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Triple Shot Forex Trading System The term "Day Trading" usually refers to the act of buying and selling a financial instrument within the same day. In the Forex market, a Day Trader will seek to make a profit by leveraging large amounts of capital to take advantage of small price movements in highly liquid currency pairs. In this report, we will look at a unique day trading strategy that can be used to accumulate profits when trading the Forex market. This report will include all the tools and information you will need to trade this system effectively. The method itself is very simple and built on solid trading principles. In this report you will learn how to apply the Equidistant Channel to a chart in order to determine the overall market direction. 2

This helps us determine which direction we will enter our trades. You will also learn how to confirm the trend direction using the MACD indicator and pinpoint an entry using the Bollinger Bands indicator. W e will also cover a variety of different exit strategies to suit both the most aggressive and conservative traders out there. Let s take a closer look at what you will require in order to trade this system Once you have the platform downloaded, you may proceed to install it. Once installed you will be prompted to create a new demo account. Fill out the required information and follow the prompts through to the end and you will have a brand new demo account that you may use to practice this system. Once you have your trading platform installed and you have opened a demo account we can proceed to setting up the charts and applying this trading strategy. W e will be using three different tools when trading this system. The technical analysis tools that we will be using are as follows: 1. The Equidistant Channel drawing tool 2. Bollinger Bands (default settings) 3. MACD (default settings) NOTE: If you are using any other trading platforms please check that all the required tools are available on your platform. So let s get started 3

The Equidistant Channel The Equidistant Channel represents two parallel trend lines connecting extreme maximum and minimum prices. Volatility in the market causes the price to jump, drawing peaks and troughs forming the channel in the direction of the trend. Early identification of a channel can give valuable information about the trend direction which allows traders to take advantage. In this trading system we will use the Equidistant Channel to determine the direction in which we will be looking to enter trades. HOW TO DRAW AN EQUIDISTANT CHANNEL: To draw the equidistant channel using the MT4 platform simply click on Insert. From the menu click on Channel then select Equidistant from the submenu. See image below: Once you have selected the Equidistant Channel drawing tool, you may begin drawing the channel on your chart. Click the left mouse button on your starting point on the chart. Hold the mouse button down and draw the channel in the necessary direction. Once you have reached the end point release the mouse button and the channel will appear on the chart. You can now select the parallel line and drag it to the most extreme high or low point depending on the direction of the channel. The direction in which you draw the channel depends on whether the candles are going higher or going lower. 4

EXAMPLES: On the image below you can see that from Point A onwards the new candles being formed are getting higher. This currency pair is in an upward trend so in this case we draw an equidistant channel by connecting the most extreme Lows. On the image above the most extreme Lows are at Point A and Point B. To draw a channel we simply select the drawing tool, then click the left mouse button at Point A, hold it down and drag it all the way up to Point B then release the button. At this point the parallel line will be inserted on the chart at any random position. W e need to left click on the parallel line, hold the mouse button down and drag it to the most extreme High. On the chart above, the most extreme High is at Point C. Now that we have drawn the channel on our charts we can clearly see that the market is in an uptrend. This means that we will only be looking for opportunities to enter Buy trades. NOTE: The Equidistant Channel only shows us the direction in which the market is moving. Before entering a trade we must confirm the trend direction using the MACD indicator then we can use the Bollinger Bands to determine exactly where to enter a Buy trade. We will cover these steps in more detail in this report. 5

On the image below you can see that from Point A onwards the new candles being formed are getting lower. This currency pair is in a downward trend so in this case we draw an equidistant channel by connecting the most extreme Highs. On the image above the most extreme Highs are at Point A and Point B. To draw a channel we simply select the drawing tool, then click the left mouse button at Point A, hold it down and drag it all the way down to Point B then release the button. At this point the parallel line will be inserted on the chart at any random position. W e need to left click on the parallel line, hold the mouse button down and drag it to the most extreme Low. On the chart above, the most extreme Low is at Point C. Now that we have drawn the channel on our charts we can clearly see that the market is in a downtrend. This means that we will only be looking for opportunities to enter Sell trades. NOTE: The Equidistant Channel only shows us the direction in which the market is moving. Before entering a trade we must confirm the trend direction using the MACD indicator then we can use the Bollinger Bands to determine exactly where to enter a Buy trade. We will cover these steps in more detail in this report. 6

Moving Average Convergence Divergence (MACD) The MACD is a trend-following dynamic indicator. It indicates the correlation between two price moving averages. There are three popular ways to use the Moving Average Convergence/Divergence: crossovers, overbought/oversold conditions, and divergences. In this particular trading system we will only be focusing on crossovers ONLY. This basically means that once we have determined the overall trend direction using the Equidistant Channel, we will be looking to the MACD for confirmation of the trend. If the channel is point downwards we will look to Sell when the MACD falls below its zero line. Similarly, a buy signal occurs when the channel is pointing upwards and the MACD rises above its zero line. Have a look at the following image: When adding the MACD indicator to our charts we will use the default settings which are as follows: 7

The Bollinger Bands The Bollinger Bands indicator has a tendency to adjust to the market conditions. W hen observing the bands you will notice that when the markets become more volatile, the bands widen and they contract during less volatile periods. Bollinger Bands are plotted on the price chart. The interpretation of the Bollinger Bands is based on the fact that the prices tend to remain in between the top and the bottom line of the bands. W hen using the Bollinger Bands indicator with this system we will use the default settings which are as follows: A distinctive feature of this indicator is its variable width due to the volatility of prices. In periods of high volatility the bands widen leaving a lot of room to the prices to move in. During periods of low volatility the band contracts keeping the prices within their limits. Abrupt changes in prices tend to happen after the band has contracted due to decrease of volatility. W hen it comes to our particular trading system, the following aspect is of vital importance. If prices break through the upper or lower band, a continuation of the current trend is to be expected. This basically means that when the trend on the Equidistant Channel and the MACD is up, we will be looking for price to break through and close above the upper Bollinger Band in order to enter a Buy trade. 8

On the other hand, when the trend on the Equidistant Channel and the MACD is down, we will be looking for price to break through and close below the lower Bollinger Band in order to enter a Sell trade. Take a look at the following image: The Bollinger Bands are used primarily for telling us when to enter a trade in the direction determined by the Equidistant Channel and MACD tools. When the Equidistant Channel and MACD are in a downtrend, we will ONLY be looking for price to break through and close below the Lower Bollinger Band in order to enter a Sell Trade. When the Equidistant Channel and MACD are in an uptrend, we will ONLY be looking for price to break through and close above the Upper Bollinger Band in order to enter a Buy Trade. Using the Bollinger Bands, MACD or the Equidistant Channels on their own is not a reliable way to trade the markets. So, to ensure that every trade we enter has a high probability of ending in success we will combine the readings from all three of these tools to generate signals that prompt us to enter Buy and Sell trades. 9

Putting It All Together At this stage you should have a pretty good idea of how this system works, nonetheless, let s do a quick summmary of key concepts. The trading system uses 3 major components to identify potential trade setups. W e use the Equidistant Channel drawing tool to determine the direction in which the market is moving. Once we have determined the overall market direction we look to the MACD for additional confirmation. If the MACD is in agreement with the Equidistant Channel, meaning that both are in the same direction, we can then look to the Bollinger Bands to identify a good area where we may enter a trade in the corresponding direction. It s as easy as that! Before we can identify potential trading opportunities, we need to setup our charts to trade this system. Take a look at the following image, this is what your chart should look like once you have it setup: 10

Sell Trade Examples RULES FOR SELL TRADES: 1. The market must be in a downtrend. If new candles being formed on the chart are getting lower, the currency is in a downward trend so we draw an equi distant channel by connecting the most extreme Highs. After drawing the channel, click on the parallel line, hold the mouse button down and drag it to the most extreme Low to complete the channel. 2. MACD must be below the zero line. 3. If the first two conditions are met, wait for price to break through and close below the Lower Bollinger Band then open a Sell trade. 4. Place a Take Profit of between 3-30 pips depending on the time frame. 5. Place a Stop Loss a few pips away from the most recent High or observe a mental Stop Loss if you prefer. NOTE: As an alternative, you may also choose to place a Stop Loss or exit the trade manually when the price crosses above the Middle or Upper Bollinger Bands or when price crosses above the upper Channel line. Let s take a closer look at an example of a Sell Trade, take a look at the chart image on the following page: 11

Here you can see an example of a Sell trade on the GBPUSD 5 minute chart: As you can see, after Point A, the new candles being formed are heading downwards suggesting that the market is in a downward trend. W e then drew an Equidistant Channel by joining the most extreme Highs from Point A to Point B. Once the Channel appeared on the chart, we moved the parallel line to Point C to complete the channel. As you can see the Channel is moving downwards. To confirm the down trend, we look to the MACD and see that it is below the zero line. W e now have confirmation of a down trend so we are looking for potential sell trade signal from the Bollinger Bands. At the red, dashed vertical line, you can see that the price breaks through and then closes below the lower Bollinger Band. W e then opened a Sell trade shown by the aqua, dashed horizontal line. The Take Profit level (green, dashed horizontal line) w as set 10 pips away and was easily achieved. 12

Buy Trade Examples RULES FOR BUY TRADES: 1. The market must be in an uptrend. If new candles being formed on the chart are getting higher, the currency is in an upward trend so we draw an equidistant channel by connecting the most extreme Lows. After drawing the channel, click on the parallel line, hold the mouse button down and drag it to the most extreme High to complete the channel. 2. MACD must be above the zero line. 3. If the first two conditions are met, wait for price to break through and close above the Upper Bollinger Band then open a Buy trade. 4. Place a Take Profit of between 3-30 pips depending on the time frame. 5. Place a Stop Loss a few pips away from the most recent Low or observe a mental Stop Loss if you prefer. NOTE: As an alternative, you may also choose to place a Stop Loss or exit the trade manually when the price crosses below the Middle or Lower Bollinger Bands or when price crosses above the lower Channel line. Let s take a closer look at an example of a Buy Trade, take a look at the chart image on the following page: 13

Here you can see an example of a Buy trade on the GBPUSD 5 minute chart: As you can see, after Point A, the new candles being formed are heading upwards suggesting that the market is in an upward trend. W e then drew an Equidistant Channel by joining the most extreme Lows from Point A to Point B. Once the Channel appeared on the chart, we moved the parallel line to Point C to complete the channel. As you can see the Channel is moving upwards. To confirm the up trend, we look to the MACD and see that it is above the zero line. W e now have confirmation of an up trend so we are looking for potential buy trade signal from the Bollinger Bands. At the red, dashed vertical line, you can see that the price breaks through and then closes above the upper Bollinger Band. W e then opened a Buy trade shown by the aqua, dashed horizontal line. The Take Profit level (green, dashed horizontal line) was set 10 pips away and was easily achieved. 14