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:
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:
- Each point on a triple fibonacci wave is numbered I through VII
- Points I through III is the 1st fibonacci wave
- Points III through V is the 2nd fibonacci wave
- Points V through VII is the 3rd fibonacci wave
- BLACK lines are NO-TRADE ZONES
- GREEN lines are LONG TRADE ZONES
- RED lines are SHORT TRADE ZONES
- S1 & S2 are SUPPORT LINES, which become RESISTANCE LINES when penetrated
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?
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.