As previously said I thought this system was one of the best one I purchased, only problem was it
had absolutely no chance of working. That said the information in the e-book I purchased for
several $100s well thought out, extremely relevant to forex and to a certain extent made mention
of the fundamental forces behind the movement of exchange rates.
However because the author made such bold statements about the performance of the system,
how it could turn $300 into $3000 in 6 months, and I spent such a long time banging my head
against this system thinking I was a bad trader, I have no problem with explaining his million
dollar system to you in my book along with my own renditions based on this system and the Joe
Ross techniques.
By the time I had finished with this portion of my forex trading education, I knew roughly what did
not work, I knew all about price movement and the psychology behind it, I had what I thought
were really good methods for entering and exiting trades, and I was aware of the fundamentals of
the market, (economic releases, central bankers speaking), but I was still unable to turn a profit.
The reason behind this is I did not have a clear mental picture of what they forex market actually
was, I was scared to even attempt to try a more fundamental approach as I would be in the
realms of hedge funds and investment banks. I needed to try and copy what the other retail /
home based forex traders were doing.
Thinking about it now, I was stuck in a box and going through mental grid lock. I did not know it at
the time, or perhaps did not what to accept it but 90% of internet traders lose their money to the
market and I would reckon about 50% of these losers go on to steal their peers money through
the sale of scams, lies, and suicidal advice.
This chapter will cover this slightly better bogus forex trading system’s techniques and my
attempts to improve them, which finally resulted in me only doing the “50/50 bet” on major
economic release as these were the only times when I at least knew there was about and 80%
chance of a major move, that techniques does not work either, you are trading on too small a time
frame and are just as liable to get wiped out by the high volatility as you are to make money.
Here is a quick look at how this guy makes his millions:
This guy’s system is so good that the trades you will select with it will generally never go more
than 20 pips against you for the life of the trade. Oh yeah and make sure you get some training!
I purchased his “Clever Profits Package”. He is a clever man and was making a profit from me.
The package consisted of two books, Forex Surfing and Explosive Profits.
You should have read the online Joe Ross book by now so you will understand when I say Forex
Surfing is basically buying break outs of Ross hooks™ or using traders trick entries and then
Fibonacci extensions to get out. “Explosive Profits” is a book about how to gamble on major
economic releases.
Well I basically summarized his Forex surfing book, so I could have a set of trading rules on the
wall in front of me when I was trading. I am pretty much going to share my old trading rules with
you. Notice how at this stage I was aware of fundamental conditions and I had made mention of
them in my trading plan, problem was I did not have a real deep understanding of global
economics and knew little of how these news releases affected the market.
As I have said this system was very much like throwing darts in the dark, I had narrowed the best
times to trade down to 6am – 12pm EST, but in terms of exactly when to hit buy I was completely
clueless. Thus the 20 pip stop loss was hit time and time again.
My trading rules were adjusted over time to incorporate new knowledge, this continued until the
day I said to myself………”I actually have no idea of what this market is going to do next, then
only time there is any higher probability of a move in one direction or the other is during major
economic releases, this game is about probabilities, I am only going to gamble on economic
announcements from now on.”
I will share the first rendition with you, (the version most closely matching the forex surfing
system) and then the final rendition with you, (the version most closely matching the “Explosive
Profits” system). The Final version was the system I was using at the time I got involved with my
forex mentor, (I can tell you I was instantaneously enlightened with regard to the global economy
after reading his work, and his daily analysis of the market against actual price action lets me see
this knowledge in action every day). More of that to come in later chapters, here is my first set of
trading rules; these most closely match the “Forex Surfing” system.
Sections 3 & 4 are taken directly from the “Forex Surfing” manual
Trade Management – (90% Management / 10% Method)
1. Insights
1. You only need do what you are happy to do. 1000s of trades are available. The market has no
power over you when you are not in it.
2. MADNESS of GREED. Thinking you have missed an opportunity, or waiting the whole day and
not getting anything. Insight 1. a. and Dawson’s restart.
3. FRIDGENESS of FEAR. White FRAME OBJECTIVITY – sentiment, levels, opportunity, wave
strategy, covering room – are they all there? Then do not be afraid
2. Process
1. 5am EST – Start Prepping / 6am – 12pm EST – Trade
i. Don’t trade if you have other things to do
2. Wake up, dress, drink tea, read news
3. Decide on:
i. Levels + Sentiment (News releases, outlook, order board, news
flashes)
ii. Prepare the Fundamental Announcement tracker sheet
iii. Overall Trend + Micro Trend – (don’t fight the trend)
- Draw Pattern – size, position, Asian range
4. Write down proposed strategies
i. Refer back to these during trading to remain objective
3. Opportunities
1. Break out of congestion – Triangle, Flag, Range
2. Trading session move – Wave in Trend
3. Fib move in very big wave - Fundamental tops and bottoms
4. Joe Ross Major + Intermediate signals
5. Explosive profits
All of the above opportunities based on decisions made in step 2-b-i. to iii.
4. The Entry
1. Variation 1, wave size 5 – 20 pips, Buy a break of B if C > 0.382 / Stop below A
2. Variation 2, wave size 20 – 40 pips, Buy 50% retract / Stop below A
3. Variation 3, wave size 20 – 40 pip, Buy break or 50% retract / Stop below A or C
4. Variation 4, wave size 30 – 40 pips. Buy a break / Stop below C if > 0.382
How to put the odds back in your favor considering the spread
Trading rules
1. 2 x losses = stop 2. Out before FA, 3. Always use a Stop, 4. Don’t Marry
Micro Trends + REASONS
PATIENCE at the ENTRY, better entry = less risk + more profit BALANCE
1 Lot if FA factors are neutral or against you, 2 Lots if FA factors are positive or big Ross
* Know why you are getting into the market *
5. In Trade Management
1. Entry will never be 100%
2. Risk zone is there for your protection GOOD FOR YOU
3. Remain OBJECTIVE refer to notes from Step 2
i. During the heat of the trade is never a good time to be making
decisions; make the decisions in Step 2, (sit tight in the trade)
6. Trailing the 2
nod
lot in a 2 lot trade and adding lots
1. 2 Lots should only have been traded at the beginning of a breakout backed up by
strong fundamental data
2. 2
nod
Lot should be trailed using the compounded gains trailing method
3. Additional Lots maybe added based on compounded gains method if the pair
continues to trend strongly - (continued HH and HLs)
7. Exiting a Trade
1. A 1 lot trade should be set to limit at a reasonable number of pips
2. The 2
nod
lot, (if traded), should be trailed as per compounded gains method and set
to limit at a reasonable level after 11am EST
3. Stopped out or limited out of the 2
nod
lot after 11am EST is the only exit for the
second lot
4. Ensure no resting orders are still active after trade closure
8. Making more than one trade in a day
The build up to each trade must be the same as the first trade, CALMNESS, OBSERVATION,
WRITING, PLANNING, OBJECTIVITY – Insight # 2
30
1. If a 1 lot trade has been closed – (no fundamental data is present, therefore risk of
failure at resistance is high) – allow pair to congest and break out again before taking
another trade. Insight # 2
2. If 2
nod
lot of 2 lot trade has been stopped out – Pair is beginning to congest, allow it
to congest and break out again before re-entering
9. Explosive Profits
1. Note released figure vs. expected figure
2. Pick an objective stop loss position
3. Wait for pair to get within 20 pips and enter
4. If you miss that get in on break with 20 pip S/L
i.N.B. Enter S/L before clicking submit
10. Mistakes
Mental Mistakes
1. Shitting myself, Not allowing risk zone to work
2. Trading when you have other things to do – BAD move, un-professional
3. Getting Bored, Tired, Frustrated and throwing money at shit –
4. Trying to force an issue
5. Over confidence after a string of winners
Technical Mistakes
1. Ill positioned stop loss, (it’s not just a number), measure the wave, use the
correct entry variation. Those ill positioned Stop loss mistakes I made on
Monday 19/12/05 and Friday 23/12/05 – Remember the price pattern picture.
Price was still in the range of the major wave. The major wave is the one to
surf if this is the case – remember, remember, remember!!!!!
2. Not following re-entry rules
3. Not surfing # 1 out of congestion –
4. Compounded gains – It is not trending strongly if it is still in the range of the FA’s
wave. News must be in favor. Lots are added only when previous lots have profit
locked in
5. Thinking a small downward move in an ascending triangle is a break out
6. Explosive profits – Dodgy, dodgy – just be objective and careful
7. Not clearing active orders after trade completion
31
Here is the system after I had concluded the only time there was a high probability of a move was
during a major fundamental announcement.
Trade Management – (90% Management / 10% Method)
11. Insights
1. Only take high probability trades; such trades match all of the following conditions.
2. Do the easy thing
3. Be sensible when setting entry and exit orders. If an order is filled, objectively follow the plan.
Time is irrelevant; entry and exit levels are everything.
12. Process
1. Check the times of economic releases during the week and plan your trading times
around them.
i. Don’t trade if you have other things to do
2. Prepare the FA tracker sheet, Read news and Check chart 1hour before FA:
i. Establish Levels + Sentiment (Plug-in x 4 + Chart + CNBC)
ii. Note Inter and Intra day Congestions and Trends
iii. Asian range + ROSS levels + DON’T FIGHT THE TREND
3. Write down proposed strategies
i. Refer back to these during trading to remain objective
13. Opportunities
1. Trade after a volatile USD data release 08:30 or 10:00 EST
2. Trade through Ross level + any trade listed data
i. IntrAday rally and IntrAday congestion methods - 06.01.17.a
14. Technique
1. A few minutes before a listed FA place entry and exit orders either side of micro term
congestion, beyond levels ending in 0, with greater entry leniency for bigger
announcements.
2. Initial targets should be within the bounds of a daily extreme or recent support or
resistance, 10 pips if necessary for smaller announcements or distances or 20 pips for
big announcements, 30 pips max. Achieving initial target is important.
3. After the 1
st
position is filled alternate resting orders should be removed.
4. Stop should not be moved until 1
st
target has been achieved
5. 2
nod
lot is set to break even on achievement of 1
st
target, 2
nod
lot is then trailed as per
compounded gains
6. Reversal option may only be used if data corresponds to reversal direction and a risk
acceptable surf 4 is available
15. The 5 possible out comes
1. stopped for full loss
2. 1
st
target and stopped for 0
3. stopped for full lose and reverse
4. 1
st
target and stopped for 0 and reversed
5. 1
st
target and lock in on 2
nd
lot
Order is filled 1st target is achieved Does news favor a reversal? Stopped for full
loss Yes No Trade complete2nd lot stopped for 02nd lot locked in Trade
complete Wait for risk acceptable hook beyond reversal level to enter Hook is
available and order is filled Stopped for full loss1st target is achievedTrade
complete 2nd lot stopped for 02nd lot locked in Trade complete Trade complete
16. Caveats
1. You have to Enter via an Order
2. How to put the odds back in your favor considering the spread
3. Trading rules
32
- 2 x losses = out
- Out before FA *
- Always use a Stop
- Don’t Marry – keep losses small
4. Know the REASONS for why the trade will developed
5. Be objective with stop, entry and target levels
- Keep losses small
- Enter beyond resistance or zero numbers
- Achieve correct 1
st
target for situation
6. 1 and 2 are the most common results often happening so quick it barely feels as
though you have traded
7. 3 and 4 require the news release to favor a reversal and a risk acceptable surf 4 hook
must be available
8. Be happy with a quick result 2 most days
9. Result 5 should happen once every 2 weeks or so
10. Be aware of the daily exposure on a result 3
11. Stay in the water, each one is a job interview
12. Use above table and watch the trade develop into the appropriate out come.
13. Trades can happen quickly (feeling you’ve haven’t done enough work), or can take
time, (making you edgy and wanting to close at the wrong time). Time frame is
irrelevant, levels and strategy are everything, trail the 2
nod
lot
14. Ensure all resting orders are cleared on trade completion.
17. In Trade Management
1. Entry will never be 100%
2. Risk zone is there for your protection GOOD FOR YOU
3. Remain OBJECTIVE refer to notes from Step 2
i. During the heat of the trade is never a good time to be making
decisions; make the decisions in Step 2, (sit tight in the trade)
ii. Do not move the stop back – wrong filled sometimes
4. You need to be around to trail your stop loss
5. Set the 2
nod
lot to break even as 1
st
target is achieved
6. Trail the 2
nod
lot as per compounded gains if possible
i. Do not close the 2
nod
lot manually
18. Opportunity FAs
1. ISM Manufacturing 10:00 / 3
rd
not non-manufacturing
2. Non Farm Payrolls 08:30 / 6
th
3. Trade Balance 08:30 / 10
th
4. PPI 08:30 / 17
th
5. Retail Sales 08:30 / 14
th
6. CPI 08:30 / 16
th
7. TIC 09:00 / 15
th
8. FOMC rate 14:15 / 31
st
9. Mortgage Apps 07:00 / 8
th
10. Current Acc Q 08:30 / 14
th
11. New Homes Sales 10:00 / 23
rd
12. Existing Homes Sales 10:00 / 24
th
13. Durable Goods 08:30 / 24th
33
14. GDP 08:30 / 30th
15. Treasury Budget 14:00 / 12
th
16. Personnel Income & Spending 08:30 / 31
st
17. Consumer Confidence 14:00 / 30
th
18. German ZEW Econ Sentiment 05:00 / 10
th
19. ECB rates + press conference 07:30 / 2
nod
20. German IP * 9/5/06 06:00 / 7
th
21. EUR PPI 05:00 / 4
th
22. GBP CPI 04:30 / 17
th
Jan
News to watch
EUR zone retails PMI – 08:00 / 8
th
Bank of England Quarterly Inflationary Report 09:30 / 10
th
17.03.06 USD IP, Cap Util, Michigan 09:45
18
th
April Minutes of March 28th FOMC Meeting 20:00cet
Bank of England minutes 17
th
Uk retail sales 18
th
Usd wholesale inventories
19. Mistakes
1. Kidding myself, and not allowing risk zone to work – WHITEFRAME OBJECTIVITY. Not allowing 2
nod
lot to run –
WHITEFRAME NATURAL INHEREITANCE.
i. Scared to open a trade
ii. Scared to allow a position go into loss
iii. Scared to hold a position open until it’s target
iv. Scared to allow the 2
nod
lot to stay open after target is met
FEAR of entering the market. White FRAME OBJECTIVITY – sentiment, levels, opportunity,
wave strategy, target – are they all there? Then do not be afraid. FEAR of holding the 2
nod
lot – WHITEFRAME INHEREITANCE
Fear Mistakes
1. Ill positioned stop loss, (it’s not just a number), measure the wave, use the correct entry
variation. Those ill positioned Stop loss mistakes I made on Monday 19/12/05 and Friday
23/12/05 – Remember the price pattern picture. Price was still in the range of the major wave.
The major wave is the one to surf if this is the case – remember, remember, remember!!!!! –
You need to use the right strategy for the right wave and not over expose you’re self.
2. Not following the New Exit System rules - FEAR – WHITEFRAME INHEREITANCE
2. Getting Bored, Tired, Frustrated, and DESPERATE to trade; Throwing money at shit or forcing trades on the
machine – WHITE FRAME ABILITY MADNESS of GREED.
• Thinking you have missed an opportunity. Dawson’s restart
• Waiting the whole day and not getting anything.
• Needing to get in straight away on 50%! - Variation # 3
• Compelled to trade something because it looks good
• WHITE FRAME UNDERSTANDING, ACCEPTANCE, INHEREITANCE
Desperate Mistakes
8. Manually entering a breakout trade, (surf # 1 or 4 entry) – See day 06.01.17.a.jpg. You must
place and entry order to surf type 1 or type 4 entry. GREEDY, DESPERATE – WHITE FRAME
ABILITY
9. Thinking a small move is a big move
10. Not following re-entry rules
11. Not taking fundamental sentiment into account.
3. Trading when you have other things to do. Allowing people to disturb you – BAD move, un-professional
4. Over confidence after a string of winners, (this is your Arrogance). This will be a perpetual problem as you will inevitably be +10%
up after a number of days. This means:
i. Thinking of yourself as the god of trading
ii. Being lazy, thinking you do not need to study
iii. Sleeping, waking and gambling – thinking it has to work because the “god of trading” is
calling the shots
No matter what has gone before, each position you take you expose yourself 4% – 5%. Each day the market waits for you to hand it
10% of your account. If you aren’t 100% keen to put 100% effort in rather just watch the charts today, so much better that way
Sloppy Mistakes
12. Not clearing active orders after trade completion
13. Explosive profits – Dodgy, dodgy – just be objective and careful
14. Sloppy mistake after Pio
F OREX TRADING ADVENTURES OF AN IT PROFESSIONAL
THE PATH OF LEAST RESISTANCE
BLACK FRAME INTERDAY DESPERATION
WHITEFRAME ACCEPTANCE
WHITEFRAME INHEREITANCE
BLACKFRAME 2 X MENTAL / 2 X FEARFUL / 7 X DESPERATE / 2 X SLOPPY MISTAKES
WHITEFRAME CALM
WHITEFRAME OBJECTIVITY
Open the trade properly, and then close the trade properly.
- Know what you are doing, it is natural for you to be an overall winner
IF THE TRADE DOES NOT WIN IT IS FINE, JUST DON’T MAKE MISTAKES OPENING AND
DON’T MAKE MISTAKES CLOSING WHITEFRAMES & CONSISTENCY
ABUNDANCE IS MY NATURAL IN HEREITANCE, I WILL NATURALLY BE AN OVERALL BIG
WINNER FOLLOWING THESE ENTRY AND EXIT RULES, AND BEING AWARE OF THE
POSSIBLE MISTAKES
5. , high percentage trades. 1000s of trades are available. WHITE FRAME UNDERSTANDING,
ACCEPTANCE, the market has no power over you when you are not in it.
If you are wondering what all the “white frame” stuff is about see http://www.mindframe.co.za/ , I
am sure it works for some people better than others.
Please excuse me being a bit lazy and just copying and pasting my old trading rules into this ebook
without a giving particularly good explanation of them. Reasons behind this is these rules do
not work, please do not use them for your own trading, and secondly I have just pasted them as I
wrote them so I hope you will be able to see some of my thought process in my rules. You can
probably get a good idea of how much I was beating myself up over the number of “mistakes” I
was making.
I will say it again because it is very important THESE RULES DO NOT WORK.
Now I know I have complained a lot in this book, in fact I think that is what this book is about, it is
here to warn you about all the forex loser, sharks, who are there to scam you out of your money,
smash your dreams of being a trader and have absolutely no regard for your or your dependants
welfare.
I know there are 1000s of them out there, as I have said in some cases the actual information is
not too bad, but their lofty claims of endless wealth in the forex market make them little better
than drug dealers.
Here are a few examples of the constant problems I would encounter trying to trade this system
with limited knowledge of the fundamental driving force and structure of the forex market. You will
notice I not only had problems know when to open trades but also when was a good time to close
the trades. You can also see how on a small time frame you just get wiped out by stop running /
high short term volatility.
These were dark days in my trading life.
The next chapter will cover my first real conscious effort to get to grips with the fundamentals of
the forex market. The experience was so bad it confirmed my reasons why I never ventured into
the realms of the investment banks; as such the next chapter is going to be pretty short.
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