However, before we get into the heart of the Forex Trend Wave Trading system I want to go over a few basic things about the Forex Market in general.
The Forex Market is simply the Foreign Exchange Market which they took the ‘For’ from Foreign and they took the ‘Ex’ from exchange and put them together and called it “FOREX” for short. It’s also known as FX, too…
Since the Forex market has no central exchange like the Futures Market or the Stock Market. So what they have done is made up what they call an “Inter-Bank.” Where all the Central banks from all over the world exchange currencies over the counter for example: Exchanging Australian Dollars for US Dollars ect…
The Forex Market is made up of a lot of different currencies like the United States Dollar and the Japanese Yen, or the Swiss Frank. So what the Forex Inter-Bank has done is made them into pairs like the USD paired up with the Great British Pound Dollar.
So it would be symbolized like this: GBP/USD or USD/CHF for the United States Dollar and the Swiss Frank. There is 6 Major Pairs and a lot of other pairs that some of us traders either call “Exotic or Cross” pairs. Let’s first name the majors.
USD/CAD = United States Dollar and the Canadian Dollar.
USD/CHF = United States Dollar and the Swiss Frank.
USD/JPY = Unites States Dollar and the Japanese Yen.
EUR/USD = Euro Dollar and the United States Dollar.
GBP/USD = Great British Pound and the United States Dollar.
AUD/USD = Australian Dollar and the United States Dollar.
Now let’s name a few of the popular exotic cross pairs:
GBP/JPY = Great British Pound and the Japanese Yen.
EUR/JPY = Euro Dollar and the Japanese Yen.
CHF/JPY = Swiss Frank and the Japanese Yen.
Notice how they are all paired up with the JPY = Japanese Yen? There are many other Japanese Yen exotic cross pairs come to think of it…I guess they like pairing them up with the Japanese Yen for some reason…
Now let’s talk lots and pips… In the Forex Market they call order sizes in lots. For example, $100,000 United States Dollars paired up with let’s say Euro Dollars would equal to 1 full lot. Each full lot would equal to $10.00 per pip.
If you were trading in mini lots and let’s say you were trading 1 mini lot that would amount to $1.00 per pip. I bet you’re asking what does “Pip” stands for? It stands for “Point In Percentage” because for every 100 pips equals to 1 penny in that currency, so one thousand pips is equal to 10 cents out of one dollar.
So if you traded 1 mini lot 0.10 in lot size and you made 97 pips, you would have made $97.00 in profit. If you were trading 1 full lot 1.00 in lot size and you made 97 pips, you would have made $970.00 in profit.
In the Futures Market instead of pips they call it points. In the Stock Market they call it in the name of money like Joe Bill Stock has gone up 15 cents today.
But in the Futures Markets you will buy and sell Contracts of Sugar or Corn, with expiring contract dates, and in the stock market you can hold onto that Stock for as long as the Company who you invested in is still in business.
But out of all the Markets, the Forex Market is the biggest and BEST Market out of them all! And the reason is simple, Forex gives YOU the most opportunity because of the huge swings Forex makes each year.
Therefore, because the Forex Market has the most volume traded with over 3 Trillion Dollars traded on a daily basis! Yes folks I said 3 Trillion Dollars!
A lot of traders have left the Futures currency Market and the Stock Market because they can’t get the large order fills in those instruments like they can with Forex. Plus just the name “Forex!” is real sexy isn’t it?
You see, if you threw in an order to buy 100 contracts of the Euro Dollar for an example you may get 30 contracts filled at one price and 50 filled at another price and the remaining 20 filled at yet a higher price. Why? Because there are NOT enough traders to take the other side of your order.
In Forex, there are so many huge Institutions trading from all over the world, that there is nearly always someone willing to take the other side of our orders like 1000 lots or even 10,000 lots of currency.
Companies you might even work for may have traders trading for them with profits being made from the fruit of your labor.
In fact, a lot of companies hedge their money to lock it into a certain amount to further lock in a certain currency amount to buy stock and pay employees to keep their company afloat over the next 18 months.
Other companies may be operating at a loss and trade Forex to offset losses. There are a Trillion reasons why and that’s the beauty of it as there is always enough liquidity for us to get filled with our orders.
Okay enough said about the general basics of the Foreign Exchange Market … how about we get into the heart of the Forex Trend Wave Trading System:
Time to go over the Buy and Sell trade rules:
Correct time to trade:
- UK Session 3:00AM Eastern Standard Time to 8:00AM Eastern Standard Time.
- US Session 8:00AM Eastern Standard Time to 12:00PM Eastern Standard Time.
Since we have the Forex Trend Wave Market Times Indicator it is real easy to decipher when to trade and when NOT to trade.
The first dark Green Box that starts to paint is the UK session and it will paint in the box from the start to the finish and from the high to the low for that particular days trading session.
The US session will be the next light green box that will be painted from the start of the US session to basically the end of the US session. And it too will paint the box from the start and end, and the high and low made in that particular session.
Here is an example for you to see:
We always start to look for potential trade setups at the start of each session in either the UK session or the US session.
The best entry time is always within the first 30 to 90 minutes from the open of the session; however, we never enter a trade near the close of the session because you never know what could happen in the last few minutes in that session, because price may reverse in the opposite direction.
The system in itself is very simple. All that you’re really looking for is when the painted bars go from being painted Blue to Gold then to Red, which you would go short.
Or, when the painted bars go from being painted Red to Gold to Blue, you would go long. As long as there is NO major Support or Resistance near by. We always need to look for possible reversal points while trading the Forex Market.
Let me show you a few examples to see what I mean:
Let me show you another trade example, this time it is a buy trade:
Not too shabby huh? Almost 100 pips taken on this trade in the UK session when you apply the simple Forex Trend Wave Trading System to your daily trading plan?
Lets go over the rules…first we wait till the start of the UK or US session then we wait for it to from being painted Blue to Gold then to Red, which you would go short. Or…
…when the painted bars go from being painted Red to Gold to Blue, you would go long. It’s that simple…
High Risk Entries:
Now when you see it go from Blue to Red with NO Gold in between you must be careful because this means that the trend changed rather rapidly! You can jump into these trades as well but I consider them to be ‘Higher Risk.’
The best setups are when we have a few Gold bars in between so that the trend change was developed in a gradual manner.
You place your Stop Loss a few pips above the swing high in a Sell trade setup. Or…
You place the Stop Loss a few pips below the nearest swing low in a Buy trade setup.
As you can see the 3 color sequence is similar to when you drive your car? Accept for the ‘Green Light’ we are using Blue.
You have two choices here when it comes to exiting the trade or taking profits:
- When it changes color to either the neutral Gold color or when it turns to an opposite color for an opposite trade.
- Or, you can simply do a 1 to 1 win loss ratio meaning if your Stop loss is 50 pips your Take Profit will be 50 pips. You can do 2 to 1 win loss ratios as well with say a 50 pip Stop Loss and a 100 pip Take Profit.
You trade this on the M5 or M15 but I prefer to trade it on the M5. You can trade this on any pair you wish. I myself prefer to trade it on the EUR/USD and the USD/CHF.
In fact, look at these nice trades on the USD/CHF:
What’s really good about the Forex Trend Wave Trading System is the ‘advanced version’ has an alert so you can do other things while you wait for it to alert you when the trade sets up…
I want to take this moment to thank all of you for reading this brief manual. It is my utmost pleasure to share my innovative trading concepts with all of you so we all can learn to trade the Forex Market much more effectively.
I truly feel that you will start to make pips like never before if you follow and apply my simple trading rules to your daily trading routine. Go ahead and “Trade Forex Trend Wave” for a few weeks and see for yourself what I am going on about…