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USD/CHF 1-hour trade example

This trade is a closed trade that was placed in the LIVE 90 day forex trading bootcamp, which shows you an actual trade that made 47.95% profit in 35 hours. This is just one of the many trades that I am sharing as part of the LIVE 90 day forex trading bootcamp.

The current time is 7:49 pm GMT on 06/28/2010, I just opened a trade on the USD/CHF. Looking at the current market snapshot, there’s an opportunity on the 1-hour & 30-min USD/CHF charts: Here are the details:

currency pair: USD/CHF

timeframe: 1-hour

Most Recent 1-hour wave: I – 1.0939

II – 1.0814

III – 1.0896

Entry: 1.0870 short

Stop: 1.0939

Limit: 1.0771

Max Profit: 125 pips

Max Risk: 43 pips

Reward/Risk: 290.7%

Entry Chart USD/CHF 1-hour

This is the chartshot that I used to enter this trade: As you can see, this trade signals the beginning of a third wave in a 3-wave pattern. Since we’ve reached point V by hitting the 61.8% level, this is a strong signal to go short.

Fibonacci Calculator

When I put the numbers in the calculator, I forgot it was a 3rd wave of a 3 wave pattern. Since the 2nd wave was shorter, it doesn’t matter since we use the shorter wave for a 3rd wave. Since I only used the single wave calculator, the same result is obtained. In my screen shot below, you’ll see that I used the most recent wave in the single wave calculator. This was a slight mistake, but it turned out not to matter…

Placing order at eToro

Step #1 is to hit “sell” on your currency pair (see image below). When you hit this button, you haven’t entered the trade yet. You will enter it when you complete step #2. Step #2 is to adjust your leverage to 400:1 & your risk to $25 & hit “open trade” (see image below): Step #3 is to adjust your stop & limit prices from your “open trade” screen. You can do this by clicking on the dropdown arrows from your open trade screen. Now the trade is live! I’ll update this trade when something changes. For now, there is a stop & limit so there is a clear exit strategy.

Trade Adjusted – Moved Stop

When the price moved below 1.0814 (IV on the picture below), this was a signal to move the stop to V. Since there is already a profit in the trade with a nice downtrend on 15-min, 30-min, 1-hr, & 4-hr charts, I’ve moved the stop up even further to 1.0840 to lock in a guaranteed profit of at least 30 pips. Not only can this trade no longer lose money, the worst that can happen is that I walk away with a 30 pip profit.

How Did I come up with 1.0840 as my stop?

Look at this picture below: In the picture above, notice the 3 dotted lines. These are the fibonacci lines for the recent downtrending wave. Notice how currenct prices have moved into a consolidation below the 61.8% level (38.2% retracement). Since the most recent wave hasn’t hit that level yet, I wanted to choose a stop that allows it. 1.0840 is a former support for two attempts at downward movement, so it’s a good resistance line to try to ride this trade further down. This allows downside potential for a breakout down on the recent consolidated range & locks in profits in the event of an upside channel breakout.

Stopped Out for 30 Pip Profit

On 6/30/2010 at 6:33 am GMT the trade hit the stop for a 30 pip profit when the price hit 1.0840. Had I kept the original stop, the trade would have hit it’s original profit limit of 1.0771 for a 125 pip profit. Some of the live bootcamp members didn’t adjust their trade and captured nearly 100 pips on this trade.

Final Thoughts

I was a little aggressive with a tighter stop on this trade. Since the 4-hour chart had a really strong downtrend it would have been fairly safe to keep the original stop until the price reached the newer low (falling below point IV), at that point I could have raised my stop to breakeven (entry price) and would have still made 125 pips. The price of locking in 30 pips profit was that it cost me 95 extra pips to play it safe. I’m never upset about taking profits, so this was definitely a good trade. I made 47.95% profit on this trade on the money I risked, which is superior to any type of savings account or mutual fund in terms of ROI. If you’d like to see these trades live, as they develop – there’s still time to register for the LIVE forex training, so you don’t miss any more opportunities.

Posted in trades

USD/CAD 15-min trade example

This is a completed trade example, this trade was originally posted in the LIVE 90 day forex trading member’s area.

June 23rd 2010: I just placed a trade on the USD/CAD 15-min charts. I’ll add more details soon, but want basic trade info to be public for now. Here are the details:

currency: USD/CAD timeframe: 15-min charts

I – 1.0308

II – 1.0457

III – 1.0359

IV – 1.0549

Entry -1.0398 long

Stop -1.0308

Limit – 1.0549

Reward/Risk = 167.87%

Potential Reward = 151 pips

Risk = 90 pips

Here are 2 screen shots:

100% Valid to Stick With Trade

Since this trade met all entry requirements, no adjustments are required. You could stick to the original trade plan, but since the 2nd wave may have failed (we don’t know yet for sure), it’s possible to make an adjustment. I made this adjustment & explain why below.

Trade Update – Stop Adjusted

After nearly 24 hours, I have adjusted the stop on this trade. The stop has now been moved up to the entry price of 1.0398 because a new high had been reached (point IV on picture below): Once the price in this trade reached a point higher than III, the stop can be moved from I to III. In this case I used my entry price as III. This trade is now a “risk free trade” because no loss is possible. I still haven’t changed my limit, but if we approach the most recent high (IV), if the trend turns down again, I will look for an opportunity on the 5-min chart to exit. The most recent movement on the chart looks like a potential candy-cane, so we could still see an upside breakout. We’ll probably be in a consolidation channel until the US market opens tomorrow.

2nd Wave Failure?

If you look at the 15-min USD/CAD chart above, you can see that the second wave after our initial I-II-III wave setup did happen, it was simply collapsed and distorted. This is due to a slowing momentum in the trend. This is also forming a potential double top. In this situation, we have some warning that the price might go down, so raising the stop is a good idea. This is a little more involved of a trade, but a good learning opportunity.

Waiting for a 61.8% Level

The most recent movement is potentially forming a new candy-cane. This would happen if the current price moves down to 1.0414. Once this happens, it could bounce up further. In this case, the price moving down a little bit isn’t bad… Of course the price could continue to go down, so we’ll have to wait & see.

Stopped Out for $0 Loss

Right before the North American market opened on June 25th, this trade hit it’s stop for a $0 loss. The loss was $0 because the stop was adjusted when we entered the second wave. See the picture below for when the stop was hit:

Final Trade Thoughts

This was a good first trade for the LIVE 90 day forex trading bootcamp. It introduced an adjustment strategy that I was planning to share a little later, but have now shared. I’ll be preparing a video to describe this in more depth. Now the forex market is closed, but next week will be even more exciting as I find more trades to share with you. The frequency of trades will increase, this week was kept intentionally slow to allow people time to follow a trade for possibly the first time!

Posted in trades

Forex Trading for Your Schedule

When to Trade Forex?

One of the most common questions I’ve received is:

“I’m busy, do I have enough time to trade?”

The answer is YES, when you understand that different timeframes provide different time commitments.

I personally don’t like sitting at the computer for 4 hours during a Forex Surfing or Forex Swimming session.  I’d much rather be out driving around Maui, playing guitar, swimming in the ocean, hiking a trail, or doing something outside. In fact, I generally don’t spend more than 2 hours behind a computer a day.

But I’m not everyone… It’s also really cool to know that you can sit down any time you’re free and grab some pips from the Forex.

Tailoring Forex Trading Timeframes to Your Schedule

You can trade the forex ALL DAY LONG, or you can check it a couple times a week. The beauty of trading forex is that you don’t need to be tied to a computer. The fibonacci trading method used in Forex Sailing, Forex Surfing & Forex Swimming allows you to place your order and walk away from the trade.

Let’s look at approximately how long a fibonacci wave takes to form in different timeframes.

4-hour charts: 5-7 days

1-hour charts: 24-36 hours

30-min charts: 12-18 hours

15-min charts: 6-10 hours

10-min charts: 4-6 hours

5-min charts: 1.5 to 2.5 hours

1-min charts: 15-25 minutes

These are approximate average times to help you know how long a trend will last, so you know how often to check your forex trading charts.

In my previous post “forex trading opportunities in all timeframes,” I gave a guideline for how often you should check your charts for changes. This was based on taking half of the shorter range of the average above. If you check your charts at these intervals, only 1/3 to 1/2 of a wave would have formed, so you probably won’t miss anything on those charts.

Have it Your Way Forex Trading

All you need to determine is how often you want to look at forex charts. If you want to look at them every 2 days, you’ll want to use 4-hour charts. If you want to check every 2 hours, use 10-min charts. Once the trade is placed, you can simply set your stop & limit & walk away. I’ll also be teaching you some optional trade adjustment strategies later, but for now you can just “set it & forget it.”

Here’s the timeframes & their maintenance requirements:

4-hour charts: check every 2 days.

1-hour charts: check every 12 hours.

30-min charts: check every 6 hours.

15-min charts: check every 3 hours.

10-min charts: check every 2 hours.

5-min charts: check every 45 minutes.

1-min charts: check every 5 minutes.

The only thing you need to be careful about is not to trade any currency pair lower than 4-hour charts on a day where there’s a HIGH impact fundamental announcement (you can get this info free at fx360.com).

Trade in Under 10 Minutes a Day

Portfolio Hedging allows you to trade in under 10 minutes a day. Sometimes I’m in the mood to catch a Forex Sail, but my mandatory daily trading routine only takes me about 10 minutes. All I do is login to the Hedge Report, make a few adjustments to my portfolio, and then hit the beach.

Posted in 90 Day Forex Trading Bootcamp