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TABLE OF CONTENTS RISK DISCLOSURE STATEMENT / DISCLAIMER AGREEMENT... 1 INTRODUCTION... 3 SETTING UP YOUR CHARTS... 4 PUTTING IT ALL TOGETHER... 8 BUY TRADE RULES... 10 SELL TRADE RULES... 11 BUY TRADE EXAMPLE... 12 SELL TRADE EXAMPLE... 13 CONCLUSION... 14 2
INTRODUCTION The trading system is a simple yet powerful system that has performed well during Demo and the Live Rounds of the recent Surefire Trading Challenge. It is a simple system that would be ideal for new traders that are still getting up to speed with trading the Forex market but can also be very powerful in the hands of more advanced traders. The system relies on two key custom indicators that many traders are unaware of. The system has also been designed to work on an intraday basis but it can be traded on all timeframes and all available currency pairs. The system is very easy to apply once you are familiar with the rules. It uses a 1:1 to 1:1.5 risk/reward ratio which means you could potentially gain as much as you risk or more on each trade that you enter. The indicators that are part of this system are very easy to understand and interpret making it a great system for new traders. The system can be considered as a conservative strategy which means that the risks are relatively low. This is a trend following strategy and the entire strategy revolves around ensuring that traders remain on the right side of the trend at all times. As you know, the trend is your friend and if you can follow the rules of this trading system you can be sure that you will remain on the right side of trade for the majority of your trading endeavours. 3
SETTING UP YOUR CHARTS This system uses two custom indicators that are to be downloaded to the MetaTrader 4 trading platform which is available through most brokers on the web. The primary indicator is the indicator and the second indicator used in this system is the Histogram (TPH) indicator. We ll go into greater detail about how these indicators are used as part of the trading system but before we can get to that, we will need to setup our charts by applying each of the indicators and configuring the settings. Setting up your charts to trade this system is very easy. Once you are done setting up your charts, this is what your charts should look like: As you can see on the chart image above, the system relies on an uncluttered chart setup. Once you are familiar with the Buy and Sell entry rules, identifying trade setups becomes very simple. Before we get to the rules for entering trades, we will need to prepare our charts so let us now take a closer look at how to accomplish this. 4
The first step is to install the indicators and chart template. Please download the files from the member s area. Open the zip archive then double click on the TradePredator.exe file to start the installation wizard On the image above you can see the installation wizard which will install the indicators onto your MetaTrader4 platform, and save the template into your templates folder. Once done, you may apply the chart template on your chart. Just open your MT4 platform, click on the Templates icon and select the TradePredator template. 5
The indicator helps us to identify the overall trend and the direction in which we should be looking to trade. When the produces a Red arrow on the price chart, it is a good indication that the market is starting to move downwards. And in the same way, when the produces a Blue arrow on the price chart, it is a good indication that the market is starting to move upwards. 6
The Histogram indicator helps us to confirm the overall trend and identify an area where we should be looking to enter the market with a trade. There are 3 horizontal lines that need to be aligned to produce a valid signal or confirmation of the trend direction. As you can see on the image above, when the 3 rows of histogram bars on the Trade Predator Histogram are Red, we have a valid Sell signal. When the 3 rows of histogram bars are Blue, we have a valid Buy signal. 7
PUTTING IT ALL TOGETHER Now that you know how to setup your charts we can take a closer look at how the different components of this system work together to produce trade signals. This system works on all currency pairs and all time frames. This system is ideal for day trading and has been found to work best on the 1 Hour time frame. The indicator is the core of the system. This indicator determines the direction in which we will trade. The will notify us when there is potential for a new trend by inserting either a Red or Blue arrow on your chart. On the images above, you can see that when the market is considered to be in a downtrend the will produce a Red arrow pointing downwards. When the market is considered to be an in uptrend, the will produce a Blue arrow pointing upwards. As you can see, the indicator helps us determine the overall trend direction. Now let s take a look at how the Histogram serves to confirm the signal. On the images on the following page you can see an example of how the Histogram indicator helps confirm the trend direction we have determined using the indicator. 8
If the produces a Red arrow and the Histogram bars all turn Red we have confirmation that the market is heading downwards. On the other hand, if the produces a Blue arrow and the Histogram bars all turn Blue we have confirmation that the market is heading upwards. 9
BUY TRADE RULES Now that you have a basic idea of how the system works, let s take a closer look at the rules for entering Buy and Sell trades. These are the rules for entering a Buy trade: 1. Wait for the to produce a Blue up facing arrow. 2. Wait for the 3 Histogram bars to turn Blue. 3. Enter a Buy trade at the open of the next candle. 4. Insert your Stop Loss below the most recent Swing Low. 5. Set your Take Profit the same number of pips away from your entry price as your Stop Loss, i.e. a 1:1 or greater Risk/Reward Ratio. On the image above you can see an example of a Buy trade as per the rules of entry. As you can see, the produced a Blue upward facing arrow. The 3 Trade Predator Histogram bars turn Blue and at the open of the next candle I opened a Buy trade order. I then placed my Stop Loss below the most recent Swing Low around the 50 pips level. My Take Profit was set at the same number of pips as my Stop Loss. As you can see, price had eventually moved in my favour and taken out my Take Profit level. 10
SELL TRADE RULES Now that you have a basic idea of how the Buy trade rules work, let s take a closer look at the rules for entering Sell trades. These are the rules for entering a Sell trade: 1. Wait for the to produce a Red down facing arrow. 2. Wait for the 3 Histogram bars to turn Red. 3. Enter a Sell trade at the open of the next candle. 4. Insert your Stop Loss above the most recent Swing High. 5. Set your Take Profit the same number of pips away from your entry price as your Stop Loss, i.e. a 1:1 or greater Risk/Reward Ratio. On the image above you can see an example of a Sell trade as per the rules of entry. As you can see, the produced a Red downward facing arrow. The 3 Histogram bars turn Red and at the open of the next candle I opened a Sell trade order. At the open of the next candle I opened a Sell trade order and placed my stop loss above the most recent Swing High around the 22 pips level. My Take Profit was set at the same number of pips as my Stop Loss. Within the space of about 3 candles price had moved in my favour and taken out my Take Profit level. 11
BUY TRADE EXAMPLE Here is another example of a Buy trade using the system: On the image above you can see an example of a Buy trade as per the rules of entry. As you can see, the produced a Blue upward facing arrow. The 3 Trade Predator Histogram bars turn Blue and at the open of the next candle I opened a Buy trade order. I placed my stop loss below the most recent Swing Low around the 20 pips level. My Take Profit was set at the same number of pips as my Stop Loss. Price moved in my favour but it took a bit of time before price made its way up to my Take Profit level which was set at 20 pips away from the entry level. 12
SELL TRADE EXAMPLE Here is another example of a Sell trade using the system: On the image above you can see an example of a Sell trade as per the rules of entry. As you can see, the produced a Red downward facing arrow. The 3 Histogram bars turn Red and at the open of the next candle I opened a Sell trade order. I placed my stop loss above the most recent Swing High around the 22 pips level and my Take Profit was set at the same number of pips as my Stop Loss. Price moved in my favour immediately but it took a bit of time before price made its way down to my Take Profit level which was set just over 22 pips away from the entry level. 13
CONCLUSION By now I am sure that you will agree that the trading system is a simple yet powerful system. Remember, this system has performed very well during Demo and the Live Rounds of the recent Surefire Trading Challenge so I am sure that this system will work well for you when applied in the correct way. Take your time and practice using this system and you will see that this strategy can be very powerful in the hands of responsible traders. By trading this system you will always be on the right side of the trend and this is a vital part of being a profitable trader. Stick to the rules and I am sure that you will be very happy with the results. All the best! 14