forex master level

36
PRESENTS Forex Master Level Trading Like A Master = 174.38% In One Month Live Trading Wesley Govender Copyright © 2013 by Old Tree Publishing CC, KZN, ZA Reproduction or translation of any part of this work by any means, electronic or mechanical, including photocopying, beyond that permitted by the copyright law, without permission of the publisher, is unlawful. Trademarks: Old Tree Publishing CC, Forex Profit Matrix

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Hi everyone! In this report, I want to introduce you to an excellent trading system that conquered the Surefire Trading Challenge version 2, in which it gained 174.38% in one month of live trading during the competition. It’s called the Forex Master Level trading system. This system is definitely one of my favorites from SFTC. It’s suitable for any session, so whatever free time you have to trade, you can use this system. Also, you can trade it on any currency pair, although GBPJPY is the currency pair of choice because of its volatility. To trade this system, we need to use the Daily timeframes for the initial analysis and move down to the 4 Hour to trade. The indicators and tools we use to trade for the system are found in your MetaTrader 4. Please find the chart template for the system on the designated download page in the member’s area. In this report, we’ll go over the different indicators and tools that are used for the system, discuss the trading techniques we need to apply, then talk about the trading rules and move on to the trading examples.

TRANSCRIPT

Page 1: Forex Master Level

PRESENTS

Forex Master Level Trading Like A Master = 174.38% In One Month Live Trading

Wesley Govender

Copyright © 2013 by Old Tree Publishing CC, KZN, ZA

Reproduction or translation of any part of this work by any means, electronic or mechanical, including photocopying, beyond that

permitted by the copyright law, without permission of the publisher, is unlawful.

Trademarks: Old Tree Publishing CC, Forex Profit Matrix

Page 2: Forex Master Level

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RISK DISCLOSURE STATEMENT / DISCLAIMER AGREEMENT

Trading any financial market involves risk. This report and all and any of its contents are neither a solicitation nor an offer to Buy/Sell any financial market.

The contents of this material are for general information and educational purposes only (contents shall also mean the website www.forexprofitmatrix.com or any website the content is hosted on, and any email correspondence or

newsletters or postings related to such website). Every effort has been made to accurately represent this product and its potential. There is no guarantee that you will earn any money using the techniques, ideas and software in these materials. Examples in these materials are not to be interpreted as a promise or guarantee of earnings. Earning potential is entirely dependent on the person using our product, ideas and techniques. We do not purport this to be a “get rich scheme.”

Although every attempt has been made to assure accuracy, we do not give any express or implied warranty as to its accuracy. We do not accept any liability for error or omission. Examples are provided for illustrative purposes only and should not be construed as investment advice or strategy.

No representation is being made that any account or trader will or is likely to achieve profits or losses similar to those

discussed in this report or anywhere on www.forexprofitmatrix.com. Past performance is not indicative of future

results.

By purchasing any content, subscribing to our mailing list or using the website or contents of the website or materials provided herewith, you will be deemed to have accepted these terms and conditions in full as appear also on our site, as do our full earnings disclaimer and privacy policy and CFTC disclaimer and rule 4.41 to be read herewith. So too, all the materials contained within this course, including this manual, whether they appear on our domain(s) or are in physical form, are protected by copyright. "Warning: The unauthorized reproduction or distribution of this copyrighted work is illegal. Criminal copyright infringement, including infringement without monetary gain, is investigated by the authorities and is punishable with imprisonment and a fine." We reserve all our rights in this regard.

Old Tree Publishing CC, in association with www.forexprofitmatrix.com, the website, content, and its representatives

do not and cannot give investment advice or invite customers or readers to engage in investments through this course or any part of it.

The information provided in this content is not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject us to any registration requirement within such jurisdiction or country.

Hypothetical performance results have many inherent limitations, some of which are mentioned below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and actual results subsequently achieved by any particular trading program and method.

One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk and no hypothetical trading record can completely account for the impact of financial risk in actual trading.

For example, the ability to withstand losses or to adhere to a particular trading program or system in spite of the trading losses are material points that can also adversely affect trading results. There are numerous other factors related to the market in general or to the implementation of any specific trading program, which cannot be fully accounted for in the preparation of hypothetical performance results. All of which can adversely affect actual trading results.

We reserve the right to change these terms and conditions without notice. You can check for updates to this disclaimer at any time by visiting www.forexprofitmatrix.com.

Governing law: this policy and the use of any of this material and or course, provided in any form, and any content on the website are governed by the laws of the Republic of South Africa. Further details on this are found under the Terms and Conditions on our site. Please ensure you read and agree with all Terms and Conditions as set out on our site before using any of the materials. Your use and reliance on the materials is based on your acceptance of such Terms and Conditions and policies as appear on the site.

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TABLE OF CONTENTS

RISK DISCLOSURE STATEMENT / DISCLAIMER AGREEMENT................................. 2

I. Introduction .................................................................................................................. 4

II. Indicators & Tools........................................................................................................ 5

1. Moving Averages ................................................................................................... 6

2. Relative Strength Index ......................................................................................... 8

3. Fractals & Trend Lines .......................................................................................... 9

4. Trendlines .............................................................................................................. 9

5. Support & Resistance Lines ................................................................................ 11

6. Candlestick Patterns............................................................................................ 12

7. 161.8% Fibonacci Retracement .......................................................................... 14

III. Buy Trade Rules....................................................................................................... 16

IV. Sell Trade Rules ...................................................................................................... 20

V. Example Trades ........................................................................................................ 24

1. GBPUSD Long Trade .......................................................................................... 24

2. EURUSD Long Trade .......................................................................................... 27

3. AUDUSD Short Trade ......................................................................................... 30

4. USDJPY Short Trade .......................................................................................... 33

VI. Important Notes ....................................................................................................... 36

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Forex Master Level

I. Introduction

Hi everyone!

In this report, I want to introduce you to an excellent trading system that conquered the

Surefire Trading Challenge version 2, in which it gained 174.38% in one month of live

trading during the competition. It’s called the Forex Master Level trading system.

This system is definitely one of my favorites from SFTC. It’s suitable for any session, so

whatever free time you have to trade, you can use this system. Also, you can trade it on

any currency pair, although GBPJPY is the currency pair of choice because of its

volatility. To trade this system, we need to use the Daily timeframes for the initial

analysis and move down to the 4 Hour to trade.

The indicators and tools we use to trade for the system are found in your MetaTrader 4.

Please find the chart template for the system on the designated download page in the

member’s area.

In this report, we’ll go over the different indicators and tools that are used for the

system, discuss the trading techniques we need to apply, then talk about the trading

rules and move on to the trading examples.

Let’s get started…

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II. Indicators & Tools

The system uses the following indicators and tools: EMA 5; SMA 5, SMA 21, RSI 5,

Fractals and Trendlines. Below is what our basic chart template looks like. Over it, we’ll

need to add support and resistance lines, and in some cases, trendlines and a

Fibonacci retracement, but more on that later.

To apply the chart template, download the file and save it into your templates folder.

Open your MT4 platform, click on the Templates icon and select the “FXMasterLevel”

template.

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1. Moving Averages

The Moving Average is the most common indicator used to determine the trend of the

market. There are four different types of moving averages, but for this system, we’ll only

concentrate on the exponential moving average (EMA 5) and some simple moving

averages (SMA 5, 21, and 233).

The simple moving average (SMA) is basically the average of a set of prices or periods.

Each period is given equal weight in the calculation. The exponential moving average

(EMA) also computes the average of a set of prices or periods, but it gives more weight

or importance to more recent data. Because of this, it is more reactive to recent price

movements. Notice that the EMA 5 is closer to the candles than the SMA 5?

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Basically, price is considered bullish if it is above a moving average and bearish if it’s

below the moving average. The biggest advantage of using more than one moving

average is that it provides a stronger indication of the trend. Price is bullish when it is

above a faster moving average that has crossed above a slower moving average.

To the left below is a perfect example of a bullish or uptrend. You can see that the

moving averages are in the following order: 5 period EMA is above the 5 period SMA,

which is also above the 21 period SMA and the 233 period SMA.

A bearish trend would follow the exact opposite. The image to the right above shows a

textbook example of a bearish or downtrend. You can see that the 233 period SMA is at

the top, followed by the 21 period SMA, then the 5 period SMA and at the bottom is the

5 period EMA.

There’s one more moving average that we need to use with this system, a 21 period

SMA applied on another indicator called the Relative Strength Index or RSI. We’ll talk

about that in the next section.

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2. Relative Strength Index

The Relative Strength Index or RSI is a momentum oscillator, which measures the

speed and change of price movement and plotting that on a 0 to 100 scale.

There are many ways in which to use the RSI, but for this system, we will apply a 21

period SMA on top of it so we can have a better idea of the trend. On the image below,

you can see that as price moves down, the RSI 5 crosses under the SMA 21. This

indicates a downtrend.

Next, the RSI 5 crosses above the SMA 21 as the price moves up to form an uptrend.

You may notice that we used the same basic principle in identifying the trend on the

moving average. The RSI 5 reacts quickly to price changes unlike the SMA 21 which is

slower because it is based on the value of RSI for 21 periods or candles. When RSI 5

crosses above SMA 21, it means that recent prices are much higher than usual, so we

have an uptrend. The opposite is true for a downtrend.

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3. Fractals & Trend Lines

The Fractals indicator is to be used

on the 4 Hour chart. A Fractal is a

type of pattern used in technical

analysis to predict a reversal in the

current trend. Fractal patterns consist

of five bars.

An Up Fractal occurs when the

highest bar is located in the middle of

the pattern and two bars with lower

highs are positioned on both sides.

A Down Fractal occurs when the

lowest bar is located in the middle of

the pattern and two bars with higher

lows are positioned on both sides.

4. Trendlines

We’ll use trendlines to highlight the trend. A trendline is defined as a straight line that

starts at the beginning of the trend and stops at the end of the trend.

We’ll draw our trend lines at significant Fractal levels that appear on the most recent

bars on the 4 Hour chart.

Let’s take a look at some examples on the next page.

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To draw a trendline, click on the Trendline tool on your MT4 platform…

For an uptrend, start by

clicking on the starting

point of the trend (A)

under the price, and then

drag your mouse towards

another significant fractal

point (B).

For a downtrend, start by

clicking on the starting

point of the trend (C)

above the price, and then

drag your mouse towards

another significant fractal

point (D).

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5. Support & Resistance Lines

These support and resistance lines are drawn on the Daily chart, and they help

determine the re-entry points as well as stop loss or exit points for our trades.

To draw your support and resistance lines, go to the Daily Chart and click on the

“Horizontal Line” Tool on your platform…

Next, place your line by clicking at the highest price of the previous candle (A). Place

another line at the lowest price (B) of the previous candle. The image to the right shows

how the support and resistance lines look like when you go back to the 4 Hour chart.

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Basically, we can reenter the market if price touches the support or resistance levels

only if the other rules for entering a trade are still valid.

Here’s how they are used as stop loss or exit levels. For long trades, set the stop loss at

the previous day’s low, or exit manually if price touches that level. For short trades, set

the stop loss at the previous day’s high, or exit manually if price touches that level.

If the support and resistance lines remain untouched or unbroken by price in the next

few days, they will still be considered as “valid”.

6. Candlestick Patterns

The system also utilizes basic candlestick patterns, which are: Bullish/Bearish Engulfing

Pattern, Hammer, and Inverted Hammer candlestick patterns. These can be used as

additional confirmations at one’s discretion and are not essential to entering a trade.

a. Bullish engulfing pattern for long trades

The Bullish engulfing pattern has variations in its formations which can be

considered. The significant part of engulfing patterns is the nature of their

real bodies. In bullish engulfing patterns, the real body of the bullish candle

must engulf the real body of the bearish candlestick preceding it.

Their shadows are not important. Sometimes in a fast moving market the

bullish candle can open inside the real body of the bearish candle creating

about a 7-10 pip gap and close above the open of the bearish candle. It can

still be considered as a bullish engulfing pattern because of the gap.

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b. Bearish engulfing pattern for short trades

The Bearish engulfing pattern is the opposite of the Bullish engulfing pattern.

In Bearish engulfing patterns, the real body of the Bearish candle must

engulf the real body of the Bullish candlestick preceding it.

Again, their shadows are not important.

c. Inverted Hammer candlestick pattern

The inverted Hammer most often appears as a bullish inverted candlestick and also

appears in a market that opens at or near its low, creating a candle with a small real

body.

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7. 161.8% Fibonacci Retracement

This is an optional tool that can be used to occasionally confirm the point of exit,

specifically, as a take profit target on the 4 Hour chart. Sometimes you will find that you

cannot use the high or low of the previous day as price may have already passed these

levels. In these scenarios, you can use the 161.8% Fibonacci level as your target

instead. In this system, the Fibonacci retracement is not used in the conventional

manner. It should be drawn from the point where the 5 EMA and 5 SMA crossed to the

highest high or lowest low of the previous day.

To draw the Fibonacci retracement, click on the Fibonacci Retracement tool on your

platform…

For a buy trade, start from the point where the EMA 5 and the SMA 5 crossed and end

at the previous day’s low, which is indicated by a red horizontal line.

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For a downtrend, start at the point where the EMA 5 and the SMA 5 crossed and end at

the previous day’s high.

You have an option to remove the unused levels of the Fibonacci retracement to keep

your chart clutter free. Just right click on it, go to “Fibo properties…”, and under the

“Fibo Levels” tab, select the levels you want to remove and click on the “Delete” button.

So that’s it for the indicators!

In the next section, we’ll take a look at the trading rules of the Forex Master Level.

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III. Buy Trade Rules

Follow the rules below for placing long trades. 1. On the Daily chart, check that the price is in an uptrend using the following criteria:

a. The 5 EMA (BLUE line) must be above the 5 SMA (RED line) and the 21 SMA

(GREEN line); The 5 EMA is the most important moving average in this system. b. The RSI 5 is above the 21 SMA. c. The trend is up if both conditions above are met.

2. If the trend is up, determine the previous day’s High and Low and place horizontal lines to mark them on the daily chart. These will act as support (previous day’s Low) and resistance levels (previous day’s High).

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3. Determine the entry on the 4 Hour chart using the criteria below. The conditions for one of the following options must be met.

Option 1: Aggressive Approach

a. The EMA 5 (BLUE Line) crosses above the SMA 5 (RED Line). b. The RSI 5 crosses/has crossed above the 21 SMA (GREEN Line) from

below. OR Option 2: Conservative Approach

a. The EMA 5 (BLUE Line) crosses above the SMA 21 (GREEN line). b. The RSI 5 crosses/has crossed above the 21 SMA (GREEN Line) from

below. This condition is not essential.

NOTE: The conservative approach is the preferred strategy because the signals are much more reliable. There must be an RSI/SMA crossover together with either a 5 EMA/5 SMA or a 5 EMA/21 SMA crossover for a valid signal. Below, you can find examples of the Aggressive and Conservative Approaches to finding trading signals. Take note that this needs to be done on the 4 Hour chart.

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4. Look for candlestick patterns for additional confirmation. This is not a required step and candlestick patterns don’t always appear, but if they do, they can help confirm the signals identified above. Follow the guidelines below: a. For a buy trade confirmation, either a Bullish Engulfing pattern or a Hammer

pattern may appear before the EMA 5 (BLUE Line) crosses the SMA 5 (RED Line) or the SMA 21 (GREEN Line).

b. Look for candlestick patterns on the chart right before the EMA/SMA crossover occurs. If the candlestick pattern doesn’t occur, just follow the crossover and look to enter when the crossover occurs.

5. Enter a buy trade with a market order at the open of the candle following the EMA 5 crossover or the RSI 5 crossover, whichever occurs last.

6. Set the take profit level at the resistance line or at the 21 SMA. You may use the Fractals on the 4 Hour chart to draw trend lines that can be used as a target profit level or as a re-entry point.

7. You have the option to set the stop loss at the nearest support level. The support and resistance lines are determined by the previous day’s low and high respectively.

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Below (left), you can see that the buy trade was placed at the close of the candle where the EMA 5 and SMA5 crossed over, the RSI also crossed over the SMA 21 simultaneously. The stop loss was set at the previous day’s low (41 pips) and the take profit was set at the previous day’s high (64 pips). Not long after (right), price hit the take profit level and the trade was closed with 64 pips profit.

8. If you opted not to set a stop loss level, you may exit the trade when one of the

following conditions are met: a. The EMA 5 (BLUE Line) crosses back below the SMA 5 (RED Line). b. RSI 5 crosses below the SMA 21 (GREEN Line). c. When price stalls at major resistance, trend line, pivot point, Fibonacci projection

target of 161.8 or at the SMA 21 (GREEN Line). d. When a bearish engulfing pattern or inverted hammer candlestick pattern forms

before the EMA 5 (BLUE Line) crosses below the SMA 5 (RED Line). e. The SMA 233 (WHITE Line) may also be used as an exit point for the trade when

price touches it.

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IV. Sell Trade Rules

Here are the rules to follow for placing short trades. 1. On the Daily chart, check that the price is in downtrend using the following criteria:

a. The 5 EMA (BLUE line) must be below the 5 SMA (RED line) and the 21 SMA

(GREEN line); The 5 EMA is the most important moving average in this system. b. The RSI 5 is below the 21 SMA. c. The trend is down if both conditions above are met.

2. If the trend is down, determine the previous day’s High and Low and place horizontal lines to mark them on the daily chart. These are the support and resistance levels.

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3. Determine the entry on the 4 Hour chart using the criteria below. The conditions for one of the following options must be met.

Option 1: Aggressive Approach

a. The EMA 5 (BLUE Line) crosses under the SMA 5 (RED Line). b. The RSI 5 crosses/has crossed under the moving average (SMA 21-The

GREEN Line) from above. OR Option 2: Conservative Approach

a. The EMA 5 (BLUE Line) crosses below the SMA 21 (GREEN line). b. The RSI 5 crosses/has crossed below the SMA 21 (GREEN Line) from

above. This condition is not essential.

NOTE: The conservative approach is the preferred strategy because the signals are much more reliable. There must be an RSI/SMA crossover together with either a 5 EMA/5 SMA or a 5 EMA/21 SMA crossover for a valid signal. The example below shows a conservative approach. The aggressive approach is not applicable in this scenario because the RSI has not yet crossed over when the 5 EMA crossed under the 5 SMA. You can see that the RSI 5 has just crossed below the SMA 21 at the current candle.

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4. Look for candlestick patterns for additional confirmation. This is not a required step

and candlestick patterns don’t always appear, but if they do, they can help confirm

the signals identified above. Follow the guidelines below:

a. For a sell trade confirmation, either a Bearish Engulfing pattern or a Hammer

pattern may appear before the EMA 5 (BLUE Line) crosses the SMA 5 (RED

Line) or the SMA 21 (GREEN Line).

b. Look for candlestick patterns on the chart right before the EMA/SMA crossover

occurs. If the candlestick pattern doesn’t occur, just follow the crossover and look

to enter when the crossover occurs.

5. Enter a sell trade with a market order at the open of the candle following the EMA 5

crossover or the RSI 5 crossover, whichever occurs last.

6. Set the take profit level at the support line or at the 21 SMA. You may use the

Fractals levels on the 4 Hour chart to draw trend lines that can be used as a target

profit level or as a re-entry point.

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7. You have the option to set the stop loss at the nearest resistance level. The support

and resistance lines are determined by the previous day’s low and high respectively.

8. If you opted not to set a stop loss level, you may exit the trade when one of the

following conditions are met:

a. The EMA 5 (BLUE Line) crosses back above the SMA 5 (RED Line).

b. RSI 5 crosses above the SMA 21 (GREEN Line).

c. When price stalls at major resistance, trend line, pivot point, Fibonacci projection

target of 161.8 or at the SMA 21 (GREEN Line).

d. When a bullish engulfing pattern or inverted hammer candlestick pattern forms

before the EMA 5 (BLUE Line) crosses below the SMA 5 (RED Line).

e. The SMA 233 (WHITE Line) may also be used as an exit point for the trade when

price touches it.

Here are some examples of exit points. Using the aggressive approach, the sell trade is

entered at the close of the candle where the EMA 5 crossed under the SMA 5. The stop

loss is set at the previous day’s high. The trade can be closed by setting the stop loss at

the previous day’s low or closed manually when the SMA 5 crossed below the EMA 5 or

when the RSI 5 crossed above the SMA 21.

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V. Example Trades

1. GBPUSD Long Trade

Below you can see the GBPUSD Daily chart and the current candle has just opened.

The first step is to check that price is in an uptrend. As you can see, the 5 EMA (BLUE

line) is above the 5 SMA (RED line) and the 21 SMA (GREEN line). You can also see

that the RSI 5 is above the 21 SMA. So, we have an uptrend.

Next, we’ll place horizontal lines on the previous day’s high and low prices. These are

our support (previous day’s Low) and resistance levels (previous day’s High).

We’re now ready to go to the 4 Hour chart.

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On the 4 Hour chart, we’ll look for our buy trade signals. The EMA 5 (BLUE Line) has

just crossed above the SMA 5 (BLUE line). The RSI 5 has also crossed above the 21

SMA (GREEN Line) from below.

Our entry will be at the close of the current candle on the 4 Hour chart (1.5224) and the

stop loss will be along the SMA 21 or the previous day’s low (1.5152).

There are many options to exit the trade, let’s see how our trade played out.

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On the image below, you can see that the price went up to touch the SMA 233 (1.5306),

and this is our first option to exit the trade. Price continued to climb until the EMA 5

crossed back under the SMA 5, and simultaneously, the RSI 5 crossed under SMA 21.

This is our second option to exit the trade.

Whichever option we take, we’d be out of the trade in profit of 80 pips (first exit) or 120

pips (second exit).

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2. EURUSD Long Trade

Here’s another buy trade example, this time on the EURUSD. The current candle has

just opened on the Daily chart. The 5 EMA (BLUE line) is above the 5 SMA (RED line)

and the 21 SMA (GREEN line). The SMA 233 is found at the bottom of the other moving

averages, so we have a very strong uptrend here.

Next, we’ll place horizontal lines on the previous day’s high and low prices, which serve

as our support and resistance levels.

Let’s now shift to the 4 Hour chart.

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On the 4 Hour chart, we’ll look for our buy trade signals. The EMA 5 (BLUE Line) has

already crossed above the SMA 5 (BLUE line). The RSI 5 has also crossed above the

21 SMA (GREEN Line). These are our signals to enter a buy trade.

Our entry will be at the close of the current candle on the 4 Hour chart (1.3346) and the

stop loss will be along the previous day’s low (1.3314). For this trade, we’ll set our take

profit along the previous day’s high (1.3374).

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Our trade played out well. At the next candle, price hit our take profit (1.3374) and we’re

out of the trade with 28 pips.

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3. AUDUSD Short Trade

Our first sell trade example is on the AUDUSD chart. Let’s first look at the Daily

timeframe. As you can see, the 5 EMA (BLUE line) is below the 5 SMA (RED line) and

has just crossed the 21 SMA (GREEN line). You can also see that the RSI 5 is below

the 21 SMA.

Now that we’ve established that we have a downtrend, we’ll place horizontal lines to

mark the previous day’s high and low prices.

Let’s go down to the 4 Hour chart.

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On the 4 Hour chart below, you can see that the EMA 5 (BLUE Line) crossed under the

SMA 5 (RED Line), and underneath, the RSI 5 has crossed under the SMA 21.

We’ll enter our sell trade at the close of the current candle (0.8944). As for our stop loss level, we can draw a trendline connecting two significant Fractals and we can use it as a basis to exit the trade. If price touches the trendline, we can exit our trade. In this scenario, the current candle is almost touching the previous day’s low, so we can’t use it as our take profit level. We can place a Fibonacci retracement and use the 161.8 level as our take profit target (0.8909). Let’s take a look at our results.

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On the next candle, price hit the take profit level (0.8909) and we got out of the trade

with 35 pips profit.

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4. USDJPY Short Trade

Our last example is taken from the USDJPY. On the Daily chart below, you can see that

the 5 EMA (BLUE line) has just crossed under the 5 SMA (RED line) and both are under

the 21 SMA (GREEN line). You can also see that the RSI 5 is below the 21 SMA.

We have a confirmed downtrend on the Daily chart, and we’ve placed horizontal lines

along the previous day’s high and low prices.

Let’s check out our 4 Hour chart to look for our trade.

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On the 4 Hour chart, the EMA 5 (BLUE Line) had already been under the SMA 5 (RED

Line). It crossed up along the previous candle, and has now crossed back under the

SMA 5. , and underneath, the RSI 5 has crossed under the SMA 21.

At the bottom of the chart, you can see that the RSI 5 has been under the SMA 21 for

some time.

We’ll enter our sell trade at the close of the current candle (98.15).

We can set our stop loss along the SMA 21 (98.97). Alternatively, we can use the

trendline connecting two significant Fractal levels as our exit point when price touches it.

We entered our trade along the previous day’s low, so we can’t use it as our take profit

target. Instead, we can wait for the EMA 5 to cross back above the SMA 5 or the RSI 5

to cross under SMA 21 before closing the trade in profit.

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Below, you can see that price just kept going down. We had a very strong downtrend.

Our first option to close the trade was when the RSI crossed above the SMA 21 (96.35).

This means that price is now beginning to go up. The second signal to close the trade

was when the EMA 5 crossed above the SMA 5 and simultaneously, price touched the

down trendline (96.73).

Whichever option we’d have taken, we’d be out of the trade with 180 pips profit (first

option) or 140 pips profit (second option).

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VI. Important Notes

When using this system, it is very important to note that a crossover of the indicators is

only validated after the 4 Hour candle has closed. You should wait for the signal candle

to close (or the open of the next candle) before entering a trade.

Because this system is traded on the 4 hour chart, you only need to check your charts a

few minutes every 4 hours, which should give you a lot of time to take care of other

responsibilities you may have. This is one of the things I love about this system.

In terms of the money management, as a rule of thumb, don’t risk more than 2-5% of

your account on any one trade and have only 1 trade at a time to reduce the number of

losing trades that your account will incur at any one time.

As you can see in the examples, the price moved quickly in our favor. That’s because

we made sure we were following the trend. This is the most important aspect of the

system. Get that step right and you’re halfway to winning your trade.

That’s about it for the Forex Master Level system. It’s my honor to give this fabulous gift

to thank you for your continued support. Enjoy!

www.ForexProfitMatrix.com