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forex-classics-robert-borowski-pdf | boroda's Blog
With a mini account you are trading lot sizes one-tenth of a regular lot 10, vs. If this is the only way you can afford to start trading then open a mini account. Remember, as your account quickly grows you can trade multiple mini lots, and trading ten mini lots is the same as trading one regular lot. Realistically you need to be prepared to suffer 10 to 20 pip losses with this system, so obviously your risk per trade has to be a bit higher than professional traders would normally employ. Dont be greedy and youll survive a few losses to continue your gains. Please dont trade money you cant afford to lose.
If you need more explanations about any of the above then simply surf the web a little, particularly looking at online FOREX brokers websites as there you should be able to learn more about the basics of how currency pairs work, or go through my other FOREX training materials. A couple more things before we continue with explaining this amazing trading system. You should have the following three things already set up.
I would personally recommend opening up an account with one of my recommended brokers listed in the Resources Section , however any of the other major brokers may do, or whatever favorite you have. Important in the Resources Section I explain certain important criteria to evaluate your broker to see whether theyll be good to use in conjunction with this system.
It is preferable though to use one of the recommended brokers They will also provide you free charts that will be more than good enough for the purposes of this strategy. You dont need expensive charts; the free ones really are all you need. It is best to use charts provided by your broker as the FOREX market is decentralized and the trading rates differ slightly from broker to broker, and for this strategy you need accurate prices based on your brokers dealing rates to succeed.
There is a special members only section on my website that has. Before you commit any real money to trading this strategy you should practice it for at least a few weeks, preferably a month or even longer, and are experiencing successful trades to make sure you understand everything perfectly. Go to a broker website and register for a free demo account, preferably with the company you actually use or plan to use for your real trades. You can register for a regular demo account if you plan to trade regular lots as explained above, or register for a mini demo account if you plan to start with a mini account.
In your demo account you can practice making trades in real-time without worrying about losing any real money. Make sure to play around with making trades in your demo account, dont worry about making losses, just practice entering trades to get familiar with the steps to entering a trade.
You dont want to miss out on a great trading opportunity because you dont know how to enter a trade. Also play around getting familiar with your charts. I will explain shortly how you will use them.
Thats it. End of story. This means that prices can TREND up, or down, or just move sideways meaning that the prices are kind of stuck around a certain price range. Prices however dont move in a straight line; they move by zig-zagging updown-up-down-up-down-up.
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When the zigzags are making higher highs and higher lows then the price is trending up. When the zigzags are making lower highs and lower lows then the price is trending down. When the zigzags are not making significant higher highs and lower lows then the price is moving sideways, also known as consolidation or channeling sideways. Trends happen when traders worldwide believe that a price is either too low or high and so prices will tend to trend in a particular direction.
Sideways movement happens when traders world wide either believe that the current price is more or less right, or when they are undecided, such as what often happens prior to a FA news release. Trends and sideways movement happen in all chart time frames. Take a look at the next 3 charts that show Daily, Hourly, and 5 Minute candle views. The Daily charts show you trends that happens over a large time frame, whereas the Hourly zoom in to a smaller time frame, and the 5 Minute charts zoom in even more. What I want for you to notice is that as you zoom in you will find that there are smaller trends inside of bigger trends.
For example, if you see that on the Daily charts that prices for say the past couple of months have been trending up, on the Hourly charts you will notice that during this same time period that there were days that trended up, days that trended down, and days that basically just hovered around a certain price range sideways movement. Even if the Daily charts show sideways movement youll find that when you zoom in to Hourly that youll see that it is in fact doing up trends and down trends.
Sideways movement in Daily charts usually bounce around in a range of hundreds of pips more than enough room to catch profits in. Now, if you look at the Hourly charts you will see candles that alone or together go up or down 50, , , pips or even more. From this view it looks like prices have moved straight up or down in a straight line. This is not true. Look at the 5 Minute charts and you will see that what in fact happened is that you had a Micro Trend that lasted for as little as an hour to several hours. Meaning that what happens on a small scale is repeated on a large scale, and vice versa.
Think of how the electrons of atoms whirl around the nucleus, much like Earth and other planets whirl around the sun, which itself whirls around in our Milky Way galaxy, which itself whirls around with other galaxies, which whirls around God knows what else. If you were to look at a chart and not know what time frame you are looking at then you really wouldnt know because the patterns that youll see in a big time frame repeat themselves in smaller and progressively smaller time frames.
As I have just explained to you, a single trend from a big view is in fact comprised of multiple smaller up and down trends, which even those are comprised of multiple trends themselves. Ok, you may now be thinking so what. Believe me, I am going somewhere with this. I have shown you all this to bring your attention to what I call Micro Trends. As with any trend big or small prices move in zigzags, much like smaller waves in the ocean. I soon teach you how to surf these waves, but bear with me while I briefly explain drawing trend lines this is basic trend line stuff, so if you are an experienced trader feel free to jump to the next section, or read it for a fun review.
FOREX trends very well, and in fact if all you knew how to do was to follow trends properly then this alone could make you a very nice income. The most basic technical analysis tool is the trend line. All traders use this. It is amazing how the markets repeatedly bounce off the trend line, making a nearly perfectly lined up series of highs or lows. It almost looks like a rubber ball bouncing along a concrete floor. You know that a market is trending up if it is making a series of higher highs and higher lows.
If you draw a straight line connecting the bottoms approximate best fit then you have just drawn a support line as it supports the prices up. Here is a chart with a support trend line. Note what happened when the trend line broke.
Forex Surfing By Robert Borowski
Also note the triangle explained later just before it plunged pips. You know that a market is trending down if it is making a series of lower lows and lower highs. If you draw a straight line connecting the tops approximate best fit then you have just drawn a resistance line as it resists the price from going higher. Here is a chart with a resistance trend line. This chart also shows a nice support line for the down trend. You can also have trends inside of trends. Often you will encounter i. The shorter steeper trend will eventually end trend line breaks and then it will do another short term trend in the opposite direction to move towards the original trend line.
As long as the prices keep bouncing off of the trend line you can keep making money.
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The standard way traders do this is to buy when the price hits the support line or sell when hits resistance line in a down trend and to place your stop around where it previously hit the trend line this can be a huge stop then trailing the stop. Alternatively, you could also exit when prices have moved a significant distance away from the trend line. Remember the saying, a trend is your friend until it bends. All trends will eventually end.
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Trend lines are commonly used by traders, and there are some good resources in the Resources Section that you could read to learn more about trend lines. It is a way for you to visually interpret price data for a certain time frame. Candles can represent virtually any time frame you want. For the purpose of this eBook we will simply focus on Daily, Hourly, 5 minute and 1 minute candles. This means, for example on an Hourly candle, that it will show you the significant data of what the price action was during that single hour.