More Related Content Similar to Power Forex Profit Principle
Similar to Power Forex Profit Principle (20) Power Forex Profit Principle1. 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
©
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Page
1
of
1
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
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Page
2
of
2
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
©
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Inc.
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of
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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
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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
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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…
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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
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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
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8
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8
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
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©
Profits
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Inc.
Page
9
of
9
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.
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10
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.
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Page
11
of
11
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.
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12
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
©
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13
of
13
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
©
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Page
14
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14
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. 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‐
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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.)
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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
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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
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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.
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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
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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.
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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
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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
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©
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26
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
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Run,
Inc.
Page
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27
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.
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28
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
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. 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
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Inc.
Page
32
of
32
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
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33
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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
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35
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35
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
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Inc.
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36
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. 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