the support line No. 2 and the same time couldn’t go above the resistance. For now I will stay and wait. Later market moved down, but still support in place, later up again, but again resistance was not broken, and even recently, when prices looks like broke down below support line, I still have some doubts. I did one trade, have got little profit and will let the market to decide, where it wants to go. And after market take its course I will join.

As you see, by analysing just support and resistance lines, is possible to get good results. This article just simple reminder of the support and resistance. How and when to draw those lines, how to draw trend lines and to use other drawing tools, time frames, psychological factors – this are that things requires another discussion. Those simple tools requires precisions. Trust me, wrong trend line with certainty will produce negative results.

What did support and resistance lines gave me? Confidence, clear vision of the market and most important – emotional approach to the market. Always remember – everything is constantly changing, nothing is permanent. I wish best to all traders, I wish success and prosperity.

There are two distinctions that will be made in this article. The first regards forex trading software that enables the retail forex trader to access data feeds and charts that show the current market action of major currency pairs and crosses in the forex markets.
The second regards forex trading software that either assists the trader in some way as an adjunct to their trading or claims to identify trading signals whereby the trader can enter the market using the software perhaps as a stand alone or in conjunction with their technical analysis charts.
The forex trading software that is probably most relevance to the forex trader, who participate in online forex currency trading through a forex broker, is that of a charting package which may well be provided by the broker. Many forex brokers, contrary to popular belief, provide excellent information for their clients, in order to help them.
In addition they will provide a kind of forex trading software, that incorporates a datafeed which transmits the latest market prices as given by the broker with a package that enables the trader to use charts of different timeframes, different currency pairs and a selection of technical analysis indicators, which can be used to create a technical training strategy.
A good charting package will be reliable 24 hours per day in providing up-to-date quotes and potting market action on a candlestick or bar graph. The amount of options will vary from broker to broker, from charting package to charting package.
Most will include the bid ask prices across a variety of pairs as well as the option to display one chart or multiple charts and to put on those charts indicators such as: moving averages; RSI; Fibonacci retracement levels and an ability to change the change the color scheme to the desired choice. Such a software made it to trader the opportunity to execute trades as well. Features such as one click order execution and closure are desirable. Speed of execution obviously is a major advantage for intraday trading.
The other type of forex trading software that has been popular to the retail investor, is the forex software that claims to identify signals and entry points for trades usually for a monthly fee. Unfortunately the reviews online for such softwares, purportedly from past users, are frequently very negative.
It is not the purpose of this article the judge, just a present appear to be the facts. The other hand, some companies offer a forex trading software, which rather than identifying the signals, provide either a template or a chart set up along with training which may or may not be proprietary, that can help the trader improve their style dramatically.
Of course, there are other types of forex trading software. There is the type of software that allows the trader to practise trading through a simulation of historical forex market data, so that the trader can practice their trading, even at times for the markets closed, i.e. at weekends.
One other thing to be remembered is that even if you’re forex broker does not provide you the software that you find is the most useful of the most helpful in terms of your looking at charts in order to trade, is that your computer may well be able to run both your brokers software and the particular charting package software that you like, at the same time, enabling you to place trade with your broker whilst monitoring the market using a charting software from either another broker or datafeed provider.

Human nature never changes and therefore repeats so if you know the theory of human nature you can make regular profits by applying various scientific theories to catch these repeating patterns – let’s look at them and how to make profits.

There are three major scientific theories and they are:

Elliot wave, Gann and Fibonacci

These three theories claim that markets can be predicted with scientific accuracy as human psychology is constant and always will be, therefore once you know this recurring phenomenon it’s easy to spot profitable patterns in advance.

The problem is none of them work – sure, human nature is constant and repeats but this cannot be reduced to science.

You need to know the time frames.

It’s a bit like saying another earth quake will come in California sure it well but when?

Scinetific theories like Gann Elliot and Fibonacci despite the hype dont work – Elliot made no money and Gann ended up selling courses for a living and as for Fiboonacci this has nothing to do with finace at all and was devised to solve a problem to do with the copulation of rabbits in the 12th century. If leonardo Fibonacci were around today, he would be bemused how his theory has been hikjacked.

These theories appeal to lazy or the far out investment crowd, who think trading is a walk in the park and with the rewards at stake its not that simple. Of course it is possible to make money but you need to see forex trading for what it is – a game of odds.

Markets are all about timing and it’s obvious no scientific theory could work as if it did we would all know the price in advance and there would be no market!

A price moves because of uncertainty pure and simple

So if human nature is constant what can you do?

The answer is to see the markets not as a game of certainties – but as an odds game.

If you learn to play the odds you can and will make a lot of money sure, you will lose some trades but that’s just the way it is – a football player doesn’t score every time he kicks at goal but he hits the target enough to make a living.

If you want a theory to help you

Study Dow Theory – it is simply one of the best theories you can study in relation to market movement. Then use your forex charts to spot the patterns and time your trading signals

If there is one group that make excellent traders its – ex blackjack and poker players.

Why? Because they know they have to fold ( take losses ) and when they have a good hand play it for all its worth ( i.e up the bet size ) to make a living and they do this non emotionally and with discipline – and that’s what you need to do to.

Learn down theory, learn the traits of blackjack and poker and you have a great combination which will beat any scientific theory hands down in the market.

So if you want to trade currencies and you want to win – learn to play the odds and win big.

As customary to my write ups on this article board and others, I’ll continue to assert the fact that Nigeria is a force to be reckoned with as regards every known endeavor on the face of this planet called Earth, and the internet is no exception, it is left for the rest of the world most especially the United States to fathom this cold hard fact out. Well I would have titled this piece ‘the online conspiracies of the west against Nigeria’ well that would sound cynic and inane. It will look as we are beggars at the rich man’s table waiting for crumbs that falls off his table; when we are kings in the making. However, it has become imperative that we will take on destiny instead of waiting lazily for it to come beckoning at us. But do you know one thing my friend? Your destiny cannot come to you except you shrug off the ashes of defeat, rise to your feet, and then take what rightly belongs to you. Sorry if I have digressed from the main topic of the day, well I was trying to crave your indulgence as is always the case with me. Like I said earlier on, Nigeria remains the biggest internet estate and can compete favorably with India on the third world country category and in the real sense can give the west a run for their money; and as a member of cyber world is not immune to the fistful of online fallacies that pervades the internet daily. But I’ll only deal with this ill wind the as it concerns we Nigerian.

One thing that has remained obvious to we Nigerians especially those who wants to make a decent living doing decent business online is that we are greatly disadvantaged because of some pre-conceived notion of the developed economies against Africa and Nigeria in particular, but I wont dwell much on the bad side as an optimist but will deal on the possible and well established side as a realist. What do I mean by this? The internet has become a real estate and as such many people world wide are reaping the benefits of this innovation and smiling to the bank every other day, so my main concern is to get you acquainted with the common myth that pervades the internet daily and the obvious.

Recently, online FOREX TRADING has become a niche that every person with little or no experience on money matters wants to get involved in within a short period of time (most attend one to two days seminar) and want to start reaping from it, stop! I’ll love to ask, why is it that we still have few people that are rich from trading FOREX with all the hype associated with it? Well have you stooped to think this over? But my friend like I titled this article I’ll love to list the myths, facts and the reality of online FOREX trading. Personally I don’t trade FOREX but I know of an array of people who do; and from the fillers I get daily, it is not as rosy as it sounds. You loose money and you gain money, however the tendency of loosing far out weighs that of gaining if you don’t know the fundamentals of the trade. Knowing the fundamentals is not some thing you gain the knowledge in 1, 2, 3 or even 7 days as those who advertise it in dailies will tell you. What the organizers of various FOREX seminars are after is to gain back what they have loosed trading through levying outrageous seminar fees on the participants. At the seminar they don’t take the time to explain the technical and fundamentals of the market, terms like pips, bull traps, Fibonacci analysis etc are not well explained: leaving the participant more confused than ever. But like I said earlier on, trading with no fore knowledge of the aforementioned points makes trading an experience not worth the venture.

Still on online FOREX trading, it will be unfair if I don’t mention the benefits of this online money making venture even if I’m not trading this very lucrative market (yet). Basically FOREX trading exceeds about 1.3 trillion dollars daily, so it will be mediocre of a person to jump into a market as large as this with no formal knowledge of the happenings. However ,it becomes expedient of the person to get fully into the know of this liquid market before getting his hands burnt in the process of wanting to make 100 pips a day as most of the self acclaimed FOREX experts promise you when you trade on their systems. Like I always do when posting any article, I try to make detailed research (even if I know little or not) before coming to press, and when I do it is in the form of a personal experience. While this FOREX rave reached fever pitch, every person wanted to tap into this market to reap bountifully; I decided to make my own in road. Daily, I hit every search engine on the net for a detailed report, I subscribed to every ezine, news letter, and every available publication that deals with the subject. From my findings I observed that the requirements of this market is quite tasking, however if all these requirements are met, the market is worth the venture, what are the requirements I’m talking of: they include a laptop computer connected to the internet; as you need this to enhance the mobility of the market, a domiciliary account, and a form of identity which could come in form of an international passport or national identity card and a plat form to trade on.

One day I saw an advert on a daily on a FOREX seminar that’ll last for about two days, and within these two days you will be taught all the basics required to start making between 30 to 40 pips daily (note: a pip is worth about 10 dollars). I did not attend the seminar as the seminar fee was too much, not that I can’t afford it but because the money was too much for a seminar that will last a couple of days. So I took the address of the FOREX firm and decided to pay them a visit and perhaps make more enquiries. On getting there I met a lady who looked more like a cleaner than a FOREX expert, as I was expecting to see a person who looked like those who work in wall street or if I want to sound modest like some one who works for one of the banks, then how can such a person teach me the basics of the trade for me to start making 50 pips every day!. I thought may be if she really is an expert as she claims, I figure she should be making good money as a FOREX expert and at least look good for her troubles. Is not like I’m saying that there aren’t people here in Nigeria who are doing good trading FOREX, but what I’m saying is that they are very few, this is the fact and the sooner it downs on you the better. I don’t want to sound cynical but in this business is very good for you to be very truthful to your audience, telling them the reality of every situation, instead of leading them falsely by reporting fallacies and stuff.

On the contrary, FOREX trading is a niche and can not be ignored as it has enriched many Nigerians (the few who know the rudiments of the business) as I know of a guy who takes home close to 30 to 40 pips any time he trades, do you know his secret? He sells when others are buying, and sells when others are buying. He knows where to make his stop loss and quit when it really mattered, he understands the basic trends mostly the fundamental, since with it you have a clue as to how the currencies are performing in the market relative to how the various big economies are faring. One other fact in relation to a myth pervading the scenario is that FOREX is not a vocation as the ‘experts’ will tell you. It is not some thing you do on a part time basis; rather I will say it is more of a career, since most traders do it full time. Why this is so is that you can dwell on a chart a whole day waiting for a favorable signal to begin trading, while you are in your office waiting for the required signal, your boss will be telling the secretary to prepare your sack letter and pay-off. But if you learn the ropes you work smart as a FOREX trader, knowing the best times to trade; then you can jolly well make it a vocation, rather than a career as earlier speculated. The secret is that most FOREX traders don’t trade every day. This is another fact, you only trade when there are auspicious signs. Another secret is contentment (avoid being unnecessarily greedy), when you make a good move that gives you 20 to 30 pips, is usually advisable to quit at that juncture even if you see another favorable trend. Usually such trends end with you loosing the money you already made. So be careful, as it could be very enticing as well as deceitful

 

The fact about this market is that you make money if you avoid bull traps and interpret the market trends both fundamental and technical, looking at the charts, knowing when to buy and when to sell, knowing the best currency pair (e.g. euro/dollar), knowing when to enter and when to quit and Fibonacci analysis. If you get your self acquainted with all these, then your venture into this market will be worth the while, on the contrary the myth is that you don’t, make 30-40 pips daily by just taking part in a 2 day seminar or workshop as most will call it, most self acclaimed experts introduce you to robots that trade on your behalf, well the truth about robots is that they only function according to how they are programmed. Most robots are programmed using technical analysis, but this market is very volatile and economic trends in most leading economies especially the US can affect the market negatively or positively, for example the recent recession so experienced in the US resulted into a weak dollar and like a virus it spread to other economy especially the Euro zone and Japan: so if your robot was programmed following the reverse you can figure out what happens. The reality here is that you can only make it in FOREX when you master the ropes of the market as it has been noted that about 90 percent of those who go into FOREX exit after a short period of venturing. The fact then is that FOREX trading can be lucrative as well unprofitable. Which ever side of the divide you belong the choice is yours. But I assure you that you can make a difference if you believe in your self, since many plat forms reject registration from Nigeria (another western conspiracy), for example FXSOL no longer accepts registration from Nigeria. So it is left to you to decide how to take this market by storm as I promise to give frequent updates as regards my online experiences since I’ve decided to join the trend of Nigerians making dollars form FOREX trading.

Feel free to post your comments and views on this topic, you can also get a free FOREX manual by one of the world’s best FOREX experts, contact me by email if you are in need of this manual, it is free of charge and will come as an email attachment sent free of charge to your box. You can also get e-books on how to build your internet empire for a token fee, more so many freebies are also included like the e-book ‘as a man thinketh’ by James Allen and another free e-book by Wallace D Wattles titled ‘the science of getting rich’. Just contact me via email for these rich books that will enrich your online money making experience.

Once more Mark McRae has put together an eBook that should prove essential to all forex traders. It is entitled Surefire Forex Trading and consists of 112 pages of invaluable information for traders in all phases of their careers.

With this book, which comes in pdf form, McRae presents a system that utilizes Fibonacci retracements. Instructions are very easy to follow. A calculator is included to guide the trader through trades that adhere to his risks and rewards parameters.

This manual lays out swing trade strategy probability in great detail. The eBook also includes four-hour candle charts and swing points as well as Fibonacci 38.2 for trading.The manual is broken up into six parts:

1. Theory of the Method

2. Multiple Time Records

3. Trend with Moving Averages

4. Trend Indicator

5. Fibonacci

6. Money Management

Mark McRae is a seasoned and highly respected forex trader and instructor. This eBook is only one in many that he has written for the forex market. His professional standing and proven reliability in the trading market places him at the head of the pack.

Forex traders from around the world rely on Mark McRae when it comes to instruction on how to approach the market in new ways.

Once again Mark is stirring up excitement by presenting something new to the trading market. He is also adding to the excitement by opening up his Surefire Contest once more to competitors from all over the globe. Winners in this contest are judged by their expertise in devising formulas and generating profit margins that are superior to those of the hundreds of other contestants entering this championship.

So when it comes to creating reliable instructional manuals or trading competitions, Mark McRae stands above the herd.

Forex, Foreign Exchange Market, is an International Business involves foriegn currency exchange and has a daily turnover of over 2.5 trillion US dollars. This business is based upon the constant change of currency values of one country from other country. Here money is earned selling and buying currencies of various countries in the market. The profit is obtained whenever we sell foreign currency for higher rate than we bought for. Forex trading requires high degree of knowledge and experience to get succeed in the business. It is already experienced by many business people that this is risk bearing and one who involves in this business should be ready to meet both loss and profit.

What is the Exchange Rate of Currency Pair?

The rate at which currencies exchanged is known as Exchange Rate of Currency Pair. For eg. say the current exchange rate of Euro/US is 1.425 and if the same rises to 1.625 after one year and any one had invested $1425 to buy 1000 Euros, the person could make a profit of $200 after one year. So, when the exchange rate of currency pair increases, the invester can make money.

Long Term Trading is advisable

Most of the beginners missed to get more profit as they are unaware of small currency movements. If they follow long term trading, that will enable them to make good profit in Forex. In short term trading we can not make pretty good money as we can find only very little rise in exchange rate.

Fundamental Analysis in Forex

This is very useful to take crucial decisions in the business. It’s true that currency value of every country is subject to economical and political changes happening there. Any one who trades Forex should keenly watch such changes through variety of news sources as the changes may greatly affect the currency prices. New economic policies, trade balances and foreign investments are other factors which may strongly affect the currency value of any country. We can learn economical health of any country knowing Interest Rate and International Trade of the particular country. High Interest Rate makes many investors to sell their currencies as it may affect the economy of the country. If there is any trade deficit in the country, it means money leaving for buying foreign goods. The currency value will not be affected when trade deficit is greater than market expects. To get successful trading you also need to watch out GDP which measures the value of all goods produced in the country.

Technical Analysis in Forex

Relative Strength Index(RSI), Number Theory, Gaps, and Price Time Chart are some of the important parts of Technical analysis of Forex.

Relative Strength Index

RSI is the measure to find out whether the currency is overbought or oversold. It’s nothing but ratio between upmoves and downmoves. When RSI is above 70, the instrument is assumed to be overbought and whereas the RSI standing at 30 or below 30 would be the signal that the instrument may be oversold. RSI standing between 30 and 70 indicates the neutral trade. Generally traders want to buy the currencies when the value of currencies keeps rising and when the value comes down traders start to sell them as they fear about further down in the value of currencies. However, it is always advisable to buy a currency when it is hoped to get further rise in value.

Number Theory

Fibonacci number is the amazing sequence of numbers in which every number is the sum of before lying two numbers. (1, 1, 2, 3, 5, 8. 13, 21, 34, 55, 89…..). These are ones which are used to predict the turning points of trade in advance as we can avoid any loss in our trading. The ratio of any two numbers in the above sequence will come as 62% and the inverse of 62%( i.e.) 38% is defined as Fibonacci retracement. Golden mean 0.618 which is derived from these Fibonacci Numbers has interested matematicians from last many centuries.

Gaps

Gaps are spaces left in the bar when trade has not taken place. The Up Gap is formed when the lowest price on a trading is higher than previous day’s highest price. Similarly, the Down Gap is the result of highest price on a trading which is lower than lowest price of previous day trading.

Break Out

Indeed it is very important part of trading which involves a move where new High or Low made. Many investors want to make more money despiting the new High. But, it can not be always favorable for the newbies as there is also chance for reverse break out.

Future and Option Trading in Forex

Future Trading in Forex involves buying and selling a currency pair on a fixed date in the future for an agreed price. The date when our dealing closes called as delivery date. In this type of trading we can not assure our profits as there is necessary to expect both loss or profit in trading. It is obviously true that Future Trading is not advisable for the beginners.

In Option Trading we can buy or sell the currencies when the favorable time comes. We can decide against deal in this type of trading as we can avoid our huge loss of money. But one important thing here is as we need to follow premium deposit which makes this Option Trading possible. But, premium allows us to keep option only up to a certain date called maturity date. And Maturity Date is when our deal is settled. Most of the traders prefers this kind of trading as they can easily avoid risks.

How to select our Brokers?

In this Forex Trading we can find large number of brokers with different features from all over the world. But it is advisable to select regulated brokers who find it necessary to submit financial reports to the regulatory authorities. If any one of the regulated brokers failed to submit the financial reports, they would be fined immediately and terminated from the membership. All US based brokers are submitting their financial reports at National Futures Association and Swiis based ones are submitting their reports at Swiss Federal Department of Finance.

The Advanced Technology in Forex Trading

The advanced technology of today’s Internet world has permitted people from various parts of the world involve in the Forex Trading. Online Forex Software provided with current changes in the market and up-to-date news helps traders from any part of the world to trade confidently. Most popular technical indicators used by the traders are Pivot Points, MACD , Bollinger Bands from which they can know where to enter and exit the trading.

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To figure out where commodities are going, the main questions that need to be answered are: what type of demand will come out of China and where is the US dollar going? Is the Chinese driven commodity boom over? Not over, but expect a significant slowdown. The Chinese government said that exports were down 2.2% in November from a year ago, the first decline in seven years. Imports were down almost 18%. Over the next few months commodity investors will need to closely monitor China’s economy. In terms of the dollar, after an 18% rally from mid September we have seen the dollar fold 6.5% in the last 3 weeks. We are betting that an interim top has been made and we will see a re-visit of the 75 level before we see 90 in the US dollar index. This should bode well for commodities that are priced in dollars. Deeper than that though, weakness in the US dollar should signal a modest stabilization for the global financial system as investors are becoming more willing to take some risks. Investors will remain skittish for months to come, but as the central banks race to zero, investor’s will look for other homes for their capital.

Energies:

February crude oil was up $5.43 or 12%, helped by a weaker dollar and anticipation that OPEC will announce another 1.5-2.0 M cut in production this Wednesday. We see support at $43 with resistance at $51/52. It may be premature to call a bottom, but under the right circumstances; a weakening dollar, stable stock performance and OPEC cuts, we could see a bounce to $65. The US Department of Energy said that crude oil supplies were up 400,000 barrels last week to 320.8 million barrels. Supplies of gasoline were up 3.8 million barrels, more than expected thanks to increased imports. Heating oil supplies were up 1.7 million barrels. February RBOB was 14.22 cents higher last week gaining 14% with a close back above $1.00/gallon. Support is seen at the 9 day moving average at 1.0461 followed by 1.0000 with resistance at 1.2500. To play OPEC or a potential short covering rally look at the January 110/120 call spread for $1400. This is a $4200 spread with only 9 days so you will get quick results, win or lose. Put in a gtc sell order for $3000 and if not filled look to hold until expiration with a break even at approximately 1.1350. A new low was rejected in heating oil with just under a 1 penny gain on the week. $1.50 should serve as the pivot point on the February contract. You could see a move back to the low 140’s or to 1.65. At present we would advise waiting for more evidence on the sidelines for a futures play. We do see a trade back over 2.00 over the next 3 months, traders eager to get exposure could look at the 160/180 call spreads for $2500 or the 170/190 call spread for $2000; both in March.

The US Department of Energy said underground supplies of natural gas were down 67 billion cubic feet last week to 3.291 trillion cubic feet. Supplies are now down 1% from a year ago. January natural gas was down 22 cents, pressured by warmer temperatures across the US. This is the lowest price seen since August of 04′ and currently we are long and wrong with clients positioned in February $8 calls. We are still expecting a bounce and will either use a bounce to cut losses or potentially roll the position forward depending on the magnitude of the move. We see support on January between 5.40/5.45 with first resistance at 6.00 but we expect to see a trade up to the 6.25/6.75 level, the question is when and from where?

Currencies:

The BOC met and agreed to reduce its interest rate from 2.25% to 1.50%, the lowest in 50 years. It was the sixth cut this year and 25 basis points more than most were anticipating. Even in the face of this, the Loonie gained 1.69 cents last week largely helped by gains from energies and metals. As we have pointed out in recent posts we expect the triple bottom at 77.00 in March to hold. We suggested long futures and to buy the 82 calls and 78/82 call spread in March for $1500. Look for an exit on options at $2500-3000. For new entries look for a long entry between .7850/.7900. The March Euro closed up 6.36 cents, the highest close in seven weeks, encouraged by comments from the ECB that the economy may start to recover in the second half of 09′. After a close above the 50 day moving average mid-week we saw strong follow thru to the end of the week. We could see a trade up to 1.36/1.37 but we do not see much more. Support comes in at 1.3285 and then 1.2930 with first resistance at 1.3560.

The Swiss National Bank lowered its interest rate target from 1.00% to .50%. The March Swissie gained 2.87 cents or 3.5% last week. Support has held for the last 4 weeks and we would now be exploring the long side buying dips. Support comes in at the 9 day moving average at .8366 with resistance at .8636. We expect the gap at .8821 from 10/30 to be filled in coming weeks.

The Aussie dollar was 1.65 cents higher last week which was a bit disappointing considering the rally commodity wide. Resistance is seen at last week’s high at .6757 with support at .6460 followed by .6350.

We figure perhaps the Aussie had gotten ahead of itself moving 8.5% higher in the last 3 weeks and may need time to rest. We would be positioned on the sidelines. For 6 consecutive weeks now the Japanese yen has strengthened against the greenback, gaining 1.94 cents last week and at one point trading as high as 1.1373; the highest level seen since August of 95′. If the carry trade unwind were to continue into 09′ we could see a challenge of 1.25; the highs from 95′. This would be an additional 14% increase on top of the last 4 month gains of 21%. We are currently flat with our retail clients looking for a long opportunity. Our best performing CTA which is up 120% ytd still has exposure and feels we have a way to go. They are positioned in both futures and options; contact us for more details. Support in March is seen at the 9 day moving average at 1.0850 followed by last week’s low at the 50% Fibonacci retracement levels at 1.0687. I would not be surprised to see a sharp pullback to 1.0525, which would do little chart damage. First resistance is seen at 1.1125. Japans’ central bank could cut rates on Friday from 0.3%, but we think they will hold and continue with quantitative easing.

The March pound picked up 2.40 cents last week. 1.4650 should serve as support with mild resistance coming in at 1.5100 and major resistance at 1.5350. We would be positioned on the sidelines expecting a bounce that would set up a good short opportunity.

The Kiwi dollar was only 10 ticks higher and at times was like watching paint dry. We suggest getting long futures with a stop below the previous week’s low at .5164 anticipating a move back over 60 cents in the March contract within the next few months. Patience will need to be exercised because this could be a slow mover. Interest rates after next week should be .50/.75% in the US and 5.0% in New Zealand; you do the math.

The March US dollar index fell 3.62 cents or just over 4.0%, the lowest close in seven weeks, hurt by expectations that the US will likely have to keep interest rates low for a long time. This was the largest weekly move since mid-October. Last week’s low challenged the 38.2% Fibonacci retracement with next support seen at 82.50. Resistance comes in at 85.60 and for now it appears an interim top has been established. We would advise selling rallies while the direction will largely be governed by the FOMC decision on rates, the Fed’s comments and how other markets react.

Metals:

March silver was 73 cents higher last week but remained in the $1.50 trading range we have been in for 8 weeks running. This may sound familiar because I have pointed this out the last few weeks; the significance is that we feel this market is acting like a coiled spring. The longer we see sideways action the larger the breakout; we expect the move to be to the upside. 10.50 still serves as resistance while a weekly close above that level should mean prices are on their way to $13-15. We continue to accumulate the December 09′ $15/20 call spreads and will be a buyer again this week for clients near $1700 if given the opportunity. We would be a buyer of March futures on dips looking for guidance from gold, crude and the dollar. We would start scaling into longs at 9.50 followed by 9.00 and as long as the 8.51 low from 10/28 holds, on a closing basis we like being long. Looking at the weekly charts both the stochastic and MACD still support that we are in the beginning stages of a trend reversal. The silver to gold ratio currently sits roughly at 80:1 and we feel next year it will revert back to at least 50:1. That being said if gold moves to$1000 silver should be at $20.

February gold was higher by $65.30 last week; this move mirrored the previous week’s move of $66.80 just in the opposite direction. This was a seven week high and principally caused by US dollar weakness and investors turning to gold amid financial uncertainty. $750 should continue to act as support with $835 as resistance, a level hit but not penetrated in prior weeks. A close above $835 should propel prices to $865. Although the daily movement shows tremendous volatility, looking at the weekly and monthly charts gives longer term traders cause for excitement. We have seen more notice from investors with an increase in volume and open interest in recent weeks. We have suggested to clients to look at $100 call spreads in April and June; one such idea was the June 800/900 call at $2700. Friday’s settlement was $3670.

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To find out exactly how we are positioning our clients in commodity futures and options, Contact us today at 1-888-920-9997.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Before trading MB Wealth recommends that you should carefully consider your financial position to determine if commodity trading is appropriate for you. All funds committed should be purely risk capital. Past performance is no guarantee of future trading results. There are no guarantees of market outcome stated, everything stated above are our opinions. Calculations of profit and loss have not factored in commissions and fees.