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Forex Ladder

I unveiled a new online forex trading technique that I call “The Forex Ladder,” this is now a bonus course available exclusively to Hedge Report members.

We followed 2 currency pairs & made 245 pips profit with ONLY 10 minutes worth of work per day.  I’ll explain how below…

Buy Low Sell High

Any stock trader will tell you how to make money trading. You have to buy low & sell high. You can also sell high & buy low. In the forex the order you do this in isn’t important. It’s all about getting the right price.

The Forex Ladder

I’ve created a system that allows you to buy low & sell high, while simultaneously managing risk & reward. It’s ok to take on more risk if there’s a good enough reward for doing so.

What is the Forex Ladder?

Each day you log into your online forex trading account and place SIX entry orders. You do this at roughly the same time each day. It takes about 10-15 minutes and then you’re completely done until the next day.

Currency Pairs Followed

I’ve been developing the Forex Ladder for several years. For the first time ever, I shared the results with the LIVE Forex Training class that I taught.

Last week we followed the USD/JPY & USD/CAD. Here are the results:

USD/JPY Trade Results

On the picture below there is a green line to represent every time I went long and a red line to represent every time I went short. The thicker lines denote having bought or sold twice as many times at that price.

As you can see, there are more green lines lower (buy low) and more red lines higher (sell high). To see the actual profits on this currency pair for the week, please view the trade log below:

As you can see, these trades netted 287 pips profit in just one week of trading. The best part is this happened with only 10 minutes worth of work per day!

USD/CAD Trade Results

We also followed the USD/CAD last week. You can see the prices we bought & sold at in the image below:

This pair didn’t do as well, it actually sustained a small loss as you can see in the trade log below:

This pair lost 44 pips, which is modest compared to the MASSIVE 282 pip gain on the USD/JPY.

Overall Gain

Overall the Forex Ladder trading technique made 245 pips with less than an hour’s work in a week. This would have grown a forex trading account using proper money management techniques by 4.9%, which is fantastic for an hour’s worth of work.

Every trade was posted IN ADVANCE, BEFORE the trades happened, so this is proven to work.

The forex ladder technique is a bonus course in the Rapid Forex Hedge Report Member’s Area. This technique is not available anywhere else. I would love to share this method with you when you register for the Hedge Report today

 

 

 

 

 

Posted in Technical Analysis

Reward vs Risk for Forex Trading EXPLAINED

Lately I’ve been answering alot of questions about reward/risk ratios, it’s also part of the money management strategy taught in Forex Sailing.

Today I’m going to go a little deeper into this topic because it’ll help you understand online forex trading better.

Reward/Risk Ratio

Any time you place a trade, you should set a stop & limit. If you take the pips you will GAIN (if the trade goes well) and DIVIDE by the pips you can LOSE (if the trade fails), you get the REWARD/RISK Ratio.

This ratio gives you a percentage so you can understand the risk of the trade in a standard way.

Breakeven Analysis

Once you know the Reward/Risk Ratio, you can determine what percentage of the time you need to be correct to breakeven. If you’re right more than that you’ll make money. If you’re wrong more than that, you’ll lose money.

Let’s look at an example:

You find a Forex Sail. You determine that if you place a 100 pip stop and a 170 pip limit, you’ve got you’re trade. If you DIVIDE your potential REWARD by the total RISK you get 170/100 = 170%.

If we did many trades, here’s how we could breakeven:

1. Lose 100 pips 170 times = 17,000 pip loss
2. Gain 170 pips 100 times = 17,000 pip gain
3. Loss = Gain = Breakeven!

In this example there were actually 270 trades. We broke even when we were profitable on 100 of them. If we divide 100/270 (WINNING # of Trades / Total Trades) we get the BREAKEVEN PERCENTAGE.

In this case 100/270 = 37.04% is the BREAKEVEN PERCENTAGE

More About the Breakeven Percentage

If our trade works out more often than the BREAKEVEN PERCENTAGE we’re profitable as traders. In the example above we need to be right more than 37.04% of the time with that Reward/Risk Ratio…

Sounds good, doesn’t sound too hard to be right a little more than 1/3 of the time, right?

There is kind of a catch…a tradeoff really…

Breakeven Percentage Catch-22

The lower the breakeven percentage, the MORE LIKELY you are to be unsuccessful with your trade!

In our example the stop is much closer than the limit. Think about that for a minute…

If your stop is closer than your limit, you’re more likely to get stopped out, right?

The opposite is true. If the limit is closer than your stop, you’re more likely to hit the limit first.

Breakeven Percentage Chart

I’ve created a chart below with a few examples so you can see the pattern of Reward/Risk Ratios & Breakeven Percentages.

When reward = risk, you only need to be right half the time (50%) to breakeven (beige). This is common sense.

If reward < risk, you have to be right more often (light blue).

If reward > risk, you can be wrong more often (purple).

What Does This Mean?

In my next blog post I’ll be sharing more of what this means for making online forex trading decisions. For now, just think about the Reward/Risk ratio, and don’t make a trade without knowing what it is!

Posted in Technical Analysis

126 Pip Pivot Point Profit

Pivot Points are an incredibly useful online forex trading technique. A recent trade of mine yielded a 126 pip profit in only 50 hours, which grew my entire trading account by 10.04%, which is exceptional for 20-30 minutes worth of work!

Why Forex Pivot Points?

Pivot Points are one of the most commonly used methods of online forex trading. The pivot point takes the High, Low, & Close prices from yesterday and generates Support & Resistance target prices.

Forex Pivot Points are uncannily accurate when combined with the right directional entry strategy. In the example below you’ll notice the predictive nature of forex pivot points for online forex trading success.

Spotting Trend Direction

In the Forex Sailing course I explain the fibonacci wave theory for determining trend direction. In a recent post, I also explained EMA/MACD divergence for signaling key trend movements.

While the trade below could have been an excellent Sail, it also would have required a stop of several hundred pips, which would have violated the money management system followed by the LIVE Forex Training class.

For this reason, I used pivot points to capture a shorter term profit of 126 pips in 2 days. Here’s how the trade unfolded.

EUR/USD Daily Trend Moves Down

From Forex Sailing we had a forex umbrella handle form after breaking a longer uptrend on the daily chart for the EUR/USD. I’ve labeled the fibonacci wave with the key points of I, II, II on the daily chart below:

In the chart shot above notice how there is good separation of the EMAs and how the MACD is increasingly negative as prices make new lows. This is a strong signal that prices will continue moving down for several days. We also moved past II, which means we should move to a lower low to reach IV.

To confirm this direction I also looked at smaller timeframes, which lined up nicely as well to indicate downward movement. As indicated on this 4 hour chart below:

In this chart we also had nice EMA separation, and an increasingly negative MACD. While there was a fair amount of divergence, the trend direction was still downward. But a large enough stop was needed to make sure the divergence didn’t retrace too much before the trend continued.

The 15 min chart below also indicated a downward moving trend:

As newer lows were made we maintained a widening of the EMA, we also maintained strong negative MACD divergence as new lows were made.

Downtrend Confirmed -> Let’s Trade

With a downtrend confirmed on these timeframes, it was time to look at our pivot points for good stop/limit prices. For the entry price I used a price close to the pivot and found a EMA/MACD divergence on a 5 min chart.

Initially I set the following trade parameters:

Entry: 1.3397 short

Stop: 1.3547

Limit: 1.3274

This gave us a good reward/risk ratio of 82%. We were below the pivot price of 1.3453, so the stop was less likely to be hit than our limit. This initial trade would have netted 123 pips profit.

24 Hour Adjustment

The next day the pivot points were recalculated because the trade was still in progress.

Entry: 1.3397 short

Stop: 1.3411

Limit: 1.3271

This reduced our risk to only 14 pips, and increased our profit 3 pips from 123 to 126 pips. The next day the trade was exited for a profit. Here’s the picture of what happened during the life of this trade on the hourly chart:

You can see the entry price of 1.3397 (red line). You can see the price at which the limit was hit 50 hours later at 1.3271 (blue line). The stop isn’t included on this chart because that price was never approached

As you can see the price consolidated a bit, but moved downward overall. We managed to get in near the top of this price movement and captured a 126 pip profit in only 50 hours.

Posted in Technical Analysis