6SIMPLE STRATEGIESFOR TRADING FOREX
How to Get the Most Out of This BookThank you for downloading “6 Simple Strategies for Trading Forex”. This book is designed forbeginning, intermediate and advanced traders. The presenters in this book are leading expertsin trading the Forex market. As a bonus, you will also be exposed to a chapter on TradingPsychology and how to trade Forex pairs on the Nadex exchange.As you read this book, you will be exposed to multiple strategies that have high probabilities ofsuccess and/or high profit. Many of these strategies were selected by pouring over webinarsthat have been hosted by TradingPub in the recent past. Each webinar was transcribed into a“game plan” for executing the strategy. Most of the strategies in this book is divided into threesections:The Game PlanAn introduction to Forex. The individual strategy for trading Forex is then thoroughly explainedalong with illustrations and examples.The MovieOnce you have read the chapter, you can view the complete webinar on the strategy. You willgain a better understanding of the strategy along with multiple examples not covered in thechapter. In some cases, the presenter switches in to live trading to demonstrate the strategy inaction. In many of the webinars, the presenter also fields questions from attendees.Special OffersIf you really like a strategy, you can follow the presenter and the strategy. There are thousands of dollars’ worth of trading tools, indicators, training and mentoring services, books andvideos available at steeply discounted prices.
In short, you will have all of the information you need to trade your new favoritestrategy tomorrow. Some of the things you will learn in this book are:Some of the things you will learn in this book are: How to gain control of your emotions when trading (Trading Psychology) How a simple strategy can help you spot trend continuation and reversals How to win up to 75% of the time with a trend continuation strategy How to stay within a defined Forex Profit zone. How banks manipulate Forex and how to trade on their side How banks balance their currency portfolios and how you can profit from his.At TradingPub, it is our sincere hope that you take away several strategies that you can usewhen you are done reading this book. You will also learn about markets that you currently don’ttrade, and you will find out if they are suited to your trading personality.Finally, make sure to subscribe to TradingPub. We provide free ebooks, webinars, on-demandvideos and many other publications for active traders in all of the markets. Our presenters areworld-renowned industry experts and our content is provided free of charge in a relaxed andfriendly setting. Cheers to your trading success!
Table of ContentsMASTERING YOUR INNER GAME7-22A SIMPLE 123 FOREX STRATEGY23-34THE CONTINUATION METHOD35-54WHY YOUR ENTRY STRATEGY[ALMOST] DOESN’T EVEN MATTER55-60THE BANK TRADING FOREX STRATEGY61-72The Final Frontier - Order Flow TradingThrough Volume Price Analysis73-81Trading the London Session with NadexBinary Options82-89By Rande Howell, Med, LPC Trader’s State of MindBy Jody Samuels, CEO, FX Trader’s EDGEBy Cecil Robles, Founder/CEO Your Forex MentorBy Casey Stubbs, Founder, Winners Edge TradingBy Sterling Suhr, Co-Founder, Day Trading ForexBy Ricardo Menjivar, Founder, Phoenix Trading StrategiesBy Cam White, Trading Pub
MASTERINGYOUR INNER GAMEBy Rande Howell, Med, LPC Trader’s State of MindAs a trader, do you ever wonder why you can’t achieve the results that you want toachieve? Do you find yourself constantly making the same mistakes? Are you controlledby your emotions? These are mistakes that all traders make, but the successful tradershave learned how to manage their inner game. In this section, we are going to learn howto overcome the eight road blocks to successful trading.To get started, let’s first look at the components that make up a successful trade:Without integration of each component, you are an incompletetrader - risk is stacked against you.6 Simple Strategies for Trading Forex7
First you need to have a trading platform, trading methodology and a trading state ofmind. There are multiple trading platforms and numerous trading methodologies you canuse, so it’s important that you choose risk management strategy and trading platformyou’re most comfortable using. But it’s also critically important to have the right tradingpsychology. If you don’t have the right mindset, it really doesn’t matter about your tradingplatform or methodology. You need to have balanced integration of these three criticaltrading components. It doesn’t matter how good you are at knowing how to trade if youcan’t hold your wits together.Let’s face it, most traders early on are looking for the magical secret, or the “Holy Grail”of successful trading. They chase the best charting software, newest indicators, data andnews services, mentoring programs, you name it. What they are looking for is the magicsolution to trading, when they don’t recognize that they themselves are the problem.There is no magical “Holy Grail” for trading success “out there”. The secret to tradingsuccess lies within yourself, just waiting to be discovered. Remember this adage:“80 percent of trading is in your head”.What separates the elite golfers from the rest of the field? They all have the best equipmentin the industry. They have spent countless hours practicing and perfecting their craft. Theyknow how to drive, chip and putt. So what separates the elite golfers from the rest of thecrowd? They know how to do it in the clutch, when the money is on the line. This lessonis about learning how to develop the mindset of a peak performance trader – to separateyourself from the sea of traders who are inconsistent and bleed out their accounts.86 Simple Strategies for Trading Forex
What the Untrained Brain Sees when the UntrainedMind Experiences UncertaintySince the beginning of time, our brains have been trained to see uncertainty and fear asone in the same thing. How many times have you had your finger on the trigger, but youjust couldn’t bring yourself to execute the trade? How many times have you bailed outearly on a trade, only to watch it run in the direction you thought it would? That is yourbrain perceiving psychological discomfort as a biological threat. Unless you can untanglethat association, and re-train your mind, you are likely to repeat these behaviors overand over again.The markets don’t care about you. You can trade them as long as you have capital, butsooner or later, usually after drawing down your accounts, you come to the realizationthat you need to work on yourself if you are going to be successful at trading.Recognizing that we have been historically been wired to associate psychologicaldiscomfort (fear) with a biological threat, let’s break down the components of emotions.An emotion is how the body/brain/mind gets triggered to any disruption of a familiar status.It’s a common buzzword in trading to talk about simply taking the emotion out of trading.The reality is that the only time humans can do anything without emotion is if they’redead. Emotions are biological and they take over our psychology. We need to accept thatwe are emotional creatures and that our psychology is governed by our emotions. Sothe key is - how do you manage your emotions? We don’t have freedom from emotions,but we can have freedom of emotions. You can become the designer of theemotions that you respond to.6 Simple Strategies for Trading Forex9
Emotions can be broken down into five major components:1.- ArousalThat’s the revving-up of an emotion. Think about yourself when you are in the midst ofengaging in a trade. Your body starts tensing. You stop breathing, or your breathing maybe “high” and “low”. Your heart accelerates. Your eyes are fixated on the screen. That’sarousal, and it’s the first aspect of your emotions that you must learn to manage. If youcan’t, then you will lose control of your emotions.2.- FeelingThis is where the biological chemistry creates a subjective experience of the emotion. Ifcortisol is pulsing through your body, it can produce a sense of fear. If testosterone levelsbecome elevated, it produces a sense of grandeur. Both of these responses can lead tocostly trading mistakes. You can be afraid to pull the trigger on a trade, exit a trade earlyor double-down on a risky trade.3.- MotivationOnce the chemistry is released into your system, your body will usually pointed into a“fight or flight” response. You perceive a threat, and you are either going to attack it oravoid it. If you hesitate on a trade, you are in avoidance. If you revenge-trade after alosing trade, you are in attack mode. It’s important to have a trained mind to regulatethese responses to a perceived threat. Developing a curious mind allows you to act withpatience and discipline, keeping your long-term interests in mind.4.- MeaningThese are the beliefs you have developed to manage uncertainty. We need to rationalizeour behaviors so they make sense to us.5.- TemperamentQuite simply, this is genetics. How is your body genetically predisposed to handlingemotion?106 Simple Strategies for Trading Forex
Separating Uncertainty, Worry andUnderstanding that we are emotional creatures, the first task in re-training your mind isto separate uncertainty, worry and fear.UncertaintyYou can’t control the markets. The markets do what they want to do. Nothing can bepredicted with absolute certainty, only varying degrees of probability. We have beentrained as we grew up not to make mistakes. We have conditioned ourselves and ourbrains are biased to predict with certainty.WorryIf you feel that you can’t control the outcome of a trade, then worry sets in. Your brainstarts to project into the future and it’s seeing bad things on the horizon. So your brainbecomes a negative assessment machine, and you continually traumatize yourself byworrying.FearFear is wear all thought becomes hijacked, and you panic or freeze.6 Simple Strategies for Trading Forex11
The mind that you bring into trading isn’t necessarily a mind that is conducive to successfultrading. Remember that the brain associates psychological discomfort with biologicalthreat, and we need to learn to avoid fight or flight behaviors. Ninety percent of traders losemoney because they are making fear-based trades or impulse-based trades. On the fearside, they are afraid to pull the trigger at the right time, or they get out of trades too early.The impulse-based trader gets involved in revenge trading, throwing good money afterbad. What you’re looking for is mindful trading where you make well-reasoned decisionswith your emotions under control.So the question then becomes,“How do I organize my mind for higher function in trading?”126 Simple Strategies for Trading Forex
The Impact of Emotions on Your TradingFear, until mastered, blocks the development of your potential. To develop as a trader,you need to be able to confront fear to change your pattern of reacting to an uncertainworld. Your brain is a negative assessment machine that does not distinguish uncertaintyfrom fear. It’s organized for avoidance, and trying to keep you in your comfort zone,which is the familiar. It forms self-fulfilling patterns based on the avoidance of fear anduncertainty. These patterns are set on “cruise-control” and dominate your state of mind,forcing you to trade from avoidance and greed rather than calm impartiality.The best way to get started in gaining control of your emotionsis to label your fears:1.Fear of uncertainty (hesitation)2.Fear of loss (pulling the trigger at the wrong time)3.Fear of missing out (impulse trades and exits)4.Fear based urgency to make up for prior losses (revenge trading)5.Fear of not being right (making a mistake)6.Fear of inadequacy (not feeling that you’re good enough to trade)7.Fear of self-sabotage (blowing yourself up)8.Fear of success or failure9.Fear of growth and change (moving out of your comfort zone)Which one of these fears drives your trading? If you’re honest with yourself,you may have experienced most or all of these fears at some point in your trading6 Simple Strategies for Trading Forex13
In this flowchart, everything starts with your emotional state. That feeds your state ofmind, which forms a decision, and triggers a trade which ultimately has a profit or loss.The results of that trade feed into your emotional state prior to your next trade. Tradingwithout emotion is not possible, but it is possible to design the mindset you need to tradewith calm impartiality. Your trading account is the scorecard if your emotions are undercontrol.146 Simple Strategies for Trading Forex
Manage the Biology of Your Emotions FirstEmotions have biolog