5 forex strategies that can save your trading life

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Intro

Technical Analysis

5 FOREX STRATEGIES The Alligator

RSI - Relative Strength Indicator

Triangles

Channels

Education

Making a Trading System

Closing

TABLE OF CONTENTS

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With its high volatility, deep liquidity, and sensitive nature, the Forex market is among the most rewarding and dangerous markets an investor can participate in In the company’s opinion, the forex market

is growing in popularity Every day, more investors are placing that first trade The one attribute that separates the traders that burn their account in a short time and the traders that prosper is knowledge – knowledge of strategies, money management principles, technical analysis, and fundamental analysis are key to traders who hope to see a return

on investment.

What this guide aims to do is arm you with the knowledge you need to confidentially trade on the markets.

INTRODUCTION

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All of the strategies in this guide abide by

rules of technical analysis Technical analysis

is a method of estimating future price action

by studying past price movement The three

golden principles to abide by when dealing

with technical analysis are:

• Price is everything

• Price moves in trends

• History repeats itself

Technical analysts use indicators to determine

which direction they believe the market

will move Indicators take past market

information and apply complex algorithms to

that information to digest lines on charts that

can be simple to read, if you know what you’re

looking for

TECHNICAL ANALYSIS

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HEAD RIGHT SHOULDER LEFT SHOULDER

NECKLINE

BREAKOUT

PENNANT

BREAKOUT

FLAG

The Alligator Indicator is comprised of three Moving

Average Indicators Each line of the indicator

represents a different part of the hypothetical

Alligator’s heads A blue line (which is a 13 period

Moving Average moved 8 bars in the future)

represents the Alligator’s Jaw, a red line (which is

an 8 period Moving Average moved 5 bars into the

future) represents the Alligator’s Teeth, and a green

line (which is a 5 period Moving Average moved 3

bars into the future) represents the Alligator’s Lips

ALLIGATOR INDICATOR

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The Alligator

When the lines of the Alligator Indicator are jumbled together, the Alligator is sleeping When the Alligator is sleeping, traders can assume that the market

is currently in a range and should avoid trading

When the Alligator is awake, it stretches its mouth open in the direction of the current trend When the Lips, Teeth, and Jaws are aligned in a certain direction, the bias is to open a position in that direction

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The Relative Strength Indicator (or simply RSI) is a momentum indicator

that determines whether a currency pair is overbought or oversold by

comparing recent market gains to recent losses By knowing this vital

information, traders can determine if a trend has ended or reversed

RELATIVE STRENGTH INDICATOR (RSI)

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70

30

RSI

The Relative Strength Indicator measures current market momentum from

a scale of 0 to 100 Two lines appear on the RSI indicator, one at the 30

line, and one at the 70 line When the RSI line moves up to the 70 level,

the currency pair is considered overbought If the line is approaching 30,

the currency pair is considered oversold

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Support and resistance lines are psychological levels that form on

the market The lines themselves are invisible, and when traders trace

them, they tend to be only approximate levels A support line refers to a

psychological level that supports price by keeping it afloat from a certain

level A resistance line is a psychological level from which price can’t push

through, causing price to sink lower off said level Price will do one of two

things when it reaches a support or resistance line; bounce off it or break

through it

SUPPORT AND RESISTANCE

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There are instances where price converges to a single

point When this happens, traders can trace their

support and resistance lines to draw triangles Since

price is converging, there is a 100% chance that price

will penetrate the support line or resistance line When

triangles form on the market, traders tend to wait until

a support/resistance line is penetrated, and then trade

the breakout

TRIANGLES

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SYMMETRICAL

ASCENDING

DESCENDING

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There’s an old cliché that goes The Trend is Your

Friend When traders spot trends, they tend to

open positions in the direction of said trend Since

channels indicate current market trends, traders

have a bias to base their trades off of

CHANNELS

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Don’t forget that channels are just support and resistance lines Every time price bounces off these support and resistance lines, the support and resistance that they offer becomes weaker When price penetrates one of these lines, it initiates a time of excessive buying or selling Opening a position after resistance is broken is called trading a breakout

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It’s vital that you ask yourself the following questions before you begin trading:

• Which currency pair do you plan on trading?

• Do you plan on holding positions for minutes, hours, days, or longer?

• How much money do you plan on investing in every trader?

• Do you have a set risk-to-reward ratio?

• How far away from the opening price do you plan on setting your limit and profit orders?

• At what time during the day or evening do you plan on trading?

• Will you use outside aid, such as the technical analysis offered by Forex Club?

• What timeframes will you look at?

• What analytical rules will you use prior to opening positions?

Need help making your trading system? Call our forex specialists today at 1 (800) 881-3809

MAKING A TRADING SYSTEM

We’re here

to help you,

Every step

of the way.

The successful trader isn’t one who places back

to back winning trades The successful trader is

he who learns how to manage losses

If you have any questions, we urge you

to call one of our Forex Specialists at:

1 (800) 881-3809

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Forex Trading (off-exchange foreign currency trading) entails significant risks Please read this section very carefully There is no guarantee that the strategies and formulas mentioned in this booklet will work under all market conditions Trading foreign currencies on a margin carries a high level of risk, and may not be suitable for all investors The high degree of leverage can work against you as well as for you Before deciding to trade you should carefully consider your investment objectives, level of experience, and appetite for risk