GUIDE TO FOREX PROFITS REPORT

GUIDE TO FOREX PROFITS REPORT

CONTENTS Introduction... 3 First things first, get a demo!... 4 The Setup... 5 Indicators Explained... 8 IMACD... 8 Average Directional Movement Index... 8 The Strategy... 9 Risk management... 11 Forex Broker... 12

INTRODUCTION First off I want to say that I wrote this guide for the FOREX trader who just started out, and knows more or less what FOREX is about. If you have no idea what FOREX is or how it works please go to the following website and study at least the first 4 grades: http://www.babypips.com/school/ It is VERY important that you know the basics, for instance what a pip is, what a lot is, how trading works, how the currencies work etc etc. I would only be wasting my time to explain it to you because there are thousands of articles on the net explaining everything in perfect detail. This report is small, but powerful. The strategy discussed in this report works, but it is up to you to practice it and perfect it. You can easily make 20 pips a day with the information contained within this report. If you need to open an account at a FOREX broker you can use FXOpen, they have excellent customer support, and I personally use them myself: Open a FXOpen account

FIRST THINGS FIRST, GET A DEMO! Ok, so now you are ready, you completed the baby pips school and you wanna make some money! Slow down junior, you still need to practice. Practicing in FOREX is extremely easy and it costs you nothing. You only need to open a demo account at any broker on the internet. You can easily open a demo account by first downloading Metatrader 4 here: http://www.fxopen.com/download.aspx?name=fx4setup.exe Follow the installation instructions and run the application. Then go to File > Open Account. Then you will see the screen below, fill in your information and click Next. Select any server and click OK.

THE SETUP Ok, so now you demo account is registered and it should be active. In front of you you will see four windows containing charts. Close three of the four and maximize the last one so that it looks similar to the screen below: I m going to explain to you step by step what to do to set everything up. First off, you need to select the right time frame and chart. As the arrows above show, enable candle sticks, H4 chart and the right arrow is to give you some additional space on the chart. Press the + key on your keyboard to zoom in until your chart looks more or less like the following:

Ok, so now is where the fun starts. You will need a custom indicator to make this tactic work, the imacd. Almost like the MACD but slightly different and better ;) Download it here: IMACD (If your browser opens it as a document, save the page like you would a normal HTML page) To install it, copy the file into the experts/indicators folder within your metatrader 4 installation folder. You will have to restart metatrader 4 after you copied the file. Now on your left is a window called Navigator. Access the Custom Indicators folder and drag the IMACD indicator onto your chart window. Your chart should look as follows:

We will also need the Average Directional Movement Index indicator. That indicator comes with metatrader 4, and you can get the indicator in the Indicators folder. Also drag the ADX to your chart. Before clicking Ok you need to make some changes. Click on the Colors tab: Make the +DI like blue and the DI line red, then click ok. Your chart should look as follows: Before I start you should know the following: A white candle means trend is going down, and a black candle means the trend is going up. You can learn more about candle sticks by doing the babypips.com school.

INDICATORS EXPLAINED IMACD Ok, first off let me explain the IMACD indicator: When the yellow line crosses the red line it means the trend is changing. For instance when the yellow line at the bottom peak above crosses the red line, it means the trend is going upwards from now on. Te IMACD is quite accurate, but sometimes the signal is given too late to make a decent profit out of the trend change. There is a golden rule when using this indicator. When the yellow line crosses the red line near the zero line (the white horizontal line) it means the change of trend is going to be big, or the chance of the trend changing is big. So the farther away from the zero line the lines cross the less accurate it becomes. AVERAGE DIRECTIONAL MOVEMENT INDEX Below is the ADX indicator, you will only be using the dark blue and the red line: When red and blue line crosses each other it means the trend is changing. Almost the same like the IMACD indicator. Se when the red line is above the blue line it means the trend is going downwards, and when the blue line is above the red line it means the trend is going upwards. The aqua blue line only indicates the strength of the trend. So the higher the blue line the more power is in the trend.

So how do you use this system? Let me explain: THE STRATEGY Look at the two vertical red lines. The IMACD crossed at the one and crossed at the other one again. At the first red line you buy, and at the second red line you sell. The first cross indicates a change of trend (upwards), and the second red line also indicates a change of trend (downwards). So why do we need the ADX indicator? To verify the IMACD. You only trade when BOTH indicators tells the same story.

As you can see in this situation they do. Easy isn t it? Not really that easy, if you look into the future everything looks perfect, but let me cut away the chart to a time where you cannot see the future: The same case study, but we cut away the future. Look difficult now does it not? We know the two IMACD lines crossed, but we don t know in which direction! So how do we solve this problem? Well, to be on the safe side we don t! We wait until the line crossed so that we can see if the trend went upwards or downwards. Your winnings will be less but your chances of losing will be slim. This technique works on any time frame, but profits are obviously greater on larger time frames.

RISK MANAGEMENT The most important part of any strategy is risk management. For this strategy there is no definite answer, but use my rule of thumb: Never risk more than 3% on a trade. Only risk 3% of your account with a stop loss For instance if you have a $1000 account, and buy 0.1 lot, you can only risk 30 pips. A good place to place a stop loss is a few pips below the previous support or resistance level. If you don t know what support or resistance is go study it at the babypips.com school.

FOREX BROKER So who do you use as your FOREX broker? There are MANY out there, but few of them has what it takes to be a good broker. The one I use is called FXOpen. They have three different accounts, a micro account, standard account and an ECN account. The minimum deposit into an ECN account is $1000 so if you don t want to trade with such a large balance start off with a standard account. But please take my advice, NEVER start with less than $500. The less your balance is the less you can risk and the better chance there is for every trade to fail(go work out how many pips you can risk, risk at LEAST 15 pips). You can quickly lose money if you have a small account balance. What about leverage? If you are a beginner start out with 1:100. Only use larger leverage if you know what you are doing. Don t know what leverage is? Once again, go give babypips.com a visit. To open an account at FXOpen click here: Open FXOpen account Thank you for reading this small report! All the best Franco