Power Forex Profit Principle

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Foundational principles in trading forex.

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Power Forex Profit Principle

  1. 1. Power
Forex
Profit
Principles
 
 SPECIAL
NOTE:
This
is
the
March,
2009
update
 to
what
I
think
is
one
of
the
most
powerful
 reports
I
have
ever
published,
and
it’s
in
direct
 response
to
the
requests
my
students
have
 been
sending
me
for
years.
They’ve
essentially
 been
pleading
with
me
to
show
them
how
they
 can
potentially
profit
in
the
Forex
markets.
 
 Here’s
the
deal:
Just
like
any
other
market,
 most
“traders”
are
losing
their
shirt
when
they
 trade
Forex.
That’s
mainly
because
they’re
 going
about
it
all
wrong,
and
many
have
been
 mislead
by
unscrupulous
individuals
or
 questionable
brokers
promising
seemingly
 overnight
riches.
 
 Forex
is
still
a
little
like
the
“wild
west”,
so
 there’s
naturally
a
lot
of
confusion
and
 misinformation
out
there.
In
this
special
report,
Power
Forex
Profit
Principles,
I’m
 going
to
cover
many
tactics
and
strategies
used
by
successful
Forex
traders
all
 over
the
world.
But
unfortunately,
only
about
5
to
10
percent
of
all
Forex
traders
 are
actually
aware
of
this
information.
I
would
strongly
suggest
you
print
out
this
 report
and
read
it
more
than
once.
 
 
 
 
 Good
Trading,
 
 Bill
Poulos
 
 Copyright
©
Profits
Run,
Inc.
 Page
1
of
1
 

  2. 2. Power
Forex
Profit
Principles
 
 PLEASE
PRINT
THIS
REPORT
NOW!
 Please
take
a
few
seconds
and
print
this
entire
report
 right
now.

Here’s
why:
 
  When
you
print
this
report
out,
the
chances
that
 you’ll
actually
read
it
and
learn
something
new
 about
trading
the
Forex
markets
will
increase
 dramatically.

I
have
a
collection
of
digital
reports
 on
my
computer,
and
the
only
ones
I’ve
read
all
 the
way
through
are
the
ones
I’ve
printed
out.
 
  When
you
print
this
report
out,
you
can
read
it
 anywhere
in
your
house
(or
on
the
road,
for
that
 matter).

I
love
my
family,
but
my
office
is
smack
 dab
in
the
middle
of
the
house,
so
it’s
a
high
traffic
 area.

Sometimes
the
only
way
I
can
get
a
solid
 chunk
of
time
to
read
something
I
find
online
is
if
I
 print
it
out
and
take
it
somewhere
else
in
the
 house.
 
  There
is
an
activity
in
this
report
that
requires
you
 to
answer
some
questions.

The
impact
of
this
 activity
will
be
much
greater
if
you
actually
get
out
 a
pencil
or
pen
and
actually
write
on
this
report.

I
 highly
recommend
you
spend
a
few
moments
 completing
this
activity.

Your
future
could
depend
 on
it.
 
 Copyright
©
Profits
Run,
Inc.
 Page
2
of
2
 

  3. 3. Power
Forex
Profit
Principles
 
 DISCLAIMER:

Forex
(off‐exchange
foreign
currency
futures
and
options
or
FX)
trading
involves
 substantial
 risk
 of
 loss
 and
 is
 not
 suitable
 for
 every
 investor.
 The
 value
 of
 currencies
 may
 fluctuate
and
investors
may
lose
all
or
more
than
their
original
investments.

Risks
also
include,
 but
are
not
limited
to,
the
potential
for
changing
political
and/or
economic
conditions
that
may
 substantially
 affect
 the
 price
 and/or
 liquidity
 of
 a
 currency.
 The
 impact
 of
 seasonal
 and
 geopolitical
 events
 is
 already
 factored
 into
 market
 prices.
 The
 leveraged
 nature
 of
 FX
 trading
 means
 that
 any
 market
 movement
 will
 have
 an
 equally
 proportional
 effect
 on
 your
 deposited
 funds
and
such
may
work
against
you
as
well
as
for
you.
The
use
of
leverage
can
lead
to
large
 losses
 as
 well
 as
 gains.
 Under
 certain
 conditions
 you
 may
 fins
 it
 impossible
 to
 liquidate
 a
 position.
 This
 can
 occur,
 for
 example,
 when
 a
 market
 becomes
 illiquid.
 The
 placement
 of
 contingent
orders
by
you,
such
as
“stop‐loss”
or
“stop‐limit”
orders
will
not
necessarily
limit
or
 prevent
losses
because
market
conditions
may
make
it
impossible
to
execute
such
orders.
In
no
 event
should
the
content
of
this
correspondence
be
construed
as
an
express
or
implied
promise
 or
guarantee
that
you
will
profit
or
that
losses
can
or
will
be
limited
in
any
manner
whatsoever.
 Past
 results
 are
 no
 indication
 of
 future
 performance.
 Information
 contained
 in
 this
 correspondence
 is
 intended
 for
 informational
 purposes
 only
 and
 was
 obtained
 from
 sources
 believed
to
be
reliable.
Information
is
in
no
way
guaranteed.
No
guarantee
of
any
kind
is
implied
 or
possible
where
projections
of
future
conditions
are
attempted.

Revision
06‐20090308.
 
 Copyright
©
Profits
Run,
Inc.
 Page
3
of
3
 

  4. 4. Power
Forex
Profit
Principles
 
 100,000
Traders
&
Their
Forex
Frustrations
 
 Dear
Trader,
 
 The
information
you
hold
in
your
hands
(or
are
viewing
on
your
computer)
has
 the
potential
to
dramatically
increase
the
pips
you
pull
out
of
the
Forex
markets,
 and
it
does
have
the
potential
to
change
your
life.
That’s
not
hype,
because
the
 potential
is
real.
It’s
up
to
you
to
make
it
happen,
and
my
goal
with
this
report
is
 to
help
you
discover
in
hours
and
days
what
took
me
decades
to
realize
about
 success
in
the
markets.
 
 I’ve
been
trading
the
markets
since
 1974,
and
I’ve
been
teaching
thousands
 of
students
around
the
world
what
it
 takes
to
succeed
in
the
markets
since
 2001.
So
some
people
think
of
me
as
a
 “grizzled”
trading
veteran
because
I’ve
 seen
so
much
over
the
past
3
decades.
 Sure,
I’ve
scraped
my
knees
and
have
 been
through
a
few
bumps
and
bruises
 over
the
years,
but
I
see
myself
as
a
filter
 for
you,
or
someone
who
has
the
ability
 to
sift
through
all
the
junk
and
noise
 that’s
out
there
and
tell
it
to
you
like
it
 is.
 
 So,
I
may
come
across
a
little
harsh
in
 this
report,
but
I
don’t
believe
in
sugar‐ coating
anything
or
giving
you
false
 hopes
of
success.
There
are
enough
 swindlers
doing
that
already.
I
want
to
 give
you
the
facts,
like
‘em
or
not,
so
you’re
empowered
to
take
action
and
make
 positive
decisions
on
how
to
succeed
in
the
Forex
markets.
 
 They
Nearly
Begged
Me
to
Help
Them
 
 For
years
now,
my
students
and
readers
have
been
pleading
with
me
to
show
 them
how
to
trade
the
Forex
markets.

And
many
of
them
actually
took
my
stock
 trading
courses
and
started
telling
me
about
all
the
money
they
were
making
by
 applying
those
courses
to
the
Forex
markets.

They
essentially
proved
to
me
what
 
 Copyright
©
Profits
Run,
Inc.
 Page
4
of
4
 

  5. 5. Power
Forex
Profit
Principles
 
 I
knew
to
be
true
–
markets
are
markets.
There’s
nothing
magical
about
the
Forex
 markets,
because
all
markets
are
ultimately
driven
by
human
psychology
–
fear
 and
greed
–
and
supply
and
demand.

Sure,
every
market
has
its
own
 peculiarities,
but
if
you
understand
how
the
basic
drivers
of
human
emotions
 work,
you
can
potentially
succeed
big
in
any
market.
 
 As
I
researched
the
answers
to
my
students’
questions
about
Forex,
the
more
I
 realized
that
too
many
traders
were
getting
“suckered”
and
“taken”
by
less‐than‐ honest
Forex
“brokers”,
as
well
as
the
“holy
grail”
peddlers
who
were
preying
 upon
the
wide‐eyed
desperation
of
traders
who
think
they
can
“get
rich
quick”
 trading
the
popular
Forex
markets.
 
 Excuse
me,
but
what
I
found
was
disgusting.

I
found
more
misinformation,
lies,
 and
hype
about
Forex
that
I
had
seen
in
some
time.
And
that’s
when
I
decided
to
 put
all
my
energy
into
dispelling
this
junk
so
I
could
give
my
students
and
readers
 a
source
of
factual,
actual,
solid,
realistic
Forex
Profit
Principles
that
they
could
 use
to
potentially
profit
in
the
Forex
markets
again
and
again.
 
 So
to
make
sure
I
didn’t
miss
any
big
questions
or
concerns,
I
surveyed
over
 100,000
active
traders
several
times
and
asked
them
one
question:
 
 If
you
could
sit
down
and
have
lunch
with
me,
what
is
the
top
question
 you
would
ask
me
about
Forex
trading?
 
 That’s
it.
Plain
and
simple.
 
 Almost
immediately,
the
questions
began
to
pour
in.
You
know
what
it’s
like
 Monday
morning
when
you
check
your
email
and
there’s
a
ton
of
it
from
over
the
 weekend?
Well,
it
was
like
that
multiplied
by
a
hundred,
or
a
thousand.

People
 were
confused
more
than
I
realized
about
Forex.
 
 Then,
more
recently,
I
asked
a
similar
question
but
this
time
I
asked
my
readers
 to
post
their
reply
to
my
Forex
blog.
Once
again,
hundreds
upon
hundreds
of
 comments
were
posted.
And
the
amazing
thing
was
that
the
comments,
 questions,
and
challenges
were
nearly
identical
to
my
prior
survey!
 
 I
Was
Shocked
and
Excited
 
 Quite
honestly,
these
responses
overwhelmed
me.

At
first
I
thought
to
myself,
 “How
can
I
possibly
address
all
these
questions?
There’s
just
not
enough
time
to
 
 Copyright
©
Profits
Run,
Inc.
 Page
5
of
5
 

  6. 6. Power
Forex
Profit
Principles
 
 do
it!”

But
then
I
noticed
something
amazing
–
I
started
seeing
the
same
 questions
over
and
over.

So
I
began
to
put
them
into
categories,
and
after
a
long
 12
hour
day,
I
was
shocked
and
excited.
 
 Why?
 
 Well,
I
was
shocked
to
find
that,
indeed,
 most
of
the
questions
fell
neatly
into
a
 handful
of
broad
categories.

But
I
was
 excited
because
I
had
personally
 experienced
what
all
these
questions
 were
asking.

And
I
knew
without
a
 shadow
of
a
doubt
that
I
could
help
 these
traders.
 
 But
it
gets
better,
because
I
realized
that
 if
a
survey
of
100,000
traders
resulted
in
 a
core,
common
set
of
questions,
then
 millions
of
traders
all
around
the
world
 probably
had
the
same
concerns.
 
 So
this
report,
the
Power
Forex
Profit
 Principles,
is
my
answer
to
the
top
 questions
I
received
from
my
readers
and
students
about
Forex
trading.

Now
 let’s
get
right
into
the
“nitty
gritty”
and
clear
up
these
questions
once
and
for
all.
 
 Are
you
ready?
Let’s
begin.
 
 Are
You
Dependent…
or
Independent?
(NEW)
 
 When
it
comes
to
trading
Forex
(or
any
market),
I
find
there
are
two
types
of
 traders.
And
the
type
of
trader
you
are
could
drastically
impact
the
amount
of
 money
you
make
in
the
markets…
it
could
even
forever
determine,
in
part,
what
 the
rest
of
your
life
looks
like,
how
much
longer
you
work
a
regular
job,
where
 you
go
on
vacation
(and
how
often),
where
you
live,
and
even
your
overall
health.
 
 That
may
sound
like
an
exaggeration,
but
if
you
plan
on
supplementing
or
 replacing
your
current
income
with
trading
Forex,
then
I
think
you’ll
find
those
 statements
above
are
quite
accurate.
Here’s
why…
 
 
 Copyright
©
Profits
Run,
Inc.
 Page
6
of
6
 

  7. 7. Power
Forex
Profit
Principles
 
 You’re
probably
well
aware
at
this
stage
in
your
life
that
anything
that
requires
 almost
little
or
no
effort
produces
limited,
temporary,
or
nonexistent
results.
And
 that
anything
that
requires
you
to
think
for
yourself
produces
lasting,
ongoing,
 and
perhaps
even
permanent
results.
 
 This
is
especially
true
when
it
comes
to
trading
the
Forex
markets.

 
 Over
the
years,
I’ve
observed
that
there
are
two
types
of
“traders”.
Now,
I
realize
 these
are
generalizations,
but
they
illustrate
two
very
common
mindsets.
Which
 one
are
you?
 
 The
Dependent
Trader:
This
type
of
person
is
usually
looking
for
the
easy
way
 out,
looking
to
make
a
quick
buck,
or
wants
to
strike
it
rich.
They
think
it’s
 possible
to
“follow
the
crowd”,
blindly
place
trades
pumped
out
by
a
system
that
 “can’t
lose”,
and
quit
their
job.
The
bottom
line
is
that
this
type
of
trader
is
 dependent
on
someone
else
for
their
financial
success
–
forever,
for
life.
Yes,
The
 Dependent
Trader
can
be
successful
with
this
attitude,
but
I
believe
the
odds
of
 success
are
low
(probably
around
5%).
 
 The
Independent
Trader:
This
type
of
person
wants
to
have
as
much
control
of
 their
financial
destiny
as
possible.
They
understand
that
when
they
know
how
the
 markets
work,
they’re
empowered
to
place
informed
trades
without
having
to
 rely
on
someone
else.
Someone
who
is
an
Independent
Trader
knows
they
are
 maximizing
their
odds
of
success
in
the
markets,
which
can
make
their
financial
 and
lifelong
dreams
come
true
that
much
more
quickly.
The
bottom
line
is
that
 this
type
of
trader
holds
the
keys
to
the
kingdom,
and
has
control
of
their
 financial
future
for
their
entire
life,
no
matter
what
happens.
 
 If
you
think
you
might
have
a
little
of
the
Dependent
Trader
mentality
in
you,
 that’s
OK.
I
understand,
because
you
are
not
alone.
It’s
only
natural.
But
when
 you
learn
to
break
out
of
that
mindset
and
move
toward
becoming
an
 Independent
Trader,
everything
can
begin
to
change.
 
 That’s
why
one
of
my
goals
with
this
report
is
to
help
make
you
an
Independent
 Trader.

Will
this
report
alone
do
it?
No,
of
course
not.
However,
it
should
give
 you
a
“fast
track”
toward
discovering
the
right
way
to
trade
the
Forex
markets
for
 you.
 
 I
want
you
to
understand
and
feel
the
power,
peace
of
mind,
and
excitement
that
 come
with
placing
a
trade
independently.
Everything
makes
sense.
Everything
is
 
 Copyright
©
Profits
Run,
Inc.
 Page
7
of
7
 

  8. 8. Power
Forex
Profit
Principles
 
 done
for
a
reason.
You
know
what
to
do,
no
matter
what
the
market
does.
Every
 single
time.
 
 It’s
awesome…
 
 The
Current
State
of
the
Forex
Market
(NEW)
 
 Forex
is
more
popular
than
ever.
Let’s
take
a
look
at
the
average
daily
turnover
in
 the
Forex
markets
over
the
past
20
years.

 
 $3.2
TRILLION
a
day
in
2007,
with
no
signs
of
slowing
down.
This
spells
 opportunity
for
you
as
a
Forex
trader,
and
this
is
one
of
the
best
times
I
can
recall
 to
learn
to
trade
and
to
start
trading
the
enormously
popular
and
potentially
 profitable
Forex
markets.
 
 Why?
 
 With
the
world’s
financial
markets
in
turmoil,
mega
trends
in
the
Forex
markets
 have
seldom
been
better.

You
see,
the
pressures
that
are
causing
disruption
in
 
 Copyright
©
Profits
Run,
Inc.
 Page
8
of
8
 

  9. 9. Power
Forex
Profit
Principles
 
 the
stock
markets
around
the
world
are
also
causing
awesome
trading
 opportunities
in
the
Forex
markets.


 
 With
Forex
you
don’t
need
to
wonder
when
the
market
will
stop
going
down
or
 when
it
will
recover
and
how
long
that
will
take.

With
Forex,
the
six
major
pairs
 are
almost
always
up
or
down
in
what
I
call
mega
trends,
providing
trading
 opportunities
right
here,
right
now.

 
 The
problem,
though,
is
that
too
many
traders
aren’t
sure
how
to
take
advantage
 of
those
opportunities,
or
how
to
spot
those
trades
they
could
be
making.

Or
if
 you
have
never
traded
the
Forex
markets,
you’re
wondering
about
how
you
 could
participate.

Or
you
are
wondering
how
to
control
risk
and
get
into
a
free
 trade
situation
when
trading
these
markets.

If
you’re
like
many
individuals,
then
 you
know
you
must
control
risk
first
and
foremost,
but
aren’t
sure
how
to
do
 that.
 
 As
of
this
writing,
the
U.S.
Dollar
has
rallied
against
most
major
currencies,
the
 continued
economic
fallout
from
the
housing,
banking
and
credit
crises,
and
the
 weakening
economy,
but
the
risk
of
massive
dollar
inflation
in
the
face
of
the
 unprecedented
U.S.
government
spending
could
at
some
point
send
the
dollar
in
 reverse.

But
regardless
of
what
happens
from
here
the
Dollar
will
continue
to
 provide
great
trading
opportunities
versus
the
other
major
currencies
time
and
 time
again
and
you
can
be
sure
someone
will
be
riding
a
long
run
of
hundreds,
or
 even
thousands
of
pips
as
it
does.
 
 Why?
Because
as
governments
around
the
world
scramble
to
provide
liquidity
to
 the
credit
markets
and
refloat
the
economies,
they
will
be
directly
impacting
the
 value
of
their
respective
currencies
as
they
relate
to
one
another
which
then
acts
 to
drive
the
six
major
currency
pairs
up
or
down
in
very
tradable
trends.
 
 Economists
and
other
media
gurus
are
all
trying
to
predict
what
will
happen
to
 the
economy,
when
it
will
recover
and
when
the
stock
markets
will
recover.

All
 of
this
is
generally
unknowable,
but
Forex
traders
don’t
have
to
wait
for
a
 recovery.
 
 At
first
glance,
you
might
take
such
gloomy
reporting
by
the
governments,
the
 economists,
and
the
media
and
ask,
“Why
would
I
want
to
trade
in
this
market?”
 
 Here’s
why:
Those
economic
difficulties
around
the
world
create
trading
 opportunities
almost
daily.
And,
as
I
said,
right
now,
they
are
creating
 
 Copyright
©
Profits
Run,
Inc.
 Page
9
of
9
 

  10. 10. Power
Forex
Profit
Principles
 
 extraordinary
opportunities
in
the
Forex
markets.

When
a
mega
trend
develops,
 you
have
the
opportunity
to
get
on
board
and
ride
the
trend
and
then
get
off
 before
the
trend
reverses.
Which
means
this
is
a
great
time
to
begin
trading
 Forex
because
you
could
have
the
opportunity
to
catch
a
huge
run.
 
 This
is
also
the
best
time
to
LEARN
to
trade
Forex
because
you
can
take
your
 trading
method
as
you
learn
it
and
apply
it
to
the
markets
to
watch
those
 breakouts
happen.
Plus,
you’ll
be
able
to
get
a
real
hands‐on
experience
 understanding
how
those
breakouts
form,
where
you
would
enter
and
exit
the
 market
and
how
you
would
protect
yourself
with
proper
risk
management.
 
 So,
if
you’ve
been
sitting
on
the
sidelines
waiting
to
trade
Forex,
I
think
now
is
 one
of
the
best
times
to
begin
or
to
learn
to
trade
Forex
because
of
the
great
 trends
driven
by
the
economic
turmoil
in
the
world.
 
 The
Forex
markets
are
creating
trading
opportunities
right
now.
If
you’ve
been
 missing
those
market‐moving
opportunities,
don’t
miss
another
one.
 
 I
think
it’s
important
to
say,
though,
that
as
 Forex
trading
continues
to
gain
popularity
 one
of
the
underlying
problems
you
may
face
 is
the
idea
that
you
must
trade
Forex
‘to‐the‐ minute’
(or
day
trade)
–
this
drives
you
out
of
 the
picture
if
you
can’t
commit
that
kind
of
 time,
and
it
creates
inevitable
losses
if
you’re
 ill‐prepared
for
the
demands
of
day
trading.
 
 I
believe
this
talk
about
having
to
day
trade
 Forex
is
wrong;
that
it
is,
in
part,
driven
by
 brokers,
who
earn
the
difference
in
the
 spread
on
every
trade,
and
who
would
 naturally
want
the
constant
flow
of
spread
 profits.
 
 Can
you
day
trade
Forex?
Yes.
(I
even
have
a
 Forex
day
trading
method
I
teach
my
 students
who
can
handle
it
–
but
it’s
not
for
 everybody.)
 
 Do
you
have
to?
Not
at
all.
 
 Copyright
©
Profits
Run,
Inc.
 Page
10
of
10
 

  11. 11. Power
Forex
Profit
Principles
 
 
 In
fact,
recent
analysis
of
part
of
the
online
advertising
world
confirms
that
 brokers
dominate
several
sectors
of
the
Forex
advertising
landscape,
even
to
the
 point
of
driving
up
ad
costs.
At
first
glance,
this
would
appear
counterproductive,
 until
you
realize
the
influx
of
hundreds
of
thousands
of
new
traders
to
Forex
is
 paying
for
itself
in
the
form
of
new
accounts
and
spiraling
spread
profits.
 
 With
more
companies
coming
online
to
offer
services
related
to
Forex,
you
must
 take
a
smart
approach
to
trading
currencies.
There
is
a
logical
reason
that
the
 number
of
brokers
offering
Forex
trades
has
increased
dramatically
over
the
last
 few
years:
brokers
are
making
money
on
your
trades,
whether
you
do
or
not.

 
 In
fact,
you
should
repeat
that
line
to
yourself:
 
 My
Forex
broker
makes
money
whether
I
do
or
not.
 
 This
is
not
to
blame
brokers,
but
it
is
to
point
out
what
is
a
simple
fact:
if
you,
the
 trader,
do
not
take
an
educated
approach
to
trading
Forex,
you
will
lose
your
 money.
 
 It
should
also
remind
you
that
you
need
to
know
HOW
to
trade
Forex.
You
must
 have
a
complete
trading
method
that
helps
you
take
advantage
of
every
 opportunity
the
market
offers.
 
 While
Forex
presents
exciting
and
profitable
trading
opportunities,
it
is
very
 important
that
you
learn
how
to
trade
currencies
and
that
you
have
a
trading
 plan
that
you
can
execute
every
day
of
the
week
–
no
matter
what
happens
in
 the
markets.
 
 Too
many
traders
have
jumped
into
the
Forex
waters
without
proper
planning
or
 learning,
and
have
drowned.

Don’t
be
one
of
them.
 
 Instead,
be
one
of
the
successful
Forex
traders
who
have
a
solid
trading
method
 and
execute
their
trading
plan
diligently
to
take
money
out
of
the
market,
again
 and
again.
 
 
 Copyright
©
Profits
Run,
Inc.
 Page
11
of
11
 

  12. 12. Power
Forex
Profit
Principles
 
 I
hear
a
lot
about
Forex
trading
and
am
very
 interested
in
learning
more
about
it.
Can
you
give
 me
a
brief
overview
of
the
basics
of
Forex?
 
 Unlike
stocks
and
futures
that
trade
through
exchanges
or
the
NASDAQ,
Forex
 trading
is
done
through
market
makers
that
include
major
banks
as
well
as
small
 to
large
brokerage
firms
located
around
the
world
who
collectively
make
a
 market
on
a
24/7
basis.

The
Forex
market
is
always
“open”
and
is
the
largest
 financial
network
in
the
world
(daily
average
turnover
of
trillions
of
dollars).
 
 Forex
trading
involves
trading
currency
pairs
such
as
the
EUR/USD
pair
(Euro/US
 dollar
pair)
where
a
buyer
of
this
pair
would
actually
be
buying
the
Euro
and
 simultaneously
selling
short
the
US
dollar.
 
 The
format
of
a
Forex
pair
is
YYY/ZZZ,
where
the
first
currency
is
called
the
“base”
 currency
and
the
second
currency
is
called
the
“counter”
currency.

The
price
for
 a
Forex
pair
is
expressed
in
terms
of
the
counter
currency.
 
 For
example,
the
price
of
the
EUR/USD
pair
is
expressed
in
US
dollars
(the
 counter
currency)
as
1.3667.

This
means
that
the
base
currency,
the
Euro
in
this
 case,
equals
US$
1.3667.


The
price
of
the
USD/JPY
pair
is
expressed
in
Japanese
 Yen
as
108.02,
because
for
this
pair
the
Japanese
Yen
is
the
counter
currency.

 This
means
that
the
base
currency,
the
US
dollar
in
this
case,
equals
108.02
 Japanese
Yen.

 
 Prices
are
expressed
in
pips,
which
are
nothing
more
than
the
minimum
 increment
that
a
currency
pair
price
can
change.

For
example,
if
the
EUR/USD
 price
changes
from
1.3790
to
1.3791,
the
price
is
said
to
have
gone
up
by
1
pip.

 Most
major
pairs
are
priced
to
4
decimals
which
is
the
equivalent
of
1/100th
of
 one
percent.

The
exception
would
be
the
Japanese
Yen
pair
that
only
trades
to
2
 decimals.

This
is
because
there
are
usually
over
100
yen
to
the
dollar.
 
 Forex
pair
quotes
are
on
a
bid‐ask
basis.

The
bid
is
the
price
that
the
market
is
 willing
to
pay
a
seller
at
a
point
in
time
for
a
specific
currency
pair.

The
ask
is
the
 price
that
the
market
is
willing
to
sell
to
a
buyer
at
a
point
in
time
for
a
specific
 currency
pair.

The
difference
between
the
bid
and
the
ask
is
called
the
bid/ask
 spread.

For
example,
a
typical
EUR/USD
quote
could
be
1.3784
bid
1.3787
ask
 which
is
a
spread
of
3
pips.

Since
the
spread
is
how
the
market
makers
are
 compensated,
there
is
no
commission
when
placing
a
trade.


 
 Copyright
©
Profits
Run,
Inc.
 Page
12
of
12
 

  13. 13. Power
Forex
Profit
Principles
 
 
 Also,
it
is
important
to
note
that
the
spread
will
vary
depending
on
market
 conditions.


So
the
quote
itself
for
any
given
Forex
pair
is
the
bid‐ask
 combination
at
a
point
in
time
based
on
the
market
driven
floating
exchange
 rate.

The
quotation
lists
the
bid
price
first,
then
the
ask
price.

For
the
EUR/USD
 example
above,
the
quote
would
be
expressed
simply
as
1.3784/1.3787
or
 1.3784/87.
 
 Trading
is
done
in
lots,
either
100,000
unit
standard
or
10,000
unit
mini
lots.

For
 example,
for
a
standard
lot
purchase,
if
the
EUR/USD
quote
was
1.3784/1.3787,
 then
buying
an
EUR/USD
pair
means
buying
100,000
Euros
and
selling
short
 $137,870
US
dollars.

Therefore,
for
a
standard
lot
in
which
the
USD
is
the
 counter
currency,
1
pip
will
equal
$10
($1
for
a
mini
lot).

For
other
major
counter
 currency
pairs
1
pip
will
range
from
$8
to
$10.


 
 Forex
dealers
offer
leverage
as
high
as
100:1
and
sometimes
higher.

At
100:1
 leverage,
1
standard
lot
pair
in
which
the
USD
in
the
base
currency
would
require
 $1,000
in
margin
($100,000/100).

On
the
other
hand,
a
1
mini
lot
pair
would
 require
only
$100
in
margin
($10,000/100).

If
the
account
value
falls
below
the
 margin
requirement,
the
dealer
will
close
out
the
trade
automatically.
 
 How
do
the
Forex
markets
 operate
on
a
24
hour
basis?
 
 Active
trading
sessions
in
each
country’s’
financial
centers
around
the
world
take
 place
from
Sunday
5:00PM
EST
to
Friday
5:00PM
EST.

For
the
major
financial
 centers,
trading
starts
in
Sydney,
then
moves
to
each
financial
center
in
this
 order:

Tokyo,
London
(and
Europe),
New
York.

The
daily
session
for
daily
 charting
purposes
“ends”
at
5:00PM
EST
(coincident
with
the
New
York
“close”),
 but
the
market
does
not
actually
close.
 
 Here
are
the
time
intervals
for
each
of
the
major
financial
centers
expressed
as
 EST.
 
  Sydney
session
starts
at
5:00
pm
and
ends
around
2:00
am.
  Tokyo
session
begins
at
7:00
pm
and
ends
around
4:00
am.
  London
opens
at
3:00
am
and
ends
around
12:00
am.
  New
York
session
opens
at
8:00
am
and
ends
around
5:00
pm.
 
 Copyright
©
Profits
Run,
Inc.
 Page
13
of
13
 

  14. 14. Power
Forex
Profit
Principles
 
 
 To
give
you
a
visual
representation
of
this,
here’s
a
figure
showing
the
same
 business
hours
for
the
various
regions.
In
this
figure
you
can
see
the
overlap
 between
the
London
(and
Europe)
session
and
the
New
York
session,
between
8
 am
and
11
am
EST.
The
currency
markets
experience
the
highest
volatility
and
 volume
during
that
overlap,
which
also
coincides
with
the
releases
of
important
 US
economic
releases.
 
 
 Figure
1
‐
Forex
Markets
Timeline
 Can
you
take
me
through
a
typical
trade
scenario?
 
 Let’s
say
the
current
bid/ask
quote
for
EUR/USD
is
1.3802/05
and
you
want
to
 buy
the
pair
because
you
think
the
Euro
is
going
to
gain
on
the
US
dollar.

So
you
 buy
1
standard
lot.

When
you
do
that
you
are
actually
buying
100,000
Euros
(1
 standard
lot)
for
$138,050
US
dollars
(100,000
x
1.3805).

At
100:1
leverage,
your
 initial
margin
deposit
would
be
$1,381
for
this
trade.


 
 So
in
our
example,
let’s
say
the
Euro
pair
goes
up
and
is
now
trading
at
1.3865/68
 and
you
decide
to
sell
and
take
profits.

You
would
then
sell
your
1
standard
lot.

 When
you
do
that
you
are
actually
selling
100,000
Euros
(1
standard
lot)
for
 $138,650
US
dollars
(100,000
x
1.3865).

Since
you
bought
100,000
Euros
for
 $138,050
and
sold
them
for
$138,650,
you
made
a
profit
of
$600
or
60
pips.


 
 If
on
the
other
hand
the
Euro
pair
went
down
to
1.3775/78
and
you
sold
at
 1.3775,
you
would
have
a
loss
of
$300
($138,050
‐
$137,750).

And
again,
if
the
 account
equity
fell
below
the
margin
requirement,
the
trade
would
be
 automatically
liquidated.

However,
this
should
never
happen
to
you
if
you
follow
 sound
risk
management
rules.
 
 
 Copyright
©
Profits
Run,
Inc.
 Page
14
of
14
 

  15. 15. Power
Forex
Profit
Principles
 
 What
types
of
orders
do
I
use
with
Forex
trading?
 
 There
are
different
order
types
for
 different
trading
needs.
 
 Market
Order:

This
order
type
is
used
to
 enter
or
exit
the
market
immediately
at
 the
current
quoted
price.

If
you
want
to
 buy
you
will
be
filled
at
the
asking
price.

 If
you
want
to
sell
you
will
be
filled
at
the
 bid
price.
 
 Limit
Order:

This
order
type
is
used
to
 buy
or
sell
a
pair
at
a
predetermined
 price.

A
buy
limit
order
will
only
be
filled
 if
the
market
trades
(ask)
at
or
below
the
 limit
price.

A
sell
limit
order
will
only
be
 filled
if
the
market
trades
(bid)
at
or
 above
the
limit
price.
 
 Stop
Order:

This
order
type
is
used
to
buy
or
sell
a
pair
at
a
predetermined
price.

 A
buy
stop
order
will
only
be
filled
if
the
market
trades
(ask)
at
or
above
the
stop
 price.

A
sell
stop
order
will
only
be
filled
if
the
market
trades
(bid)
at
or
below
 the
stop
price.
 
 How
much
can
I
expect
to
make
with
Forex
trading?
 
 It
is
very
important
to
have
realistic
expectations.

The
truth
is
that
Forex
trading
 is
not
a
get
rich
quick
proposition,
despite
all
of
the
hype
to
the
contrary.

That
 does
not
mean
though
that
there
isn’t
money
to
be
made.
 
 One
of
the
appeals
of
Forex
trading
is
the
great
leverage
that
is
offered.

 However,
leverage
can
work
for
or
against
you
and
therefore
it
is
critical
that
you
 follow
good
trading
methods
along
with
sound
risk
management
principles
to
 have
the
opportunity
to
unlock
the
profit
potential
that
the
Forex
markets
have
 to
offer.


 
 
 Copyright
©
Profits
Run,
Inc.
 Page
15
of
15
 

  16. 16. Power
Forex
Profit
Principles
 
 Forex
seems
to
be
quite
different
from
 trading
stocks.

What
are
the
benefits
and
 risks
in
comparison
and
would
a
much
 bigger
account
be
needed?

 
 In
addition
to
the
Forex
attributes
explained
in
the
“basics
of
Forex
question”
 above,
the
Forex
markets
are
indeed
different
from
the
stock
markets
in
that
 their
price
behavior
is
different
with
usually
more
abrupt
price
swings.

This
 requires
different
trading
methods
than
those
typically
used
for
stocks
in
order
to
 take
full
advantage
of
the
profit
potential
that
Forex
has
to
offer
while
at
the
 same
time
designing
the
right
strategy
to
minimize
risk.


 
 On
the
other
hand,
they
are
alike
in
that
both
Forex
and
stocks
are
markets
that
 develop
repeatable
price
behavior
that
present
profit
opportunities
for
those
 traders
with
good
trading
methods,
sound
money
management
principles
and
 disciplined
trading.
 


 Because
of
the
high
leverage
that
Forex
offers,
Forex
positions
require
a
much
 smaller
account
size
than
do
stocks
trading
similar
sized
positions
as
Forex
margin
 requirements
are
much
smaller
than
stock
margin
requirements.

And
so
the
 reward
can
be
much
greater
with
Forex,
but
at
the
same
time,
the
risk
is
much
 greater.
But
this
can
be
dealt
with
effectively
with
good
trading
tactics
and
good
 money
management
rules
that
allow
for
maximizing
profit
potential
and
 minimizing
risk.
 How
do
I
find
a
reliable
Forex
broker?
 
 Unlike
stock
and
futures
brokers,
not
all
Forex
brokers
are
regulated.


It
is
very
 important
to
open
an
account
with
a
regulated
broker
or
bank
that
is
a
registered
 member
of
a
regulating
body.

Since
there
is
no
central
market,
there
is
no
global
 regulatory
agency
responsible
for
monitoring
the
activity
of
the
currency
 markets.
Therefore,
regulation
is
left
to
each
country.



 
 In
the
United
States
the
Federal
Reserve
Bank
monitors
the
banking
system
and
 the
Commodity
Futures
Trading
Commission
(CFTC)
has
jurisdiction
over
all
 Futures
and
Forex
activity.
When
trading
in
the
foreign
exchange
markets,
 individuals
should
only
trade
with
a
CFTC
registered
entity
that
is
also
a
member
 of
the
National
Futures
Association
(NFA)
and
is
regulated
by
the
CFTC.
For
non‐ 
 Copyright
©
Profits
Run,
Inc.
 Page
16
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16
 

  17. 17. Power
Forex
Profit
Principles
 
 US
broker/
bank
entities,
be
sure
that
the
broker
or
bank
is
registered
with
that
 country’s
appropriate
regulatory
bodies.
 
 In
addition
to
working
with
a
regulated
broker,
you
want
a
broker
that
has
low
 spreads.
These
spreads
are
calculated
in
pips,
which
is
the
difference
between
 the
price
at
which
a
currency
can
be
bought
and
the
price
at
which
it
can
be
sold
 at
any
given
point
in
time.
This
is
how
the
forex
brokers
or
banks
make
their
 money
since
they
don’t
charge
commissions.
So,
obviously,
lower
spreads
will
 save
you
more
money.
 
 Trading
tools
are
also
very
important
 when
choosing
a
Forex
broker.
 Specifically,
you
want
a
broker
that
will
 give
you
good
charting
and
trading
 software
that
has
the
ability
to
plot
the
 indicators
that
your
trading
method
 uses.
This
brings
up
an
important
point.
 You
should
never
go
looking
for
charting
 software
first
and
then
try
to
use
or
 develop
a
trading
method.

 
 Instead,
you
should
first
get
educated
on
 a
good
trading
method
(or
develop
your
 own)
and
then
find
charting
software
 that
will
let
you
implement
this
method.
 I’ve
seen
too
many
traders
stubbornly
 use
inadequate
charting
software
just
 because
their
broker
gave
it
to
them.
 Don’t
make
this
mistake.

 
 Thankfully,
unlike
stock
brokers,
many
forex
brokers
do
provide
you
with
very
 adequate
charting
and
trading
software,
all
bundled
together.
 
 Other
aspects
to
watch
for
when
selecting
a
broker
are
the
leverage
levels
and
 account
types
(standard
and
mini
accounts)
offered.

Most
brokers
offer
at
least
 100:1
leverage
which
is
more
than
adequate
for
most
traders.

Some
brokers
also
 offer
greater
leverage,
up
to
400:1.

This
type
of
leverage
is
completely
 unnecessary
as
the
risk
reward
ratio
can
quickly
go
against
you
if
you
use
 excessive
leverage.
(I’ll
cover
this
in
more
detail
later
in
the
report
in
the
question
 about
risk
management.)
 
 Copyright
©
Profits
Run,
Inc.
 Page
17
of
17
 

  18. 18. Power
Forex
Profit
Principles
 
 
 Depending
on
your
account
size,
you
will
want
to
be
sure
the
broker
you
choose
 offers
the
appropriate
account
types.

Standard
and
mini
accounts
are
typical.

 The
standard
account
typically
requires
minimum
initial
capital
of
$2,000
or
 more,
while
the
mini
account
typically
requires
$300
or
more.

Leverage
of
100:1
 should
be
available
for
either
a
standard
or
a
mini
account.
 
 What
are
the
best
Forex
pairs
to
trade?
 
 I
believe
that
not
all
Forex
pairs
are
suitable
for
trading.

What
we
should
be
 looking
for
as
traders
are
liquid
markets
that
have
sufficient
price
movement
to
 make
a
trade
worthwhile.

With
that
in
mind,
the
following
pairs
are
the
most
 widely
traded,
most
liquid
pairs
and
the
only
ones
that
I
would
consider
trading:
 
  EUR/USD
–
Euro
/
US
dollar
 
  GBP/USD
‐

British
Pound
/
US
dollar
(often
referred
to
as
the
“Cable”)
 
  USD/JPY
‐

US
dollar
/
Japanese
Yen
 
  USD/CHF
–
US
dollar
/
Swiss
Franc
 
  USD/CAD
–
US
dollar
/
Canadian
dollar
 
  AUD/USD
–
Australian
dollar
/
US
dollar
 
 And
to
further
simplify
Forex
trading,
you
could
easily
limit
your
trading
to
the
 two
most
liquid
and
widely
traded
pairs,
the
EUR/USD
and
the
GBP/USD.

This
 really
starts
to
reduce
demands
on
your
time
for
trading
activities
without
giving
 up
good
profit
potential.
 What
is
the
best
trading
platform
and
 charting
software
for
both
beginners
and
 more
experienced
traders
alike
and
where
 should
I
obtain
the
most
reliable
data?
 
 
 Copyright
©
Profits
Run,
Inc.
 Page
18
of
18
 

  19. 19. Power
Forex
Profit
Principles
 
 The
answer
to
this
question
starts
with
your
broker.

First,
I
highly
recommend
 that
you
only
open
an
account
with
a
registered
broker.

Having
said
that,
most
 Forex
brokers
provide,
“free
of
charge”,
an
online
trading
platform
that
is
integral
 with
decent
charting
software.

This
way
you
have
your
charting
software,
your
 data
feed
and
your
trading
platform
(the
ability
to
place
trades
online)
all
in
one
 location.

I
believe
you
can
consider
the
data
reliable
and
the
order
execution
 proper
as
long
as
you
are
dealing
with
a
registered
broker.
 
 However,
some
trading
platforms
and
charting
software
are
more
intuitive
and
 easier
to
use
than
others,
so
in
selecting
a
broker,
you
want
to
open
a
demo
 account
first
and
get
the
feel
for
that
broker’s
platform
to
see
if
it
is
comfortable
 for
you.

You
will
be
able
to
determine
 this
with
a
little
paper
trading
over
a
 few
days
and
weeks.


 
 Also,
you
want
to
be
sure
that
your
 brokers
charting
software
is
able
to
plot
 the
indicators
that
your
trading
 methods
call
for.
Most
will
be
able
to
 do
this,
but
not
all.
 
 In
addition,
some
traders
prefer
to
also
 use
additional
upscale
charting
 software
independent
from
the
dealer,
 such
as
offered
by
MetaTrader.

 MetaTrader
and
others
offer
additional
 charting
capability
as
well
as
trade
alert
 capability
that
some
traders
find
useful.

 
 
 Is
it
better
to
use
fundamental
or
 technical
analysis
with
Forex
trading?
 
 The
answer
to
this
question
depends
on
your
trading
method.

The
markets
are
 indeed
moved
by
fundamentals
(balance
of
trade
data,
money
supply,
interest
 rates,
economic
and
financial
reports,
etc.)
but
only
through
the
prism
of
human
 
 Copyright
©
Profits
Run,
Inc.
 Page
19
of
19
 

  20. 20. Power
Forex
Profit
Principles
 
 psychology.

It
is
not
the
fundamental
data
or
information
that
is
so
important
as
 much
as
it
is
the
markets’
reactions
to
that
information.


 
 Many
advocate
trading
on
the
fundamentals;
however,
a
case
can
be
made
that
 trading
on
the
fundamentals
is
extremely
difficult
due
to
the
fact
that
the
 markets
always
immediately
and
continuously
are
digesting
any
and
all
 fundamental
data
and
to
do
this
successfully,
you
need
to
be
available
on
a
real
 time
basis
at
whatever
hour
of
the
day
or
night
that
the
news
is
likely
to
impact
 the
market.

Then,
you
need
to
act
on
that
news
before
or
at
least
in
the
same
 instant
that
the
rest
of
the
world
does
or
else
the
opportunity
could
be
lost.
 
 While
some
do
trade
the
fundamentals
successfully,
I
believe
using
good
trading
 methods
based
on
technical
analysis
is
an
easier,
less
demanding
way
to
trade
 with
far
greater
odds
of
success.


This
is
because
I
believe,
as
do
technical
traders
 in
general,
that
any
and
all
fundamentals
are
already
always
reflected
in
the
price
 of
the
market
at
any
instant
and
so
I
would
rather
apply
technical
analysis
to
the
 markets
and
trade
them
on
my
terms,
when
I
want
to
trade
them
and
how
I
want
 to
trade
them,
with
as
little
time
spent
in
the
process
as
possible.
 
 I
am
not
able
to
dedicate
the
time
it
takes
to
day
 trade
the
markets.

Is
it
possible
to
trade
the
Forex
 markets
on
an
end‐of‐day
basis
so
I
can
take
 advantage
of
the
market
trends
while
working
my
 regular
job
or
when
sleeping?
 
 This
is
a
very
common
question;
because
some
believe
the
only
way
to
trade
the
 Forex
markets
is
by
day
trading
the
markets,
which
generally
does
require
a
 significant
time
commitment.

While
day
trading
is
very
widespread
in
the
Forex
 markets,
I
believe
that
a
trader
can
do
as
well
or
better
with
far
less
time
 commitment
by
trading
the
markets
on
an
end‐of‐day
basis.

Of
course,
in
order
 to
do
so,
you
must
have
good
trading
methods
specifically
designed
for
end‐of‐ day
trading.
 
 It
has
often
been
said
that
if
you
cannot
make
money
trading
on
an
end‐of‐day
 basis,
you
will
never
make
money
by
day
trading.

And
I
believe
that
applies
to
 the
Forex
markets
as
well.

This
is
because
the
time
pressure
to
make
instant
 decisions
on
order
entry,
immediate
placement
of
stop
orders
and
setting
profit
 
 Copyright
©
Profits
Run,
Inc.
 Page
20
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20
 

  21. 21. Power
Forex
Profit
Principles
 
 targets
is
very
stressful
and
demanding
of
your
time.

While
some
traders
prefer
 day
trading
and
are
able
to
handle
its
rigors
and
have
the
time
to
allocate
to
it,
 others
prefer
end‐of‐day
trading
that
can
be
done
in
as
little
as
20
minutes
a
day
 while
the
markets
are
quiet.
 
 Let’s
look
at
a
couple
of
examples
to
make
this
point.
 
 
 Figure
2
‐
EUR/USD
Daily
Chart
 
 Figure
2
is
a
daily
chart
of
the
EUR/USD
pair
showing
a
great
up
move
in
the
 market
from
mid‐October
to
early
December
2006.

This
was
about
a
900
pip
 move
that
occurred
in
a
little
over
30
trading
days
and
a
good
end‐of‐day
trading
 method
should
have
been
able
to
get
on
board
and
capture
around
700
pips
of
 this
move.

With
a
good
end‐of‐day
trading
method,
it
could
take
less
than
20
 minutes
a
day
to
enter,
place
stops,
manage
and
exit
the
trade
with
very
nice
 profits.
 
 
 Copyright
©
Profits
Run,
Inc.
 Page
21
of
21
 

  22. 22. Power
Forex
Profit
Principles
 
 
 Figure
3
‐
EUR/USD
5
Minute
Chart
 
 Figure
3
is
5
minute
chart
of
the
EUR/USD
pair
showing
two
great
down
moves
 from
7:00AM
to
11:00AM
September
3,
2007.

The
first
down
move
was
for
 about
21
pips
and
lasted
for
8
bars
and
the
second
down
move
was
for
about
20
 pips
and
last
for
5
bars.

A
good
day
trading
method
should
have
been
able
to
get
 on
board
and
capture
12
pips
of
the
first
move
and
11
pips
of
the
second
move.

 With
a
good
day
trading
method,
it
would
have
taken
potentially
several
hours
to
 capture
these
two
moves.
 
 Now
you’re
not
always
going
to
get
a
900
pip
move
on
the
daily
charts
and
you’re
 not
always
going
to
get
two
20
pip
moves
in
a
matter
of
4
hours
on
the
5
minute
 charts,
but
I
think
this
example
makes
the
point
that
the
potential
gain
for
the
 time
invested
is
far
greater
with
end‐of‐day
trading.
 
 
 
 Copyright
©
Profits
Run,
Inc.
 Page
22
of
22
 

  23. 23. Power
Forex
Profit
Principles
 
 How
is
it
possible
to
trade
the
Forex
markets
on
an
 end‐of‐day
basis
using
daily
bar
charts
when
the
 markets
are
always
open?
 
 Most
good
charting
software
and
trading
platforms
provided
by
a
good
broker
or
 bank
include
the
ability
to
plot
daily
bar
charts
where
the
daily
bar
“closes”
at
 5:00PM
EST.

This
time
is
selected
because
it
is
coincident
with
the
New
York
 session
“close”
and
the
Sydney
“open”
which
is
a
relatively
quiet
time
in
most
 markets
until
the
Tokyo
session
begins
at
7:00PM
EST
followed
by
the
London
 (and
Europe)
session
beginning
at
3:00AM
EST.

We
can
then
use
these
daily
bar
 charts
to
develop
trading
strategies
that
require
only
the
use
of
these
charts
 without
requiring
intraday
charts.
 
 
 Figure
4
–
EUR/USD
Daily
Chart
 
 Figure
4
shows
a
plot
of
a
daily
chart
for
the
EUR/USD
pair
using
VT
Trader
which
 is
a
representative
charting
software/trading
platform.

On
this
chart,
each
bar
 represents
one
day’s
trading
activity
from
the
high
price
of
the
day
to
the
low
 
 Copyright
©
Profits
Run,
Inc.
 Page
23
of
23
 

  24. 24. Power
Forex
Profit
Principles
 
 price
of
the
day.

The
horizontal
mark
to
 the
left
of
a
daily
bar
is
the
open
for
the
 day
(this
is
based
on
the
first
trade
after
 5:00PM
EST).

The
horizontal
mark
to
the
 right
of
a
daily
bar
is
the
close
for
the
 day
(this
is
based
on
the
last
trade
as
of
 5:00PM
EST).

So,
as
you
can
see,
daily
 bar
charts
are
readily
available
in
the
 24/7
Forex
markets.
 
 Also
plotted
on
this
chart
are
a
few
 technical
indicators.

Two
simple
moving
 averages
are
plotted
in
blue
and
red
and
 the
ADX
indicator
is
plotted
at
the
 bottom
in
brown.

A
simple
moving
 average
is
calculated
by
adding
up
the
 prices
for
a
number
of
bars
and
dividing
 that
sum
by
the
same
number
of
bars.

 Moving
averages
help
to
determine
the
 prevailing
trends
of
the
market.

The
 ADX
indicator
is
a
complex
formula
that
helps
to
determine
the
degree
of
 trendiness
of
a
market.

These
are
only
a
few
of
the
indicators
that
are
available
 through
VT
Trader
in
applying
technical
analysis.
 
 If
you
look
closely
at
the
chart
from
left
to
right,
you
can
see
that
this
market
was
 in
an
uptrend
and
then
later
formed
a
double
top
before
falling
into
a
down
 trend,
only
to
reverse
again
into
an
uptrend
at
the
end
of
the
chart.

This
type
of
 behavior
is
typical
of
what
you
can
expect
to
see
on
a
daily
chart
and
these
 shorter
term
trends
can
definitely
be
traded
using
good
end‐of‐day
trading
 methods.
 
 A
good
end‐of‐day
trading
method
should
be
based
on
an
evaluation
of
the
 market
after
the
daily
bar
“closes”
at
5:00PM
EST
for
trade
opportunities
to
be
 considered
after
the
open
of
the
next
bar
which
occurs
as
of
the
first
trade
after
 5:00PM
EST.

In
actual
practice,
because
the
markets
are
relatively
quiet
during
 this
time,
trades
for
the
new
daily
bar
can
be
placed
anywhere
from
5:00PM
to
 7:00PM
EST
when
the
Tokyo
session
begins.

Trading
in
this
manner
then
requires
 only
a
few
minutes
each
day
at
the
same
time
without
worrying
about
an
open
 position
if
it
is
properly
protected
with
stops
and
profit
targets.
 
 
 Copyright
©
Profits
Run,
Inc.
 Page
24
of
24
 

  25. 25. Power
Forex
Profit
Principles
 
 
 Figure
5
‐
GBP/USD
Daily
Chart
 
 Figure
5,
shows
a
plot
of
a
daily
chart
for
the
GBP/USD
pair
using
VT
Trader
with
 the
same
technical
indicators
as
the
previous
chart.


With
this
software,
it
is
a
 simple
matter
to
toggle
from
one
pair
to
the
other
for
quick
visual
analysis.
 
 If
you
look
closely
at
the
chart
from
left
to
right
again,
you
can
see
that
this
 market
was
chopping
sideways
until
a
major
move
up
occurred
over
a
period
of
 more
than
20
days
and
then
the
market
reversed
abruptly
and
retraced
that
 entire
gain
even
faster.

After
which
a
new
rally
started.

Again,
this
type
of
 behavior
is
typical
of
what
you
can
expect
to
see
on
a
daily
chart
and
these
 shorter
term
trends
can
definitely
be
traded
using
good
end‐of‐day
trading
 methods.

You
can
also
see
that
if
you
do
not
pay
close
attention
to
risk
 management
that
these
abrupt
swings
could
do
great
damage
to
your
account.

 Like
any
endeavor
that
offers
great
reward,
you
must
get
the
proper
education
 and
training
in
order
to
stay
out
of
trouble
and
realize
that
potential.
 
 
 Copyright
©
Profits
Run,
Inc.
 Page
25
of
25
 

  26. 26. Power
Forex
Profit
Principles
 
 What
are
the
attributes
of
a
good
 Forex
trading
method?
 
 A
good
trading
method
should
be
as
simple
 as
possible
to
provide
a
powerful
edge
to
 the
disciplined
trader
that
is
based
upon
 specific
setup
conditions,
entry
rules,
initial
 stops,
and
exit
strategy.

In
addition
the
 management
of
position
size
and
number
 of
positions
must
be
according
to
strict
 money
management
rules.


A
good
trading
 method
also
must
be
relatively
easy
to
 follow.
 
 Setup
conditions
–
These
are
the
specific
 requirements
that
must
be
met
to
consider
 a
pair
for
a
trade.

These
requirements
are
 expressed
in
terms
of
technical
analysis
indicators,
patterns
and
price
action.

The
 aim
here
is
to
only
consider
a
trade
when
the
market
meets
these
pre‐set
 conditions
and
to
stand
aside
otherwise.
This
is
one
of
the
ways
required
to
put
 the
odds
in
your
favor.
 
 Entry
Rules
–
Once
the
setup
conditions
are
in
place,
entry
rules
define
the
 trigger
necessary
to
actually
enter
into
the
trade.

This
usually
means
that
price
 must
behave
in
a
certain
way
in
order
to
“trigger”
into
a
trade
using
either
a
 market,
stop,
or
limit
order.
 
 Initial
Stop
Rules
–
These
are
the
rules
that
govern
how
a
new
position
should
be
 protected
from
an
adverse
move
in
the
market.

Since
there
is
always
risk
when
 trading
the
Forex
markets,
it
is
very
important
to
know
the
appropriate
place
to
 place
the
initial
stop
order.

Placed
too
close
to
the
market
risks
being
stopped
 out
prematurely.

Placed
too
far
from
the
market
takes
on
too
much
risk.

This
is
 one
of
the
most
critical
aspects
of
trade
management.

Effective
Initial
Stops
 should
be
place
where
you
don’t
expect
the
market
to
go
and
if
it
does,
the
 premise
of
the
trade
is
over
and
you
should
exit
the
trade
with
a
small
loss.
 
 Exit
Strategy
Rules
–
These
rules
govern
how
to
manage
a
trade
to
exit
the
trade
 profitably,
if
the
Initial
Stop
Rules
have
not
been
applied
to
the
trade.
These
rules
 
 Copyright
©
Profits
Run,
Inc.
 Page
26
of
26
 

  27. 27. Power
Forex
Profit
Principles
 
 should
strike
a
balance
between
protecting
open
profits
as
much
as
possible
and
 exiting
a
market
too
soon
and
missing
favorable
market
moves.
 
 Why
don’t
all
setup
conditions
 trigger
into
positions?
 
 There
is
a
common
misunderstanding
among
many
beginners
that
if
a
trading
 method
is
good
then
any
time
the
setup
conditions
as
defined
by
that
method
 occur,
then
that
means
it’s
OK
to
go
ahead
and
enter
the
market.


As
seasoned
 traders
know,
this
is
not
always
the
case.


 
 In
order
to
have
an
edge
when
trading
the
markets,
a
successful
trader
waits
for
 conditions
to
develop
that
may
signal
a
good
trade
opportunity.

But
when
these
 conditions
develop,
which
are
usually
called
“setup
conditions”,
that
oftentimes
 only
means
that
the
trader
should
be
on
alert
to
a
trading
opportunity.


 
 An
actual
trade
does
not
occur
unless
after
the
setup
conditions
are
in
place
a
 trigger
also
occurs.

The
trigger
is
necessary
to
confirm
that
the
market
will
move
 in
the
intended
direction
before
entering
the
market.

This
is
a
very
important
 concept,
as
it
is
common
to
have
several
setup
condition
alerts
that
do
not
 trigger.

 
 So
the
moral
of
this
story
is
that
it
is
perfectly
OK
(and
expected)
for
setup
 conditions
to
NOT
trigger.
That
means
conditions
are
no
longer
good
for
the
 trade,
and
you
are
being
protected
because
you
didn’t
enter
that
trade.
 Amateurs
and
beginners
will
sometimes
assume
a
trading
method
is
‘not
 working’
because
setup
conditions
have
not
been
triggered
into
a
position.
 Nothing
could
be
further
from
the
truth.
 
 What
are
the
best
technical
indicators
to
use?
 
 At
last
count
there
are
over
100
technical
indicators
available
in
most
charting
 software
packages.

There
is
no
magic
in
the
indicators
themselves
as
they
all
 strive
to
tell
you
something
about
how
the
market
is
behaving
at
a
point
in
time.

 And
it
is
not
that
some
are
better
than
others,
rather
the
key
to
using
indicators
 successfully
is
to
select
only
a
few
that
complement
each
other
and
to
use
them
 in
an
uncommon
manner
together
with
powerful
trading
tactics.
 
 
 Copyright
©
Profits
Run,
Inc.
 Page
27
of
27
 

  28. 28. Power
Forex
Profit
Principles
 
 The
tendency
of
amateur
traders
is
to
over‐complicate
things.
They
want
to
use
 (or
misuse,
really)
too
many
indicators
and
patterns,
and
think
that
to
be
 successful,
there
must
be
a
bunch
of
complexity
that
is
required
in
a
good
trading
 method.

Nothing
could
be
further
from
the
truth.

Simple
is
better,
by
far,
for
 several
reasons.
 
 1. Using
too
many
or
the
wrong
indicators
is
counterproductive,
as
the
 information
that
those
indicators
provide
is
counterintuitive
and
just
plain
 misleading.
 
 2. Using
a
few
simple
indicators
in
a
uniquely
powerful
way
can
provide
the
 right
information
necessary
to
make
good
trading
decisions.
 
 3. With
the
right
indicators
and
patterns,
you
will
be
far
more
likely
to
trade
 with
discipline
because
you
will
be
able
to
understand
an
objective
set
of
 rules
that
the
right
indicators
and
patterns
can
provide.
 
 Let
me
comment
on
a
phenomenon
that
I
see
time
and
time
again.
Hopefully,
 you
will
not
fall
victim
to
this.
Here
it
is:
You
research
a
new
trading
method
and
 ultimately
buy
it.
Then
you
quickly
flip
ahead
to
what
you
consider
to
be
“the
 meat”
of
the
method,
and
totally
ignore
the
more‐important
aspects
of
risk
 management,
discipline,
and
psychology.
Then
you
examine
the
method,
looking
 for
a
big,
mysterious,
jaw‐dropping
“secret”
that
will
let
you
predict
each
and
 every
market
move
like
a
modern‐day
Nostradamus.
You
look
for
a
complicated
 formula,
or
you
look
for
some
cryptic
combination
of
indicators
that
must
be
 good,
because
they’re
just
so
complicated
looking!
Wow!
 
 Then
what
happens
is
you’ll
typically
burn
yourself
out
trying
to
apply
it.
You’ll
 become
frustrated
when
the
method
doesn’t
work.
Or,
you’ll
blame
yourself
for
 not
being
smart
enough
to
understand
or
apply
the
method.
Then
you’ll
put
the
 method
on
the
shelf,
only
to
occasionally
glance
at
it
in
wonder
from
time
to
 time.
Wondering
why
you
couldn’t
get
what
you
still
assume
to
be
a
great
 method
to
work.

 
 
 Copyright
©
Profits
Run,
Inc.
 Page
28
of
28
 

  29. 29. Power
Forex
Profit
Principles
 
 But
here’s
what
can
also
happen.
In
the
example
above,
after
you
discover
that
 “the
meat”
of
the
method
is
very
simple,
easy
to
understand,
and
only
uses
a
few
 common
indicators,
you
become
perplexed.
You
may
even
become
disappointed.
 After
all,
in
your
mind,
you
expected
some
labyrinthine
skeleton
key
that
would
 unlock
the
mysteries
of
the
forex
markets
once
and
for
all.
You
may
even
be
 tempted
to
“throw
in
the
towel”,
instantly
give
up
the
method
and
send
it
back
–
 just
because
it’s
not
“complicated”
enough.
 
 What?!
That’s
just
crazy.
But
I
have
to
 admit,
I
went
through
a
period
in
my
 younger
(and
poorer)
days
when
I
 thought
a
bit
like
that.
Time
and
 experience
have
finally
taught
me,
and
 much
to
my
relief,
that
complicated
is
 usually
not
good,
and
simple
is
almost
 always
better.
If
those
traders
that
are
 still
cursed
with
that
“complexity
 mindset”
would
just
try
a
“simple”
 trading
method,
they
would
be
doing
 themselves
a
HUGE
favor
(not
to
 mention,
potentially,
their
trading
 accounts).
This
goes
for
both
true
 beginners
as
well
as
traders
who
think
of
 themselves
as
“experts”.
 
 Again,
the
key
here
is
simple,
but
 powerful.

Use
just
a
few
indicators,
 applied
in
a
manner
that
is
not
the
usual
textbook
approach.

That
is
what
can
 give
you
an
edge
trading
the
markets.
 
 Incidentally,
the
unfortunate
truth
of
the
matter
is
that
the
old
80/20
rule
will
 come
into
play
here
(except
in
trading,
it’s
more
like
90/10,
or
95/5),
and
80
to
 95%
of
the
traders
that
just
read
this
section
and
nodded
their
heads
in
 agreement
will
completely
ignore
this
advice
and
fall
right
back
into
the
trap
 described
above.
It’s
a
near
certainty,
and
that’s
too
bad.
So
I
really
urge
you
to
 go
back
and
read
this
section
again,
and
hopefully
you
can
escape
the
self‐ sabotaging
patterns
that
are
separating
most
traders
from
failure
and
success
in
 the
markets.
 
 
 Copyright
©
Profits
Run,
Inc.
 Page
29
of
29
 

  30. 30. Power
Forex
Profit
Principles
 
 Let’s
take
a
look
now
at
some
examples
of
a
few
indicators
that
can
be
used
to
 form
the
basis
of
very
powerful
trading
methods.
 
 
 Figure
6
‐
USD/CHF
Daily
Chart
 
 Figure
6
shows
some
typical
and
not
so
typical
indicators
applied
to
the
USD/CHF
 pair
using
VT
Trader.

First,
notice
that
two
simple
moving
averages
have
been
 plotted
on
the
chart
(in
blue
and
red).

These
are
commonly
used
indicators.

I
 have
also
plotted
moving
average
envelopes
which
are
a
fixed
percentage
above
 and
below
the
blue
moving
average.


These
are
not
so
commonly
used
and
can
 be
very
helpful
supporting
various
quick
hit,
in
and
out
trading
strategies
that
 only
need
attention
once
a
day
at
the
5:00PM
EST
daily
“close”.
 
 
 Copyright
©
Profits
Run,
Inc.
 Page
30
of
30
 

  31. 31. Power
Forex
Profit
Principles
 
 
 Figure
7
‐
USD/JPY
Daily
Chart
 
 Figure
7
shows
some
additional
indicators
applied
to
the
USD/JPY
pair
using
VT
 Trader.

On
this
chart,
I
am
applying
a
longer
term
moving
average
in
purple
 together
with
two
very
short
term
moving
averages
in
brown.

The
long
term
 moving
average
is
based
on
the
closing
price
while
the
short
term
moving
 averages
are
based
on
the
high
and
close
respectively.

Also
included
is
the
ADX
 at
the
bottom
of
the
chart.

This
is
what
I
mean
when
I
say
the
key
to
developing
 an
edge
when
trading
the
markets
is
to
combine
a
few
indicators
in
an
 uncommon
way.

Each
of
these
configurations
is
designed
to
exploit
a
certain
 behavior
in
the
market.

But
the
indicators
alone
are
insufficient;
only
when
 combined
with
powerful
trading
tactics
does
the
power
of
a
good
trading
method
 emerge.
 
 
 Copyright
©
Profits
Run,
Inc.
 Page
31
of
31
 

  32. 32. Power
Forex
Profit
Principles
 
 
 Figure
8
‐
USD/CAD
Daily
Chart
 
 Figure
8
shows
a
configuration
we
reviewed
in
an
earlier
question
applied
this
 time
to
the
USD/CAD
pair
using
VT
Trader.

On
this
chart
I
am
applying
two
 simple
moving
averages
plotted
in
blue
and
red
and
the
ADX
indicator
plotted
at
 the
bottom
in
brown.
 
 This
set
of
indicators
when
combined
with
different
trading
tactics
is
designed
to
 capture
longer
term
moves
in
the
Forex
markets
such
as
occurred
on
this
 USD/CAD
pair
beginning
at
the
left
hand
side
of
the
chart
and
continuing
for
over
 5
months.

These
mega
trends
can
only
be
captured
by
trading
the
daily
bar
 charts.
 
 
 Copyright
©
Profits
Run,
Inc.
 Page
32
of
32
 

  33. 33. Power
Forex
Profit
Principles
 
 
 Figure
9
‐
AUD/USD
Daily
Chart
 
 Figure
9
shows
another
combination
of
indicators
applied
to
the
AUD/USD
pair
 using
VT
Trader.

On
this
chart,
I
am
applying
an
intermediate
term
moving
 average
in
red
together
with
slow
stochastics
and
ADX
in
the
two
panels
below
 the
price
chart.

The
intermediate
term
moving
average
is
based
on
the
closing
 price.

This
set
of
indicators
when
combined
with
different
trading
tactics
is
 designed
to
capture
sudden
trend
reversal
waves
such
as
occurred
on
this
 AUD/USD
pair
just
to
the
right
of
the
center
of
the
chart
and
continuing
for
 almost
3
months.
 What
simple
strategy
can
I
use
to
 find
good
entry
points?
 
 The
general
approach
that
I
use
is
to
develop
specific
setup
conditions
that,
when
 present
in
the
market,
indicate
that
I
should
consider
entering
into
a
new
 position.

So
the
first
thing
is
to
identify
the
conditions
that
occur
relatively
 
 Copyright
©
Profits
Run,
Inc.
 Page
33
of
33
 

  34. 34. Power
Forex
Profit
Principles
 
 infrequently
in
the
market,
but
that
when
they
do,
a
high
probability
opportunity
 may
await.
 
 This
is
a
very
important
concept,
because
one
of
the
keys
to
successful
Forex
 trading
is
to
wait
patiently
for
the
prime
opportunity
to
enter
the
market.

 Amateurs
too
often
become
impatient
and
want
to
trade
just
for
the
sake
of
 trading
and
consequently
enter
the
market
under
other
than
ideal
conditions.
 This
greatly
reduces
the
chance
of
a
successful
trade.
 
 
 Figure
10
‐
GBP/USD
Daily
Chart
Entry
Point
Examples
 
 Amateur
traders
that
do
this
are,
in
effect,
trying
to
force
the
market
to
come
to
 them
on
their
terms.
Guess
what?
The
market
doesn’t
care!
It’s
going
to
do
what
 it’s
going
to
do
and
there
is
nothing
you
can
do
about
it
except
for
one
thing.

 And
that
is
to
wait
for
the
market
to
develop
according
to
predefined
setup
 conditions
and
only
when
that
happens
is
it
appropriate
to
consider
a
trade.

In
 that
way,
you’re
not
forcing,
but
rather
waiting
for
the
market
to
come
to
you,
 which
makes
a
world
of
difference.
 
 Another
key
concept
to
find
entry
points
that
is
common
to
most
types
of
trend
 trading
is
to
attempt
to
buy
into
support
levels
and
sell
into
resistance
levels.

The
 
 Copyright
©
Profits
Run,
Inc.
 Page
34
of
34
 

  35. 35. Power
Forex
Profit
Principles
 
 success
or
failure
of
this
attempt
lies
in
the
robustness
of
the
setup
conditions
 defined
in
the
trading
method.
 
 Once
the
setup
conditions
are
in
place,
specific
entry
rules
need
to
be
followed
to
 “trigger”
the
actual
trade.
For
example,
one
of
the
pairs
that
you
are
following
 may
meet
the
setup
conditions
for
a
long
trade.
Now,
depending
on
the
trading
 method,
the
entry
order
could
be
a
Stop
order
that
says,
“Only
buy
if
the
market
 trades
above
a
certain
level”
which
confirms
the
resumption
of
the
uptrend.
Or,
it
 could
be
a
Limit
order
which
says,
“Buy
only
if
the
market
trades
down
to
a
 support
level”,
defined
by
a
moving
average
or
Fibonacci
level
or
old
highs,
etc.
 
 There
is
no
one
right
way
to
do
this.
However,
the
precise
entry
trigger
point
has
 to
be
integral
to
the
other
features
of
the
overall
trading
method,
including
 planned
risk
in
the
trade.

The
entry
point
rules
of
the
method,
by
necessity,
will
 determine
the
stop
loss
point
and
consequently
planned
risk
in
the
trade.

The
 two
go
hand
in
hand.
 How
can
I
determine
the
initial
stop
loss,
 trailing
stops,
and
exit
points?
 
 Besides
money/risk
management,
I
believe
this
is
one
of
the
most
important
 questions
regarding
a
good
trading
method.

It
should
go
without
saying
that
as
 soon
as
you
enter
the
market
with
a
new
position,
an
initial
stop
order
should
be
 entered
to
protect
the
position
against
an
adverse
move
in
the
market
or
an
exit
 strategy
should
be
employed
to
cover
the
trade
if
the
market
closes
adversely.

If
 such
a
move
occurs,
as
is
often
the
case,
you
want
your
position
liquidated
and
 out
of
the
market
with
a
minimal
loss.


 
 The
consequences
of
failing
to
do
this
are
that
you
will
not
be
successful
at
 trading
‐
period.

In
fact,
every
trade
you
put
on,
you
should
plan
to
lose,
so
that
 you
are
sure
to
place
your
stop
loss
order
or
cover
the
trade
on
an
adverse
 close.

Otherwise,
what
would
have
been
a
small
loss
turns
into
a
big
loss,
 throwing
the
entire
risk/reward
ratio
out
of
kilter
against
you.
 
 That
being
said,
where
should
the
stop
be
placed?

The
short
answer
is,
“Where
 you
don’t
expect
the
market
to
go”;
or,
more
specifically,
where
the
assumption
 in
putting
on
the
trade
is
no
longer
valid.

For
example,
if
a
long
position
was
 entered
into
after
an
uptrend
or
breakout
market
traded
back
down
to
support,
 an
initial
stop
could
be
entered
below
the
recent
low
because
if
the
market
does
 
 Copyright
©
Profits
Run,
Inc.
 Page
35
of
35
 

  36. 36. Power
Forex
Profit
Principles
 
 go
there,
support
(as
defined
by
that
low)
would
have
failed,
and
there
is
no
 longer
any
reason
to
be
long
the
market
–
so
get
out!

Don’t
wait
around
for
it
to
 come
back
in
your
favor
because
the
odds
are
against
it.


 
 If
the
market
goes
in
your
favor
once
the
initial
stop
is
in
place,
then
you
need
a
 set
of
rules
that
will
allow
you
to
exit
the
market
profitably.

This
poses
a
real
 dilemma.

If
you
exit
too
soon,
you
may
secure
a
small
profit,
but
miss
out
on
all
 those
big
moves
that
occur
(and
the
big
profits
that
go
with
them).

On
the
other
 hand,
if
you
wait
too
long
to
exit,
the
market
may
reverse
and
take
away
all
of
 your
open
profits
and
even
put
you
into
a
loss
position.
 
 
 Figure
11
‐
GBP/USD
Daily
Chart
Initial
Stop,
Trailing
Stops,
&
Profit
Target
Examples
 
 So
what
do
you
do?

Well,
the
first
thing
is
to
realize
that
there
is
no
method
that
 can
forecast
whether
or
not
a
particular
move
will:
 
  Go
against
you
immediately
  Go
up
only
a
little
before
going
back
down
  Go
up
a
lot
in
your
favor
 
 
 Copyright
©
Profits
Run,
Inc.
 Page
36
of
36
 

  37. 37. Power
Forex
Profit
Principles
 
 For
example,
after
you
enter
a
long
trade
in
an
uptrend,
there’s
absolutely
no
 way
to
predict
what
will
happen
next
(contrary
to
what
the
so‐called
“gurus”
tell
 you).
Because
of
this,
you
absolutely
need
an
exit
strategy,
because
the
risk
of
 loss
is
significant
no
matter
how
carefully
you
plan
your
entries
and
exits.
 
 
 The
Optimal
Profit
Exit
Strategy
 
 The
following
is
the
very
best
exit
strategy
that
I
believe
possible
when
trading
 the
Forex
markets
on
an
end‐of‐day
basis.

I
call
it
the
Optimal
Profit
Exit
 Strategy.


It’s
a
strategy
that
scales
out
of
a
trade
in
two
steps.

This
strategy
is
 first
and
foremost
about
taking
an
initial
profit
as
soon
as
appropriate,
thereby
 “taking
some
money
off
the
table”
and
reducing
the
risk
in
the
trade
at
the
same
 time.


 
 1. Step
one
is
to
cover
1/2
of
your
position
at
a
pre‐determined
profit
target.

 The
profit
target
is
modest,
but
enough
to
make
the
trade
worthwhile
and
 the
specific
level
is
also
dependent
on
the
overall
method
being
used.

 Once
that
initial
profit
target
is
hit,
you
should
move
the
initial
stop
up
for
 the
remaining
1/2
of
the
position
to
the
lowest
low
of
the
past
3
days
for
 an
uptrend
trade
or
the
highest
high
of
the
past
3
days
for
a
downtrend
 trade.

You’re
now
out
of
1/2
of
the
trade
with
a
very
nice
profit
and
at
the
 same
time
you
are
prepared
to
ride
the
market
as
far
as
it
wants
to
go
in
 your
favor
for
the
remaining
1/2
of
your
position.
 
 2. The
remaining
1/2
position
should
remain
protected
by
a
trailing
stop
 always
based
on
the
lowest
low
of
the
past
3
days
(for
an
uptrend
trade).

 And
so
as
the
market
continues
to
move
up,
you
should
continuously
 move
the
stop
up
with
it.

This
locks
in
a
significant
portion
of
the
 remaining
open
profit
but
also
gives
the
market
enough
room
to
trade
 down
a
bit
without
shaking
you
out
of
the
trade
if
it
moves
higher.
 
 With
this
strategy
you
should
be
prepared
to
take
advantage
of
the
market
after
 entering
a
trade
no
matter
what
it
does.
And
that’s
a
big
deal.
 
 Copyright
©
Profits
Run,
Inc.
 Page
37
of
37
 

  38. 38. Power
Forex
Profit
Principles
 
 How
can
I
find
a
Forex
method
that
works
almost
 all
of
the
time
with
minimal
or
no
losses?
 
 I
call
this
the
“Holy
Grail
Syndrome”
and,
of
course,
the
Holy
Grail
of
trading
 simply
does
not
exist.

I’ve
talked
about
this
concept
many
times
since
I
started
 training
individuals
to
trade
the
markets
back
in
2001,
but
it
bears
repeating
 here.

 
 For
years,
I
refused
to
believe
in
this
 concept
and
was
forever
looking
for
or
 trying
to
develop
a
method
that
would
 always
win
with
no
losses,
or
certainly
 never
experience
two
losing
trades
in
a
 row.

I
wasted
years
of
my
life
with
this
 false
impression
about
what
it
would
 take
to
trade
successfully.

Don’t
fall
 into
the
same
trap.
While
the
holy
grail
 of
trading
does
not
exist,
nor
will
it
ever;
 thankfully,
it
is
not
necessary
in
order
to
 be
successful.
 
 What
is
necessary
as
I
have
emphasized
 repeatedly
in
this
report
is
a
trading
 method
that
gives
you
an
edge
in
the
market,
the
discipline
to
trade
it
and
of
 course
sound
money
management.

That
sounds
simple,
and
in
some
respects
it
 is,
until
you
factor
us
humans
into
the
equation.

Consider
these
questions.


 
 1. Do
you
have
an
edge
in
trading
the
markets?

What
is
it?
If
you
don’t
 know,
then
you
do
not
have
an
edge.
 
 2. How
about
discipline
‐
can
you
really
follow
your
trading
method
without
 fail,
especially
after
two
successive
losing
trades?
What
about
three?

Or
 will
you
drop
the
method
and
search
for
something
else?
When
that
 happens
the
“Holy
Grail
Syndrome”
is
at
work.
 
 3. Then
there
is
money
management.

Are
you
allocating
the
appropriate
 level
of
funds
and
controlling
the
degree
of
risk
on
each
trade?



 
 
 Copyright
©
Profits
Run,
Inc.
 Page
38
of
38
 


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