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Posted on April 27th, 2010
by Rapid Forex
Over the past week, I’ve been reviewing concepts for forex trading online that I call “Forex Sailing.” Today, I’m going to give you the EXACT RULES to follow to start looking for trading opportunities & go Forex Sailing!
For these rules, I’ll be referencing two pictures that I published in previous blog posts (make sure you read them to understand what I’m talking about).
In the post “Online Forex Trading Waves for Forex Sailing,” I introduced the concept of a single Fibonacci wave. Uptrending waves are called “forex candy-canes” and downtrending waves are called “forex umbrella-handles.” Specifically, this picture is important:
A fibonacci wave with a 61.8% retracement is a common price swing in online forex trading & forms the basis for Forex Sailing.
In the picture above, you’ll notice that there’s a price movement up to a 100% level (from the low to the high of the price swing) and then the price retraces to 61.8% of that high. If the price moved up 100 pips from 0% to 100%, you will want to look for a retracement to a level thats 62 pips above the 0% (low) level.
Different Fibonacci Retracement Levels?
In the picture above I mention a specific 61.8% retracement level. Many people have asked me:
“Aren’t there different possible retracement levels?”
YES!!! There are different Fibonacci levels, but….
The rules below allow you to deal with those levels automatically. Although you’ll be looking at a 61.8% retracement to enter the trade, you’ll be looking at wave patterns to exit. Even if the numbers are different, you’ll still exit the trade properly 
Simply follow the rules and you’ll see how they adjust themselves to the trading circumstances dynamically.
Fibonacci Wave Zones & Forex Trading Online
In another post called “Fibonacci Wave Zones for Online Forex Trading,” I introduced a picture that you can use to guide your online forex trading decisions:
If you haven’t MEMORIZED this picture yet, you should do so now!
Seriously, MEMORIZE IT NOW!!!
As you can see, there are two forex trading opportunities revealed in the image above. There’s a trade from III-IV, and a trade from V-VI. The rules for trading these waves are very similar, but slightly different, so I’ll cover the RULES separately below.
Rules for Trading the 2nd Forex Fibonacci Wave Online
When you arrive at point III on the picture below, you’re ready to sailing in the forex market.
Step ONE: Looking at the daily charts, determine the direction of the trend:
Once you determine the direction of the daily trend, ONLY look for Forex Sailing opportunities in the SAME direction as the DAILY TREND!
Step TWO: Looking at the 4-hour charts, determine these three prices:
I – the low price of the 1st fibonacci wave
II – the high price of the first fibonacci wave
III – the low price of the retracement of the fibonacci wave (close to current price)
Step THREE – Calculate the Following:
A: Find the DIFFERENCE between II & I – DO SUBTRACTION (II-I). If you get a negative number, just ignore the negative sign (remember the “absolute value” problems from junior high?). We’ll call this number D1 (D for difference).
B: Now we project a price target for IV by adding (or subtracting) D1 to III. For Forex Candy-Canes ADD D1+III to get IV. For Forex Umbrella-Handles SUBTRACT III-D1 to get IV.
Step FOUR – Looking at the 4-hour charts:
- Wait for the daily trend retracement (from II-III) on the daily charts to reverse. This means that you’re looking for a reversal signal, then a new fibonacci wave pattern to emerge and get to IV on the 4-hour chart. NOTE: this is the 4-hour chart now, NOT THE DAILY CHART!!! This 4-hour wave is breaking the little retracement wave on the daily charts.
- Once you get to a IV,V,VI or VII on the 4-hour charts in the direction of your trade, enter the trade as a MARKET order.
- As soon as you enter the trade – Place a STOP order at the price of I (see picture above).
- Exit the trade for a profit when you hit your projected price of IV (calculated in STEP THREE above). -OR- exit the trade if a fibonacci wave develops AGAINST YOU (in the opposite direction of your trade) on the 4-hour charts. If a Fibonacci Wave moving in the opposite direction gets to a IV, get out for a profit or a loss – just GET OUT!
Rules for Trading the 3rd Forex Fibonacci Wave Online
The rules for trading the 3rd fibonacci wave (from V-VI) are ALMOST the same. They’re just slightly different…
Here’s the picture again:
Here’s a little fact that I haven’t shared before:
The 2nd wave (from III-IV) is usually the BIGGEST wave in the three wave pattern. The 3rd wave (from V-VI), will be a smaller move. Usually the third wave is the size of the 1st wave (from I-II).
When riding online forex trading opportunities involving the 3rd wave (V-VI), you’ll need this modified set of rules:
STEP ONE – same as above.
STEP TWO – same as above
STEP THREE -
A: Find the DIFFERENCE between II & I – DO SUBTRACTION (II-I). If you get a negative number, just ignore the negative sign (remember the “absolute value” problems from junior high?). We’ll call this number D1 (D for difference).
B: Find the DIFFERENCE between IV & V – DO SUBTRACTION (V-IV). If you get a negative number, just ignore the negative sign (remember the “absolute value” problems from junior high?). We’ll call this number D2 (D for difference).
C: Which is smaller, D1 or D2? Pick the smaller number (hint, this is the shorter price movement from the two waves). We’ll call this number D3.
D: Now we project a price target for IV by adding (or subtracting) D3 to V. For Forex Candy-Canes ADD D3+V to get VI. For Forex Umbrella-Handles SUBTRACT V-D3 to get VI.
NOTE: This is really the same process as before, but since we have had two fibonacci waves happen, we’re picking the smaller price movement as our “safer bet” for sailing this forex trading opportunity.
STEP FOUR – same as above.
Follow these Rules for Online Forex Trading
Now we have the rules for Forex Sailing officially written down. I recommend that you print them out and keep them by your side when you go sailing in your online forex trading.
Tons of Examples Coming Next
It’s great to have the rules, but you won’t fully understand Forex Sailing until you see how the rules are applied to forex trading online. I’ll be posting many examples on the blog (and videos that I’ll have for you soon). Once you see plenty of examples, you’ll see how easy online forex trading is with Forex Sailing!
Posted in
Forex Sailing
Posted on April 25th, 2010
by Rapid Forex
This the is the weekly Forex Sailing Analysis for the 6 MAJOR currency pairs used for online forex trading for the daily trend direction.
This analysis IS NOT a trade recommendation. I am providing this to give you an idea of what direction to look for Forex Sailing opportunities in the 4-hour charts. This IS NOT a recommendation to trade daily charts.
To understand how to use this analysis, please read “Fibonacci Wave Zones for Online Forex Trading” to further understand the logic of why this analysis is important for trading Forex Sailing.
Currency Pair Sailing Direction Summary
USD/JPY & AUD/USD are in uptrends, so we’ll be looking for LONG FOREX TRADING opportunities this week.
USD/CAD is in a downtrend, so we’ll be looking for SHORT FOREX TRADING opportunities this week.
EUR/USD, GBP/USD, USD/CHF are in consolidation patterns, so we will avoid trying to sail them until a full fibonacci wave is formed outside of the consolidation channel.
USD/JPY Details
The USD/JPY is in it’s second UP TRADE ZONE (traveling from V to VI in a fibonacci wave pattern). This is a very strong uptrend to look for LONG FOREX SAILING opportunities in the 4-hour charts.
Fundamental announcements for the USD/JPY are happening frequently this week from Tuesday through Friday for both Japan and the United States. With so many announcements, this could cause too much volatility to go Sailing. Although the trend looks great, it would be wise to not go Sailing on this currency pair this week.
AUD/USD Details
The AUD/USD has just completed it’s third fibonacci wave in a recent daily uptrend. For Forex Sailing purposes, it’s still ok to look for LONG FOREX TRADING opportunities in the 4-hour charts. Watch this carefully as a consolidation or trendline break is very possible soon.
The USD has a HIGH IMPACT fundamental announcement being released every day this week between Tuesday and Friday. There are also several medium level announcements being released as well. This is not a good week to be trading currency pairs involving the USD as those HIGH IMPACT fundamental announcements could be too stormy for Forex Sailing.
USD/CAD Details
The USD/CAD has nearly completed it’s third fibonacci wave in a downtrend. Look for SHORT FOREX SAILING opportunities, but also look for an upcoming trend reversal or consolidation. Although trends can continue past a third fibonacci wave, there is a higher probability of consolidation or reversal after the third wave.
The USD has a HIGH IMPACT fundamental announcement being released every day this week between Tuesday and Friday. There are also several medium level announcements being released as well. This is not a good week to be trading currency pairs involving the USD as those HIGH IMPACT fundamental announcements could be too stormy for Forex Sailing.
Consolidating Currencies EUR/USD, GBP/USD, USD/CHF
These currency pairs are all in a consolidation pattern. This is probably because of indecision regarding the many HIGH IMPACT announcements scheduled this week for the US which forex traders are waiting to see the outcome of before moving. At this point, we want to avoid online forex trading these currency pairs and wait until trends form after the dust settles from these announcements.
EUR/USD
GBP/USD
USD/CHF
Cool Forex Sailing Trading Opportunity GBP/CHF
Just because the 6 MAJOR currency pairs don’t have many Forex Sailing opportunities this week, doesn’t mean that other currency pairs don’t!
Look at the GBP/CHF:
The GBP/CHF is in the first trading wave of an uptrending fibonacci wave pattern (moving from III to IV). there are no MAJOR news events, so this should be a smooth Sailing week for forex trading the GBP/CHF on LONG 4-HOUR CANDLE CHART Sails.
Posted in
Forex Sailing
Posted on April 22nd, 2010
by Rapid Forex
Now you’re ready to ride the waves of profitable forex trading online. When looking at fibonacci waves, there are certain “zones” that you can trade on. As you’ll see below, only 2 segments of a 6 wave pattern are tradeable for Forex Sailing.
Before I go further, here’s a quick recap of the Forex Sailing lessons that you should have already studied:
1. Timeframes for Trading Forex Sailing
2. Fundamental News for Forex Sailing
3. Online Forex Trading Waves for Forex Sailing
4. Multiple Forex Trading Wave Patterns
Forex Trading in the Zone
Now that you see how fibonacci waves fit together to form forex trading waves, it’s time to look at “where the trade zones are.”
In other words: “where are you looking to ride the wave to do your online forex trading?”
The Beginning of a Forex Trend
The important FACT that I discussed in the multiple fibonacci waves post is worth repeating:
FACT: Forex prices move in 1, 2 or 3 wave patterns
This FACT also means that:
FACT2: ALL wave patterns start with a single wave
This almost sounds stupid. It’s basic common sense. You can’t have a 2 or 3 wave pattern without having ONE WAVE FIRST!!!
Why is this important?
This means that we have to “wait” for a single wave to develop before we can see a new wave pattern!
Let me say this another way: “You can’t trade the first fibonacci wave because you won’t be able to see it until it is fully formed.”
Waiting for the 2nd & 3rd waves to start trading forex
Since you have to wait for the first wave, you’ll only be able to trade the 2nd & 3rd waves. I’ll give rules later about how to mechanically do the trade, but before you follow some rules blindly, here’s what you’ll be doing:
Study the picture above. It GIVES you a winning forex trading system ON A SILVER PLATTER!!!
Here’s what everything in the picture means:
Look at this picture and STUDY IT.
The Forex Sailing rules (coming soon) will show you how to do this. Before worrying about “how” to physically do these types of trades, UNDERSTAND what you’re trying to do.
What to Think During the Forex Sailing Trading Process
Here’s a walkthrough on what you should be thinking at each step of the wave picture above:
I & II - You don’t have an opinion yet. A fibonacci wave hasn’t formed yet. No forex candy-cane. No forex umbrella handle. You’re waiting for more to happen.
III - The first fibonacci wave has completed, now you’re looking for forex trading opportunities. You want to go long if the wave is a forex candy-cane. You want to go short if the wave is a forex umbrella-handle.
IV – You exit the trade for a nice profit. This could be a 2 wave pattern & you’re expecting a retracement going against you to the V level. If the trend ends at this point you have your profits. If the trend continues, you’ll be able ride the third wave for more profits from V to VI.
V – The 2nd fibonacci wave has completed. You get on the third wave and ride it to VI. To do this you’ll follow the rules for entering and exiting the trade (will be given soon).
VI - You exit the trade for a nice profit. The ride is over for you. It’s possible that the trend could continue in your direction for a 4th or 5th wave, but it’s too rare to risk it. You walk away happy with your profits.
VII – You were supposed to walk away from this trade at VI. WHAT ARE YOU STILL DOING HERE? You should be enjoying your profits and done with this trade Never regret taking profits. You could have made more, but you also could have done worse. What you actually *did* is most important!
Forex Trading Online = Waiting 2/3 of the Time!
Look back at the picture above (scroll up and look at it)…
Notice that there are SIX lines (7 points, but 6 actual lines).
How many of these lines are used for forex trading opportunities?
Only 2.
4 lines aren’t tradeable.
This means that 4/6, (or 2/3) of the price movements that happen in the forex market are ones that you WON’T TRADE!
When you’re not TRADING, your WAITING to TRADE
If you think that you always need to be trading forex, think again. Waiting for the right opportunity to happen requires some skill and patience. Keep following the rapid forex blog and you’ll be able to zone in on the 1/3 of the time when forex trading can be sweet.
There are a few more blog posts left in the Forex Sailing Series. Some of the topics that are coming are:
- Exact entry/exit rules for Forex Sailing
- Money management rules to grow your forex trading account safely & swiftly
- Tons of COMPLETE TRADE EXAMPLES with numbers, charts, and commentary
- Forex Sailing video webinar showing you EVERYTHING I do LIVE ON-SCREEN to go Forex Sailing
Study Today’s Post
All of the cool Forex Sailing stuff that’s coming your way will guide you to the forex promised land. For today, really take the time to learn today’s post. Print the image. Memorize it. Draw it on a piece of paper. Learn this concept & the numbers will be a breeze. Skip this picture and the rules will be hard to understand.
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Forex Sailing
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