[Trading Forex] The Forex Profit System.pdf

The Forex Profit System:

‘How to Earn $50 to $500 a day Forex Trading from the

Comfort of Your Own Home!’

OVERVIEW

Dear Friend,

Thanks for your interest in my Forex Profit System. The Forex Profit System’s

purpose is to empower beginner and intermediate Forex Traders to learn how to

trade the currency markets profitably, using the free tools and analysis available

on the Internet.

The goal is to earn $50 to $500 per trade and minimize losses on losing trades

using 2 technical indicators, which I will explain later on in this report. The

potential to profit is there for those who trade this system. The great thing about

Forex trading is that you can test my system for FREE on a demo account using

virtual money, before you risk one penny on actual trades.

I trust that this simple system will kick start potential currency traders around the

world, and aid you in learning more about the wonderful world of Foreign

Exchange trading.

Let’s begin by learning more about what Forex is and what the benefits of

Currency Trading are:

WHAT IS FOREX

The Foreign Exchange, also referred to as the "Forex" or "Spot FX" market, is the

largest financial market in the world, with over $1.2 trillion changing hands every

single day. If you compare that to the $25 billion a day volume that the New York

Stock Exchange trades, you see how giant the Foreign Exchange really is. In

fact it is three times larger than all of the US Equity and Treasury markets

combined!

What is traded on the Foreign Exchange? The answer is money. Forex trading

is where the currency of one nation is traded for that of another. Therefore, Forex

trading is always traded in pairs. The most commonly traded currency pairs are

traded against the US Dollar (USD). They are called ‘the majors'. The major

currency pairs are the Euro Dollar (EUR/USD); the British Pound (GBP/USD); the

Japanese Yen (USD/JPY); and the Swiss Franc (USD/CHF). Because there is

not a central exchange for the Forex market, these pairs and their crosses are

traded over the telephone and online through a global network of banks,

multinational corporations, importers and exporters, brokers and currency

traders.

Traditionally, currency trading has been a 'professionals only' market available

exclusively to banks and large institutions, however, because of the rise of the

new E-economy, online Forex trading firms are now able to offer trading

accounts to 'retail' traders like you and I. Now almost anyone with a computer

and an Internet connection can trade currencies just like the world's largest

banks do. There are now over 6 million trading accounts worldwide up from 1.7

million in 1997.

BENEFITS OF FOREX TRADING

There are many benefits and advantages to trading Forex. Here are just a few

reasons why so many people are choosing this market as a business

opportunity:

1.LEVERAGE: In Forex trading, a small margin deposit can control a much

larger total contract value. Leverage gives the trader the ability to make

extraordinary profits and at the same time keep risk capital to a minimum. Some

Forex firms offer 200 to 1 leverage, which means that a $50 dollar margin deposit

would enable a trader to buy or sell $10,000 worth of currencies. Similarly, with

$500 dollars, one could trade with $100,000 dollars and so on.

2.LIQUIDITY: Because the Forex Market is so large, it is also extremely liquid.

This means that with a click of a mouse you can instantaneously buy and sell at

will. You are never 'stuck' in a trade. You can even set the online trading

platform to automatically close your position at your desired profit level (limit

order), and/or close a trade if a trade is going against you (stop order).

3.PROFIT IN BOTH 'RISING' AND 'FALLING' MARKETS: On the stock

markets, you can only make money if shares are rising, but in economic

recession and falling 'bear' markets, there is little chance of making big money.

Forex is different. One of the most exciting advantages of FX trading is the ability

to generate profits whether a currency pair is 'up' or 'down'. A trader can profit by

taking a 'long' position, (buying the currency pair at one price and selling it later

at a higher price), or a 'short' position, (selling the currency pair and buying it

back at a lower price). For example, if you think the US dollar will increase in

value vs. the Japanese Yen then you will buy Dollars and sell Yen (go long). If

you think the Yen will increase in value against the Dollar then you will sell

Dollars and buy yen (go short). As long as the trader picks the right direction, a

potential for profit always exists.

4. 24HRS: From Sunday evening to Friday Afternoon EST the Forex market

never sleeps. This is very desirable for those who want to trade on a part-time

basis, because you can choose when you want to trade--morning, noon or night.

5. FREE 'DEMO' ACCOUNTS, NEWS, CHARTS AND ANALYSIS: Most Online

Forex firms offer free 'Demo' accounts to practice trading, along with breaking

Forex news and charting services. These are very valuable resources for traders

who would like to hone their trading skills with 'virtual' money before opening a

live trading account.

6.'MINI' TRADING: One might think that getting started as a currency trader

would cost a lot of money. The fact is, it doesn't. Online Forex Firms now offer

'mini' trading accounts with a minimum account deposit of only $200-$500 with

no commission trading. This makes Forex much more accessible to the average

individual, without large, start-up capital.

Forex Profit System Foundations:

Before we begin looking at the specifics of the FPS and how it works, let’s look at

4 building blocks that I believe to be foundations to the Forex Profit System.

Foundation #1: I highly recommend that you follow 1 or maybe 2 major

currency pairs.

It gets far too complicated to keep tabs on all four. I also recommend that

traders choose one of the majors because the spread is the best and they are

the most liquid. I personally follow only USD/CHF because it moves the most

every day.

Foundation #2: Follow and understand the daily Forex News and

Analysis of the professional currency analysts.

Even though this system is based solely on technical analysis of charts, it is

important to get a birds-eye view of the currency markets and the news that

affects the prices. It is also important that you know and understand what the

key technical ‘support’ and ‘resistance’ levels are in the currency pair that you

want to trade. Support is a predicted level to buy (where currency pair should

move up on the charts), resistance is a predicted level to sell (where the

currency pair should move down on the charts).

Fortunately, all the best Forex news and analysis is offered free on the

Internet. Here is what you should do first:

*While you are reading the daily news and technical analysis, write

down on a piece of paper what direction the analysts are saying

about the major currency pair you are following and the key support

and resistance levels for the day.

A. Go to www.forexnews.com and you will find 24hr news and analysis on

the spot FX markets. The site will give you the big picture of how the

economic calendar and central banks affect the currency markets. A great

resource.

B. Next visit Commerzbank’s Daily Market Technicals here:

www.commerzbank.com/upload/dailye.pdf

This daily commentary gives you supports and resistances and predicted

direction of the major currency pairs and crosses. One of the best.

C. Then go to www.fxstreet.com and click on the ‘Top Forex Reports’. Here

there is a wonderful listing of all the major daily currency analysis and

forecasts with support and resistance and direction forecasts.

D. Click on www.currencypro.com and go to ‘Today’s Market Research’ and

there you will find more excellent analysis on the Major Currency pairs.

Another great Forex Portal.

Foundation #3: Only get into a trade when the FPS technical

indicators say when. Always trade with stop losses!

It is important when you are trading Forex, to be disciplined and to stick to

a plan. Don’t just trade your ‘gut’ feeling. Use the technical indicators

outlined and always enter in stop losses on every trade.

Foundation #4: Practice makes perfect.

As they say, there is no substitute for hard work and diligence. Practice

this system on a demo account and pretend the virtual money is your own

real money. Do not open a live trading account until you are profitable

trading on a demo account. Stick to the plan and you can be successful.

Forex Profit System:

Step 1: Prepare your charts

The Forex Profit System uses 2 technical indicators to show you when you

should enter and exit a trade. These are called the Parabolic SAR (read more

about the PAR SAR here:) www.equis.com/Education/TAAZ/?page=87 and the

Exponential Moving Average 10, 25 and 50 . (Read more about multiple EMA’s:

here:) www.incrediblecharts.com/technical/moving_averages_three.htm

Now if you are new to Forex trading, you will have no idea what I just mentioned.

Don’t worry, I will teach you how to use them.

A. For FREE charts and analysis go to www.gcitrading.com and click on

the resources tab, then on the ‘GCI live forex charts’ link.

B. A java-charting window of EUR/USD should pop up. Now you can add

studies to your chart.

C. Click on the grid button on the top of the chart to take the grid on the

charting screen off (optional).

D. At the top, click on instrument and change the chart to USD/CHF. This

is my favorite currency pair to trade because it swings up and down the

most. You can choose any major pair you like though.

E. Change the time of the Chart to 60 min (top left corner)

F. Click on Studies and click on Parabolic SAR. Click on display when it

shows you the .02 and .2 acceleration factor and constant.

G. Click on Studies and Moving Averages and then click NEW.

H. Click on Exponential, then enter 10 in the Period box, then OK.

I. Click on NEW again, click exponential, then enter 25 in the Period box,

then OK.

J. Click on NEW again, click exponential then enter 50 in the Period box

then OK. Click on display and you should have the Parabolic SAR and

the three EMA’s 10, 25 and 50 in different colors on your charts.

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