Amazing Forex System
Here is the basic concept of how forex system works. After this brief overview I will explain a lot more in a lot more detail. For those of you who are beginners, if you get confused with any of the terms in this brief overview then don’t worry about it, I’ll explain better later. This is intended to provide an overview of the trading strategy.
For over a year of trading and watching the Forex markets I noticed something interesting, which anyone who pays attention to the markets should have noticed. Usually everyday, and often more than once a day, the currency pair will be moving along slowly (sideways movement, consolidation) and then all of a sudden it JUMPS! It very quickly moves up ten or more pips, usually in just a minute, and often continues to move strongly for another hour or so.
This is due to the release of a “Fundamental Announcement”, and of course any experienced trader should understand that they usually create a market movement.
I’ve played around trying to capitalize on these movements, and over time have come up with the perfect strategy to do just that. I don’t know why somebody hasn’t come up with this strategy before. Maybe some traders out there have figured this out, but I don’t know of anyone who is selling this strategy. Either they are jealously keeping the secret to themselves, or they are so busy with the hundreds of other more complicated systems that they simply overlooked this simple yet powerful strategy.
Basically, you find out when Fundamental Announcements are due to be released and then just a minute before the release time you set up two entry orders go either long or short so when the market explodes in either direction (you really don’t care which way it goes) you are in for a profitable ride. Typically the market moves 30 to 60 pips when this happens, but frequently it goes 100 or more pips!
Considering that you typically set up your trades with a stop of 20 to 60 pips this alone is amazing. Thus your risk with this system truly is minimal. If you trade this system with only a 20 pip limit your limit-to-stop ratio is 2:1, and if you do the “baby-sitting” thing where you can easily capture 40 to 150 pips then your ratio goes to 4:1 to 15:1.
Now, if this didn’t get you excited then you better check your pulse because this is truly an impressive system to consistently earn you awesome gains!
Basic Things to know:
Currencies are traded in pairs, meaning that you are really trading one currency for another. A simple way to understand this is to consider what you do when you go on foreign vacations. If you are an American (for example), and you plan to travel to another country, say Canada, then you might take say $1, 000 USD to the bank to change it for Canadian dollars. Let’s say the exchange rate is 1.4000, then for your $1,000 USD they would give you $1,400 CAD (ignore bank spreads/commissions). Now let’s say you didn’t spend the money and upon coming home you decide to change it back to USD currency. Now let’s say the exchange rate is 1.3700 (a change of 300 pips that could happen in a week), so your $1,400 CAD would convert back to $1,021.89 US (again, ignore bank spreads/commissions). Therefore you just made $21.89, a 2.19% increase in funds (not bad).
In the Forex market you could have simply traded the “Currency Pair” called USD/CAD, first selling USD for CAD, and then later buying back USD with the CAD you have. Basically, you are trading one currency for the other.
Usually currencies are traded against the US dollar (USD), so you may be trading the US dollar against the Euro (EUR), British Pound (GBP), Swiss Franc (CHF), Japanese Yen (JPY), Australian Dollar (AUD), New Zealand Dollar (NZD), and of course Canadian Dollar (CAD). There are other currency pairs, but you normally won’t be dealing with those.
When you are trading you are attempting to capture “PIPs” (Price Interest Points), which is one/one-hundredth of a cent (for dollars). You will notice that the exchange has two extra decimals at the end. From our example above, there is a one-pip difference between 1.4000 and 1.4001.
One pip may not seem like much, but when you are trading large volumes of currency, say $100,000, then one pip times 100,000 is equal to $10 (less on certain currency pairs). When you are trading currencies the broker gives you typically a 100:1 ratio meaning that to “control” one lot of $100,000 all you need is $1,000 on margin.
Thus, as has been explained before, when you capture 20 pips from this amazing trading system then that means you have just earned $200.
Now, if you don’t have at least $2,000 to open a regular Forex trading account, or can’t afford potential 10 pip losses, then you may want to consider a “mini” account. Most online brokers offer mini trading accounts that you can open for as little as $300. With a mini account you are trading lot sizes one-tenth of a regular lot (10,000 vs. 100,000), with risk being one-tenth as well as your rewards one-tenth. Trading a mini account means that 1 pip equals roughly $1. If this is the only way you can afford to start trading then open a mini account. Remember, as your account quickly grows you can trade multiple mini lots, and trading ten mini lots is the same as trading one regular lot. You could open a mini account with say $300 and experience 100% to 200% gains in your first month, quickly building your account to be able to trade larger lot sizes.
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