HAPPY PIPS!

How to make Millions

a handful of pips per day
one FOREX Trade Setup
at a Time!

Complete Guide to FOREX Trading

by Dr Sofia S.
Printing out more than one copy -or distributing it electronically -is prohibited by international and U.S.A.
copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY
distributed.

Copyright © SIOLEENO INV. CO LTD

All rights reserved. No part of this publication may be reproduced or
transmitted in any form or by any means, electronic, or mechanical, including
photocopying, recording, or by any information storage and retrieval system.
Published by:

SIOLEENO INV. CO LTD

9 Arch. Makariou Ave., Lazaros Center, 1st Floor, Suite 107,
6307 - Larnaka- CYPRUS

Forex Training Website: http://ForexID.com

E-Mail: admin@fxholic.com
Advanced Training Program : http://FXholic.com
To my FXHOLICS and to my children.
Special Acknowledgment

This book started as a brief Trade Setup presentation draft and turned into the complete Trading
Guide you’re now reading. There are two of my FXHOLICS I wish to express my gratitude to,
with tears in my eyes for their support and precious contribution to this piece of work, Roberto
Parisi from Italy and Georgios-Theofilos Angeloglou from Greece, both very special friends of
mine. To my non stop journey of studying the Markets, Roberto’s analytical and synthetical
thinking added different angles of viewing things and definitely widened my perception of what
is called Technical Analysis. He’s also enriching FXholic GOLDEN Live Workshops
experience with his amazing sense of humour. Georgios, with his persistent and challenging
questions, helped me develop and complete at least two Trading Systems.
TABLE OF CONTENTS
FXholics prefacing the Book
Introduction
BE
Chapter 1 : Protect Your #1 asset
Chapter 2 : Pick your Life
Chapter 3 : Daily Habits
Chapter 4 : New Habits = New Life
Chapter 5 : Fear and Bath Tub
Chapter 6 : Do you have what it takes?
DO
PART 1 : The Destination and the RoadMap (The Trading Plan)
Chapter 7 : FXHOLIC’s Equation
Chapter 8 : Three Secret Keys
Chapter 9 : The Golden Ratio of S/E
Chapter 10 : My P
Chapter 11 : My D
Chapter 12 : Defining RISK
PART 2 : The Car (The Trading System)
Chapter 13 : Candlesticks and Price Action
Chapter 14 : Trendlines
Chapter 15 : ICHIMOKU KINKO HYO
Chapter 16 : Bollinger Bands
Chapter 17 : Fractals
Chapter 18 : Stochastics - “Husband & Wife”
Chapter 19 : Alligator
Chapter 20 : MACD
Chapter 21 : PSAR the “prudent”
Chapter 22 : RSI the “narcissist”
Chapter 23 : Fibonacci Retracement Tool
Chapter 24 : ADX
PART 3 : The Driver (Your Trading Attitude)
Chapter 25 : Your Philosophy
Chapter 26 : Duct-Tape, Lucky Charms and other superstitions
Chapter 27 : Loser’s ENEMY - Winner’s SECRET
Chapter 28 : The Masochist Nervous Trader
Chapter 29 : The Noise
Chapter 30 : Market’s Tourist
Chapter 31 : Roller Skates & Munehisa Homma
Chapter 32 : One Pair ONLY!
 Chapter 33 : Grasshopper’s Syndrome
Chapter 34 : Patient as a Rock!
Chapter 35 : The Cool Trader and Monolithic Trading
PART 4 : Driving Conditions (Market’s Conditions and Strategies)
Chapter 36 : Market’s Conditions and Physiology
Chapter 37 : Trading Strategies
Trending Market
Range-Bound Market
Consolidating Market
Chapter 38: What’s the best Strategy?
Chapter 39 : Currencies Strength Ranking and Currency Pairs Correlations
Chapter 40 : Trader’s Choices and Trading Styles
PART 5 : The Road (Reward Assessment - Risk Management)
Chapter 41: Price Action CYCLES and VECTORS
Chapter 42 : Estimating Reward
Chapter 43 : Picking Trade
PART 6 : Driving the Car ( Trade Management)
Chapter 44 : Picking Time-Frame
Chapter 45 : FOCUS on ONE Thing at a time
Chapter 46 : Entry Criteria & the Tools of my Choice
Chapter 47 : SL Placement & Flames
Chapter 48 : SL Trailing
Chapter 49 : Take-Profit Target Placement
Chapter 50 : Stay In / Exit Criteria
PART 7 : The 7 Steps Checklist
PART 8 : BUY/SELL Scenarios
PART 9 : FXholic’s SCALPING
PART 10: Red Account’s Recovery - HEDGING
Chapter 51 : HEDGING
Chapter 52 : Trading Paradox
Chapter 53 : 10 Common Deadly Mistakes
PART 11 : Let’s Trade.
HAVE
Chapter 54 : Iron Age
Chapter 55 : Full Time Trader vs Full Time Investor
Chapter 56 : Redefining Success
Chapter 57 : Selfishness - Creating Wealth
Chapter 58 : The Pool Effect & Parkinson’s Law
Chapter 59 : The Life I Want.
Chapter 60 : Thank You
Resources
Legal Disclaimer
FXholics prefacing the Book

I heard about forex in 2005 and at that time had the impression that only
gamblers and the very rich could benefit from it. A few years later I began to
learn to trade stocks and ETFs. Stocks and ETFs did not interest me because
the brokers and their platforms were very complicated. While surfing the net
looking for more information I got drawn to Forex. Because the MT4
platform was very simple and the capital requirement very small, I decided
to learn to trade Forex.

The problem I ran into was that hundreds of systems out there were
claiming that trading forex was very simple and there perfect system will
make you rich overnight. My ignorance compelled me to try everything I
could purchase, hoping to find that perfect system.

Eventually I landed on FXholic.com. Sophia’s demeanour attracted me

and I joined her workshop series which she had just started. This later
evolved into FXholic Golden. FXholic Golden is very close group. Sophia
knows everyone by name and addresses our specific strengths and
weaknesses. She has developed a very clear and simple plan of action which
anyone can follow. The weekly workshops teach us how to apply the rules so
the entry, stop loss and take profit is easily accomplished.

Sophia’s approach to trading Forex is very simple and practical. I

strongly believe that of hundreds of system out there FXholic Golden is most
suitable for a NEW TRADER.
Jumma K., Canada

----------------

(Below please find the original Review in Italian, followed by translation)

FOREX MARKET
HAS NO FACE
Da giovane ho subito il fascino del trading finanziario , vedevo i mercati
esclusivi e inaccessibili, pieni di soldi misteri e segreti.

La vita mi ha portato altrove, ma quel richiamo non si è mai spento. Pochi

anni fa è stato un libro a catturare la mia attenzione, con la copertina
colorata da un bel grafico e un nome affascinante: Forex.

È bastato poco per decidere di investire un po' di tempo e denaro in altri

libri e corsi, ma qualcosa non funzionava.

La passione cresceva sempre di più e con essa la frustrazione nell’

incontrare persone che si comportavano come depositari di saggezza e
verità, solo per essere in parte profittevoli.

Ho scoperto che l'attenzione era rivolta sempre verso i numeri, la

matematica e le notizie, ma continuava a mancare qualcosa, specialmente
quando la causa degli insuccessi veniva cercata nel mercato.

Chi cerca trova, si dice e non è passato molto tempo per conoscere Sofia;
con lei ho trovato la parte mancante del puzzle e il mondo si è aperto.

Il trading nel Forex è un percorso di vita. Si dice che il mercato non ha un

volto, a me piace pensare che ha il tuo.

Quando diventi cosciente che il trading può essere uno strumento diretto e
chiaro attraverso il quale sperimentare la tua crescita personale, hai la
grande e meravigliosa opportunità di unire passione e terapia.

Sofia rende questo percorso meraviglioso.

La sua conoscenza , frutto di migliaia di ore di studio e sperimentazione,

l'infinita passione nella materia, unita all'onestà e integrità intellettuale,
sono la migliore garanzia a cui affidarsi.
Mi piace pensare a Sofia come a Virgilio nella Divina Commedia quando
mano nella mano con sicurezza e amore ti accompagna in un mondo che
può anche diventare il tuo incubo.

In questo libro c'è il Trading Forex visto a 360°, sperimentato

dall'autorevolezza di chi l'ha scritto, e condiviso in parte dai corsi di noi
FXholic Golden, un gruppo con la consapevolezza e la gioia di aver
incontrato una fortuna e stare con persone speciali.

All’interno troverai cose che non immagini far parte della vita di un trader,
un equipaggiamento tecnico e un supporto psicologico unico nel suo genere,
rendono questo manuale un Turbo per chi si trova bloccato e una fonte di
stimoli per chi pensa di essere bravo.

Capita così che qualche centinaio di pagine possono diventare una

rivelazione e aprire la porta a qualcosa di meraviglioso che portiamo con
noi.

Vivere di emozioni, divertirsi, e condividere la crescita con gli altri, richiede

azione.

Questa esperienza conferma la mia personale volontà di rivolgermi al

professionismo nel Forex

Trading e continuare il viaggio con Sofia, la mia Personal Trading Trainer

e i miei compagni.

Se la passione non ti manca, ora, non hai più scuse, il mondo FXholic ti
offre tutte le possibilità a tua misura.

Inizia a tradare te stesso.

Grazie a Sofia e ai miei amici FXholic, stare con voi è fonte di gioia e
ispirazione nella mia vita.

Now it’s up to You!

------------------

Since my early youth, I was being fascinated by finance trading. I was

seeing the markets as an exclusive and inaccessible space, full of money,
mysteries and secrets.

Life led me to a different route, but that calling never silenced. A few years
ago, a book captured my attention. It had a colorful cover with a chart and
an enticing title : “FOREX”.

Shortly after, I decided to invest time and money in other books and courses
but something just didn’t work.

The passion grew but frustration grew along with it, because I met people
who were acting as repositories of wisdom and truth while being only
partially profitable.

I discovered that the attention was always revolving around numbers,

mathematics and news but still something was missing especially as it
became evident to me, that for every cause of failure, the pattern was to
blame the Market.

They say “the one who seeks...finds” and soon after, I met Sofia ; with her,
I found the missing piece of the puzzle and the world opened wide to me.

FOREX Trading is a way of living. They say FOREX Market has no face,
but I believe it has the face of the trader...YOUR face.

When you become aware that trading can be a direct and clear instrument
through which to experience your personal growth, you have the great
opportunity to combine passion and self-discovery.

Sofia makes this journey wonderful.

Her knowledge, -the result of thousands of hours of study and
experimentation - the infinite passion on the subject, combined with
intellectual honesty and integrity are the best guaranty to trust in.

I like to think of Sofia as the character of Virgil in the Divine Comedy, when
she takes you by the hand and with safety and love introduces you to a
world that can also turn into your nightmare.

In this book there is Forex Trading seen at 360°, experienced by the

authority of the writer and shared in part with members of FXholic Golden,
a group of special people I feel glad and fortunate to belong to.

Inside you'll find things that you can't imagine being part of the life of a
trader. A set of technical analysis tools and a unique array of elements of
psychological support, make this book a Turbo-charger in case you feel
blocked and discouraged and a source of motivation if you want to be brave
and make the effort.

It happens so that a few hundred pages can become a revelation and open
the door to wonderful things we carry within us.

Living a life emotionally rich, having fun and sharing growth with others
requires action.

This experience reinforces my desire to turn Pro in Forex Trading and

continue the journey with Sofia, my Personal Trading Trainer and my
teammates.

If you have passion, now you have no more excuses because FXholic
Training offers all the possibilities in your size.

Start trading.

Many Thanks to Sofia and my FXholics friends! Being with you is source of
joy and inspiration in my life.
Now it’s up to You!

Roberto P., Italy

-----------------

I first heard about forex around 7 years ago. I have been reading a lot of
books, I have been trying to find information wherever I could, on internet
forums, reading analysis from various sources.

I started few live accounts with different brokers. I have been winning but
also losing much more. I did not have enough knowledge. When I was
looking at my notebook to the trades I had taken, most of the time I could not
understand what went wrong.

I heard about Sofia in January 2014 with the mobile application signals.
I joined the first Fxholic programme in July 2014 and then the Fxholic
golden programme in February 2015.

For the first time I feel that I am on the right track. I have found the right
person for my education. Sofia has a real gift to explain the most technical
aspects in simple words.

I have built confidence. I have set up a goal and I am convinced that I will
succeed.

Anne-Marie F., France

-----------------

I have always been fascinated by automation. I remember the first time I’d
seen an entrepreneur magazine ad (Make money while you sleep!) I was
introduced to a stock trading robot, which didn’t work at all… After doing
more research, I got into binary options trading, one thing led to another
and I finally decided that I wanted a chance in trading “forex”. I somehow
felt it was for me.

I soon started trading automated strategies, every indicator I could get my

hands on and guess what...I was still FAR from the real deal…

When I was first introduced to Forex, I’d seen great opportunities in the
leverage Forex can give you, however after joining Sofia’s program, I
realized that when applying the correct knowledge to leverage in Forex, the
opportunities are huge!

My first live trading experience was not so good.

I soon figured being successful in Forex is about staying “cool” whether

winning or losing and if successful in mastering that, you have come a long
way…

I first was introduced to FXHOLIC by the MOBILE APP!

I think the real reason for joining the training was because of the “down to
earth” training procedures and Sofia’s real dedication in helping others
succeed.

So many trading Groups are only interested in selling you more and more
materials and all the while keeping you interested in the next Indicator.

One of the biggest successes in learning Forex is building confidence, you

know once you have the knowledge, confidence will follow.

Forex trading has now completely changed my passive income goals.

Joining FXHOLIC Program is so much more than Forex. Sofia has

structured the Program in a way so everyone -if willing- can have a chance.
It’s important to re-design your life to be able to win.
I would recommend FXHOLIC’s services to anyone who is serious about
succeeding in Forex. If you’re looking for honesty and real facts about
trading, look no further!

Having being one of the first FXHOLICS, have also waited for this book to
be released for a long time and I can only say Sofia has put an extreme
amount of effort in this project to help real people with real ideas reach real
goals.

This is why I’m giving the book in a scale of 1 to 10, a whopping 10!!!

Manny H., USA

-----------------

I started forex trading in 2012 introduced to it by a close friend who was

able to generate monthly positive profit from currency market. I felt excited
and keen to understand what all the forex trading was about. I started to
explore the detail from all kind of sources e.g. borrow many forex books to
read from library, online study forex trading topic/subject. Then, with some
basic knowledge and being familiar with technical charts of forex trading, I
started to open Demo account from the brokers and try various function in
the MT4. Full of enthusiasm, I also proceeded signing up to 3 full day
Forex trading classes in Singapore which costed ~$3k.

But the journey on forex trading is not smooth as everyone has high
expectations for and I did not have success even though had put a lot of
effort in every strategy/method e.g news trading(announcement of economic
news), technical analysis, EA trading, bought a lot of indicators from Forex
Gurus, signed up for online classes (webinar), attended finance conference
(forex trading)annually and etc. I gave up after 2years with many live
trading accounts unable to survive more than 3 months each time.

But in 2015, I encountered the Fxholic App and after having gone through
some survey, I decided to give myself a chance to re-start the forex trading
and later proceed to sign up for Fxholic Golden together with my wife May
in May 2015.

With the Fxholic program, I never had to look back or look for other forex
Guru. Sofia’s coaching method is very concise, full of positive reinforcement
messages to each member and she will not reject member request for special
need e.g. analysis on a specific currency pair, flexible on lesson timing,
share her personal trading knowledge and etc.

Sofia is full of passion in forex trading and these give her determination to
share her forex trading knowledge with everyone by writing a new book. The
book content is covering all relevant topics related in forex trading and will
be useful to new and experienced traders alike. It gives insight of how the
technical Analysis helps the trader to follow a set of criteria prior to
entering a new trade in order to enhance the success of each trade with
positive Pips.

The forex trading is a high risk investment and not suitable for everyone. But
with proper knowledge and the Discipline to follow a set of criteria, the
journey of forex trading will be fruitful and prosperous so that you have the
ability to help others or establish a charity organization.

May and Gaston L, Singapore

-----------------

I first learned about Forex in 2010 from a colleague at work. With my

interest piqued, I wanted to learn how Forex trading could be used to ensure
my future financial security given, at the time, the poor economy.

My early experiences with Forex were typical. Gains followed by losses

twice as large. I read extensively looking for a “holy grail,” exploring
increasingly complex situations and convoluted methods. As you might
guess, perhaps from your own experience, none of these amounted to
anything useful. I obviously needed to do something different.

I began searching for reputable sites where I could learn more about Forex
and what a successful trader should be doing. This is how I discovered
Sophia’s first set of books and her YouTube videos on trading and signals.

After watching Sophia’s YouTube videos on signals I observed she was

following many of the best practices in Forex (multiple time frames, risk
management, waiting for the right opportunity, etc.).

I noted that many of her signals were accurate and made some money
following them. Using a variation on the proverbial “give a man a fish”
analogy; having eaten a few fish I now wanted to learn how to fish. With
enough data to convince myself Sophia’s success wasn’t a statistical
anomaly I joined the FXHolic Golden program because I wanted to learn
the methodology Sophia uses to analyze the market and make trading
decisions.

I am grateful she has provided a structured environment where we can ask

questions and learn. As a result of following Sophia’s teachings and advice
my confidence has increased and I’ve become a more disciplined trader. I
also have a much better understanding of the Forex market and how it
works.

I recommend, without reservations, Sophia’s work to new traders.

Kurt H., USA

-----------------

I first heard about Forex Trading through a colleague of mine at my first

job out of College about nine years ago. She wasn’t a trader herself but had
a friend who was and who had been trading on her behalf for around 10
years prior to when we met. She knew a bit about forex trading and had
shared with me some of her friends’ experiences as well as her own wealth
gained through her friends’ help. I was immediately interested as deep down
I wanted to be able to control my own earning power. At the time though I
did not have the money to invest in forex trading education so I had to put it
on hold for the next couple of years.

In 2013, I resumed my search for FOREX educational material/courses

and had eventually signed up with an online trading community in
December 2013. I spent the next year reading and studying the principles
but by the end of 2014 I still did not have the confidence to open a demo
account. I started to read the material over and over again as I was
determined to get going but somehow I just did not think I had everything I
needed to start Demo Trading.

In June 2015, my sister called me and said “Guess what!? I have someone
that does forex trading sitting in front of me” and she made me speak with
her colleague, Melville. Melville and I spoke and I asked him about
everything. Was he trading live? Was he making money? Where did he learn
how to trade? He had started a couple months before and was already live
trading and making money! He told me about Sofia’s FX Golden Program
and how it helped him and I was once again excited about Forex Trading.
He gave me some information including the website and after doing
research for around a week, I signed up in July 2015 for Sofia’s FXholic
Golden Program.

Since being a part of the program, I have seen my confidence as a trader

grow tremendously. I believe a huge part of that comes from the workshops
and how Sofia explains and breaks down information. She has a unique gift
of explaining complex details to a level where even a five year old can
understand by using humor and analogies whose imagery simply cannot
leave your mind! She teaches you to focus on one thing at a time and these
methods really helped to clear the clutter for me and soon I started putting
the pieces together. In August, I opened a demo account and by September I
was trading live and even made 60 pips my first live trade!
 I am truly excited about my future as a forex trader as I see where it would
give me the flexibility of doing more meaningful things with my life instead
of being burdened by a 9 to 5 daily schedule. I continue to learn something
new with each and every session with Sofia and I would recommend her
work to anyone; in fact I’d say, if you’re currently losing money in the
markets or you’re a new trader - don’t start trading without her! You’ll
thank me later :)

Rene W., Jamaica

----------------

In here you will find guidance focused at giving Traders a complete system
and a well-structured way of thinking when trading.

I was introduced to the world of Forex Trading by my husband. As I

traded, particularly live trading, I saw the potential Forex had. But I didn’t
know the best Position Size to use or what Trading Style to decide on. I
struggled with my Entry Point as well as where to place my Stop-Loss and
Take-Profit Target. I also had no clue how and when to Exit. As I traded, I
grew extremely frustrated. I was struggling because though I made some
profitable trades, I was losing money and this was taking a toll on my
account.

I first came in contact with Sofia’s work through her mobile app and
website. Her books are easy to understand. Her signals are not just about
Entry Price, Stop-Loss levels or Take-Profit Targets. They are so unique
that they show you how to follow the price action and be in control of your
trades.

Once I joined FXholic Golden Training Program, the uncontrollable drain

on my account immediately stopped. Sofia has a fantastic way of breaking
down technical analysis that makes it easy to understand. My better
understanding of the markets has given me more control of my trades which
has greatly boosted my confidence. I now avoid many mistakes of the past.
 Even my Trading Psychology has drastically changed for the better.
My ambition is to be a Killer Trader. Sofia’s drive and passion radiates as
she helps me to strive for my goal. As my account doesn’t drain anymore,
Forex Trading is set to be a secondary source of income.

I’m so pleased by the great improvement I’ve quickly made in my Trades

that I’ve introduced my colleagues to the Fxholic Golden Training Program
and they too have quickly seen great improvements in their Trades.

Passion, hard work and dedication combined with the Fxholic Golden
Training Program, is an amazing combination. I wish that I had discovered
and joined the Program sooner. I advise anyone to give it a try and see for
themselves.
Chika A., Nigeria

--------------

I was always interested in the Financial markets. I learned of Forex in

2013 and studied it through internet resources. I came across KISS series
books from Sofia through my Apple device, and the rest was history !

Sofia has a writing and teaching style that anyone can understand, hence
that’s how I became hooked. When you read her books and study technical
analysis with her, she makes it personal and that’s how it works.

As an FXholic Golden member and life long student, I can honestly say
that Sofia has changed many lives through her books and teachings,
certainly my life and understanding of the Forex markets has changed on the
positive side !
Jeff R., USA
--------------

Dear Sofia,
A gift indeed you sent me - The Ichimoku Kinko Hyo system!
 When I first received it from you I was skeptical as I thought it was too
complicated with all those esoteric Japanese terminologies. Still struggling
with the names of candlestick patterns...now ICHIMOKU!

But after seeing a new account I just refunded with $1200, drain to less
than $500, I was ready to try anything. Tuesday/Wednesday last week, I read
through the book and watched the videos and experienced the "ICHIMOKU
Magic", as you would put it.

By close of business this past Friday, my equity is now at $1,756.02. This is

simply phenomenal, just using the 4TF strategy that I must confess I am yet
to fully understand. The trades were rather aggressive, but it worked. Thank
you very very much my ICHIMOKU EMPRESS.

I heard about FOREX for the first time in my life in April this year. By the
end of April, I had committed $29,500 to the market which was finally wiped
out in July (Now this is money I CANNOT afford to lose, my wives do not
know I have lost all our money). FOREX trading resonates with me. I realize
I needed to learn how to trade, attended a few live/online webinars and
refunded my account with borrowed $1,200. But for the gift you sent me, I
would definitely have lost the money. With over $500 in profit after only two
days of trading using your system, my self confidence is restored; I now
believe I can recoup my losses and begin to trade profitably.

By the first week of September, I hope to be financially buoyant enough to

enroll in your FXholic Golden. Until then please accept my SINCERE
thanks for this FANTASTIC gift you have graciously shared with me.

Warm regards,
Abraham M., Nigeria
--------------
 I first found out about Forex around 2010 when I noticed a colleague in
the office studying various graphs on his screen when nobody was looking. I
asked him about it and he gave me a quick intro into Forex and his strategy
which I now know to be news trading - placing trades in response to news
events.

What really intrigued me was the possibility to make additional income

with minimal effort provided you could manage the risk effectively.

So very quickly I opened a Forex account and I did initially play with a
demo account. For me personally, the demo didn't feel real enough because
the wins didn't really excite and the losses didn't really hurt. So I put some
money into my account and began live trading without any real strategy. I
had some spectacular wins but ultimately my losses were greater than my
wins and I found myself regularly topping up my Forex account.

I needed to find a way to increase my wins and reduce my losses so found

myself looking at different strategies, signal providers and application when
I came across Sophia's FXholic’s FOREX Signals Iphone app. From there
I noticed that she had a nice set of comprehensive programmes and offerings
to help newbie traders like me transition to professional traders. More
importantly her techniques are based on pure technical analysis and not
media based news-trades etc.

After getting to know more about Sofia and her mission values during a
free workshop, I joined her FXholic Golden programme which gave me
immediate access to comprehensive training materials that are very easy to
digest and understand together with signals and access to a group of
fantastic fellow FXholic Golden group members.

Since joining the FXholic Golden programme I am making more winning

trades, have a better insight of the Forex markets and slowly but surely
building up both my confidence and my trading account.

I can highly recommend Sophia's work to new traders as not only are her
programmes proven but they are completely transparent with freedom to
collaborate with fellow programme participants.

Sophia has just also released her new book - Happy Pips which is another
example of an amazing piece of work that provides a complete insight into
becoming a successful trader from improving your mental and physical state
to different proven strategies and how to apply them.
Majed S., UK
----------------

When Sofia asked me for a review on her new book i couldn’t resist
giving it in the form of two scenaria, the same way she does on her amazing
instructions.

The first scenario -thankfully a hypothetical one- is about me all alone

struggling to swim in the FOREX ocean, losing all my money, my health and
finally giving up keeping only my bleary dreams, because in this ruthless
environment, I would never be able to survive bringing together in a proper
methodical manner all the necessary elements and knowledge.

And if I’d survived, I wouldn’t be able to stand on my feet anytime soon, at

least not sooner than a decade.

The second scenario -happily the real one- is about Sofia having gone
through her own path, hew own ''decade'', having found the courage to fight
and now giving to all of us with such generosity the guidance we need to
stand on our own and learn how to grow personally and as FOREX Traders
on our way to success.

This book and her whole work is a true blessing. She is a gift to me.

Georgios Theofilos A., Greece

--------------
Introduction

This book is not just another FOREX related publication.

It’s a confessions book about the biggest loves of my life,
because thanks to them I’m happy and I feel blessed to
share my discoveries about achieving and maintaining
happiness. My goal is to make you realize that in order to
get different results, you need to change your thinking
patterns. This way you’ll be able to re-design your whole
life and successful FOREX Trading will be just a part of
your personal Success System.

I’ll dare to be open. I’ll dare to be bold. Otherwise I

won’t be able to shake you and push you out of your
comfort zone to your extremes, where your best self is.

I created a Guide for you which is not subject to your quality of mind, to your level of
experience, to Governments, Central Banks’ policies, countries’ economies, or any of the
external factors that are beyond your control. I put together the system’s parts in modules and
sequences helping you understand their correlations and dependencies. I needed a lot of high
level energy to do this and here is where my life’s biggest loves played their role.

Most people live their whole lives without meeting their Big Love. I am extremely fortunate for
having met mine. The sheer fact that he exists and is not a creature of my imagination, makes
me feel grateful. If I die tomorrow, I’ll die happy. My two children, are my Angels and the
energy I receive from having them in my life is immeasurable.

Another huge stream of positive energy flows through me from my FXHOLICS, a very special
Group of Bright Individuals with golden hearts. They’re my best friends, the shining stars on my
sky, the very people I can call “my own” and my constant motivators helping me refine my
Strategies, improve my Signals Service, add more features to my APP, create more tools, plan
new Series of Books, discover new Trading Methodologies. We share the same passion for
FOREX Trading. Thanks to them, this Book came to be. When I sent them an email asking for
their Introductory Notes for my Book, so I could shield my work from competitors’ fake bad-
mouthing Reviews, Anne-Marie, May, Rene, Chika, Gaston, Roberto, Jeff, Manny. Abraham,
Jumma, Majed, Kurt, Georgios, responded with messages that filled my eyes with tears of joy. I
can’t thank them enough for being members of my ambitious Training Program, FXholic
GOLDEN and for their contribution to its evolution. Their presence in my life is invaluable.
You can safely guess that FOREX Trading is my true passion. My relationship with it started the
same way it starts for most new Traders, losing money. Then I purchased as many AMAZON
books as I could put my hands on and again ...kept losing money because the books were written
in an “extremely technical language” I couldn’t understand and I needed someone to take me by
the hand and explain to me the basics in plain words and then introduce me to the principles of
money, risk and trade management in a way I could follow up with instead of feeling totally
alienated.

I wanted that kind of educational material so badly, I gave a promise to myself that as soon as
I’d break the code of successful Trading, I would write the easiest to understand books about
FOREX Trading. So I kept my promise writing the KISS FOREX Series of Books.

But on the way, I realized that although I had broken the code of successful FOREX Trading, I
kept losing money making the same mistakes again and again although I knew I should avoid
them. It was then when it became evident to me, that giving someone the list of ingredients to a
delicious cake is not enough. They need to have the full recipe including stages of preparation,
proportions of the materials, timing and all the tiny details. But still, I only had basic ingredients
and terrible mistakes in my hands. How would I come up with a proper recipe?

Then I thought backwards doing some “reverse engineering” to both my right moves and my
wrong ones. And I discovered patterns. I made a list of the right patterns and a separate list of
the wrong ones. Then I reversed the wrong ones into their opposites turning them into right
patterns. I had to think backwards, also looking at the bigger picture of the trading’s mechanics.

Started asking questions to myself. Before I Enter a Trade, what is it I want to make sure of?
How much Risk should I take and how is it determined? How can I decide if a Trade is worth
taking or not? Which Time-Frame should I trade from? How could I distinguish the types of
trades that should be taken from Daily Time-Frame from those to be taken from H4 or even M15
Time-Frame? What should I be aware of when placing my Stop-Loss order? Once I’m in what
do I want to watch for in order to Stay In and what should trigger my Exit? How often should I
check my Trade? How could I estimate my Take-Profit Target level? Should I trail my Stop-Loss
or not and how should I do it? If things go well, when should I add positions and how? If
things go wrong what should I do? I put together the Answers to my Questions building up a
Trading GUIDE which is immune to subjective or external factors. Studying the Market wider
and deeper, I refined this Guide into a Complete SYSTEM which does not depend on the News,
the Releases, the Central Banks’ Policies, the Governments’ games, the monetary war, the
countries’ economies, the weather, the sun-signs or whatever the Capital Markets’ attention-
seekers want to stuff your mind with.
Let’s not beautify things for no reason. The actual act of trading is pure gambling. I have been
fighting against the term for long, but this is exactly what it is. We bet that a pair will go up or
down and depending on our bet’s performance we make or lose money. But the use of rules and
criteria based on Mathematics shifts us from a gambler’s position to that of a sophisticated
speculator’s/investor’s one.

Successful Trading is not about Methods or Strategies - there are as many as successful traders
and more-. It’s about the ENTRY, STAY IN and EXIT Rules and Criteria.

Trading based on Technical Analysis is about statistically significant possibilities stacked to

trader’s favour. There is no space for hoping, wishing or gambler’s attitude because using
Mathematics and tools that help you base your trading decisions on Rules and Criteria is a
repeatable and scalable Model that anyone can follow. That’s why I like saying that “gambler
hopes, trader knows”.

My SYSTEM is made of Rules and Criteria which are not related to opinions, predictions,
assumptions, guesswork, wishes, prophecies or crystal ball readings. You let the Market Lead
and you Follow. You just respect the Risk Management and Trade Management Rules and
Follow the Criteria. Strategies are countless, practically as many as the successful traders. Once
you master my SYSTEM, you can try anyone’s strategy or even design your own. Rules and
Criteria remain the same. That’s why there is a huge distinction between a successful trader and
a gambler. To apply the rules and follow the criteria takes true adamant character and that’s why
I love FOREX Trading so much. It helps me discover myself, my higher self.

And here I am, introducing to you my Complete System in two New Series of Books : “Happy
Pips” and “Boring Trades”. “Happy Pips”, the first Book of which you’re now reading, is going
to be a Series of Books based on the HOW of the Trading, the knowledge which you should
apply on your Trading including both the right mindset and the necessary technicals. “Boring
Trades” is going to be a Series of Books highlighting ONE TRADE at a time from Entry to Exit,
candlestick per candlestick, where the Knowledge will be applied focusing on the EXECUTION
of what the “Happy Pips” Series will be presenting to you.

Markets can have a mesmerizing effect on a New Trader. This constantly changing Dynamic
Environment is full of exciting elements, especially if you watch more than six pairs at the same
time on your monitor, fifteen pairs on multiple monitors…or even switch METATRADER’s
APP on so many times during your job’s breaks, that it eats up your smartphone’s battery.
Sixteen hours can pass like sand slipping through your fingers. Markets can put you to bed and
welcome you in the morning for another sightseeing tour.

You know it’s pure magic. What you don’t know is that you have joined the crowd of Markets’
tourists. Sadly I had been one. And I’m ashamed to admit it took me years to escape the trap of
this time-sucking vortex that gets your eyes glued to the monitor and your brain frozen by info
overload.

Markets’ tourists get fascinated by one move here and one move there, jumping from one pair to
another, switching Time-Frames faster than blinking their eyes. They’re killing their precious
time without knowing what to do and when to do it. They just swim in an ocean of flashy
information in the form of colorful candlesticks and lines, most of the times sinking slowly down
to the drain killing their Accounts on the way.

Having lived that experience, and noticing that my APPS’ Users and WhatsApp Signals
Subscribers run the risk of falling in the same trap, I decided to create the two new Series of
Books, “Happy Pips” and “Boring Trades” dedicated to the Trade Set-Ups Theory and Practice
from A to Z. Instead of giving to my APPS ‘ Users one fish at a time in the form of a Signal, I’d
rather show them how to fish on their own.

As I was working on the first “Happy Pips” book’s structure, while trying to get into my readers’
shoes, realized that first I have to help them break a false thinking pattern that primarily matters
what you HAVE, then what you DO and finally who you ARE. In order to embark to the journey
to success, you must have your priorities in proper order which is the other way around. First
you must BE your core self, which means you have to discover your unlimited potential self
turning from a caterpillar into a butterfly. Then you have to DO the actions that will materialize
your potential offering value to the world . Last, you must manage what you HAVE , living a
purposeful and fulfilling life. You are doomed to fail in FOREX and in any other ambitious
venture, if you are a “lost soul” having a crippling relationship with yourself and being
disconnected from life and people around you.
This Book’s first Section is about how to “BE” the true you in life so you can be the true you in
FOREX Trading as an extension of your unlimited potential. The second Section is about how to
“DO” the right things in FOREX Trading using the SYSTEM I’m giving you. Whether you are
going to use the SYSTEM to achieve a specific goal of doubling your account’s equity ten times
starting from $1000 building it up to $1Million is irrelevant. Once you MASTER the SYSTEM,
you can set any goal you wish because you are already successful. You have mastered the
SYSTEM. You can use the formula any time, any way you want. It’s the same whether you want
to double $1000 or $10Million. The third Section of the book is about how to manage what you
“HAVE” but goes beyond wealth management closing the loop of the three core elements BE-
DO-HAVE in a way that you can see how they are interconnected and combined to a “whole” of
a meaningful life, the life you deserve.

That means not only new Traders or potential Traders qualify for my book. Even if you have
never heard of FOREX Trading before, the way I present the process towards familiarizing
yourself with it pursuing success in life, will make the journey inviting and rewarding to you.

New Traders don’t know that Trading is about Criteria and Rules. A whole Industry wants them
to believe that it takes a lot of money and special skills to trade successfully, let alone the array
of super-sophisticated Software and Trading Robots they should include to their Trading
Arsenal. And of course….the News….

Well, let me burst this ugly bubble once and for all. You may study my Signals, or your may be
so lazy you don’t even play the Videos till the end. You may have picked up parts of my
Strategies or you may still wonder what those tools I’m referring to are about. You may have a
Trading Plan, you may think you have a Trading Plan or you may even believe that having a
Trading Plan sounds too theoretical for an “action trader” like you. All of the above are fine
with me. But are not fine with you. And if I share with you the only Philosophy and Thinking
Process that can make you a successful Trader, I doubt you’ll ever care to go back to your old
habits :)

Through “Happy Pips” and “Boring Trades” Books, I’ll show you why you should focus on
“locking” your Daily Pips every day and why you should follow a certain sequence of steps till
they become second nature to you. We will be using Mathematics -Technical Analysis Tools-
and a solid SYSTEM consisting of successful Trading’s four basic pillars : a Trading Plan
because we have to know which our destination is and the roadmap to get there, a Trading
Strategy because we need a “car” to take us to our destination, a Risk Management Set of Rules
because we must pick the right road and a Trade Management Set of Rules which means we
must know how to drive the “car”.

Successful Trading is about using the System’s Rules and Criteria in a repeatable and scalable
manner, being the Boss of your Trades. I have incorporated the Rules and Criteria into a 7 Steps
Checklist and I’ll be sharing every single step of this process with you on Real Trade Set Ups.
You just follow the steps copying my thinking process.

Here, let me add a warning. The information I’ve put into this book is just that, useless inactive
information like the oceans of it you’re swimming in every moment of your life. Unless you
read the book and start applying what I’m sharing here, there will be no results in your Forex
Trading or your life. Nothing will happen.
You may feel confident with what you know and actually you most possibly have the mentality
of a “knows it all” , typical for a beginner. I know because I’ve been a “knows it all” champion
for years, regarding FOREX Trading, which costed me dearly.

I thought I had gotten rid of this self-destructive Syndrome till my Hermes came to be giving me
a great lesson. On my first day to the ART LAB, wanting to work on my inclination for
drawing, with the arrogance of a “knows it all”, I defied my tutor’s instructions towards
“playing” with the full range of shades. I also neglected using the special eraser for carbon,
which might have helped me take
Hermes’ profile to a whole new level.

I stubbornly insisted on my crippled

belief that all I needed was practice and
my talent would shine. I was wrong!
When my tutor showed me how to add
shades and how to use the eraser on my
next drawing, I was fast to comment “I
have this eraser” and she replied
“Having it doesn’t help much. You’ve
got to use it!”

That’s how it goes with every piece of

information you choose to expose
yourself to. It becomes knowledge only
when you use it. Otherwise it’s like it
never existed for you. And most of the
times, to let the new knowledge grow roots into your brain’s synaptic circuits, you have to
unlearn all that garbage that made you have the idea you know it all leading you to a status of
confusion and frustration. Knowledge gives you clarity and confidence. Keep that distinction in
mind.

This book has the power to help you change your life, but only if you read it and apply what
you’ll learn. So please give a promise to yourself that you’ll read it and will not just rely on the
thin-air comfort pillow of the illusion that just having it is enough to improve your trading.

To make you keep your promise, I’ll bribe you with a gift.

I’ll give you the Link to sign up for your gift at the end of the book. But to unlock its page, you’ll
need a password which you’ll be able to type only if you have studied the whole book. Fair
enough?

Self-discovery is an essential prerequisite on your way to success. If you don’t accept this, don’t
even dare trading. This book is not written in the wooden language of some Technical Analysis
jargon. I’m sharing with you my life’s Philosophy which reflects to a successful trader’s mode
of being and thinking. Furthermore, I’m presenting to you four alternative Trading Attitudes :
the Daily Time-Frame’s Trading Attitude, the 7 Steps Checklist Trading Attitude , the
BUY/SELL Scenaria Strategist’s Attitude and the Scalper’s Attitude.

Identify the Trading Attitude that best suits your availability and character, mastering its
Technicals and say “hello” to your new Life :)

Happy pips!

Dr Sofia S.

BE
«Μέτρον πάντων άνθρωπος»
“Man is the measure of all things”
Πρωταγόρας
Protagoras

Most of us think that our net worth reflects who we are. But this is not just a wrong belief it’s
also a destructive way of looking at life. Our net worth represents what we have, and all “things”
we have are the ultimate result of expressing who we are through our actions.

Who we are and what we believe to be, molds our reality offering results shaped by actions.
The proper order of things is TO BE, TO DO, TO HAVE.

"Success is something you attract by the person you become."

Jim Rohn

Therefore the “more” you become, the “more” you get. But becoming is about taking action.
And because this book will show you how to change your financial landscape forever using
FOREX Trading as your actions’ vehicle, before we go to the “What to Do” and the “How to Do
it” we must start with the “Why”.

King Midas thought that if he could turn anything he touched into gold, he’d be the happiest
person on earth. When God Dionysus granted his wish, his joy was terminated suddenly as he
realized that food turned into gold as he touched it and that he might die from starvation. To his
despair, he even saw his loved ones turn into gold after his touch.

In his tragedy, he realized that his “Why” was false. He initially thought that if everything he
touched became golden, he’d BE extremely happy. He thought that gold’s power was in its own
material substance.

http://en.wikipedia.org/wiki/Midas

Once, as Ovid relates in Metamorphoses XI[14] Dionysus found his old

schoolmaster and foster father, the satyr Silenus, missing.[15]

The old satyr Silenus had been drinking wine and had wandered away drunk,
later to be found by some Phrygian peasants, who carried him to their king,
Midas (alternatively, he passed out in Midas' rose garden). Midas recognized him
and treated him hospitably, entertaining him for ten days and nights with
 politeness, while Silenus delighted Midas and his friends with stories and

songs.[16]

On the eleventh day, he brought Silenus back to Dionysus in Lydia. Dionysus

offered Midas his choice of whatever reward he wished for. Midas asked that
whatever he might touch should be changed into gold.

Midas rejoiced in his new power, which he hastened to put to the test. He touched
an oak twig and a stone; both turned to gold. Overjoyed, as soon as he got home,
he ordered the servants to set a feast on the table. "So Midas, king of Lydia,
swelled at first with pride when he found he could transform everything he
touched to gold; but when he beheld his food grow rigid and his drink harden into
golden ice then he understood that this gift was a bane and in his loathing for
gold, cursed his prayer" (Claudian, In Rufinem). In a version told by Nathaniel
Hawthorne in A Wonder-Book for Girls and Boys (1852), Midas found that when
he touched his daughter, she turned to gold as well.

Now, Midas hated the gift he had coveted. He prayed to Dionysus, begging to be
delivered from starvation. Dionysus heard his prayer, and consented; telling
Midas to wash in the river Pactolus. Then, what ever he put into the water would
be reversed of the touch.

Midas did so, and when he touched the waters, the power flowed into the river,
and the river sands turned into gold. This explained why the river Pactolus was so
rich in gold, and the wealth of the dynasty claiming Midas as its forefather no
doubt the impetus for this aetiological myth. Gold was perhaps not the only
metallic source of Midas' riches: "King Midas, a Phrygian, son of Cybele, first

discovered black and white lead".[17]

The Midas myth’s moral is that gold should not be the goal but the medium. Life quality is the
Goal. Our “Why” must be rooted to our desire for a beautiful and meaningful life. That
presupposes a personal system of values that places human on top. A beautiful life is consisted
of all things that make us and those we love happy. A meaningful life expands this happiness
status to as many people as we can reach.
So instead of measuring life’s value with gold as Midas falsely thought of, we should rather
measure it with our level of BEING. Because as the ancient Greek Philosopher Protagoras said
“Man is the measure of all things”.

http://en.wikipedia.org/wiki/Protagoras
Protagoras (/proʊˈtæɡərəs/; Greek: Πρωταγόρας; c. 490 – c. 420 BC)[1] was a
pre-Socratic Greek philosopher and is numbered as one of the sophists by Plato.
In his dialogue, Protagoras, Plato credits him with having invented the role of the
professional sophist.

He also is believed to have created a major controversy during ancient times

through his statement that, "Man is the measure of all things", interpreted by
Plato to mean that there is no absolute truth, but that which individuals deem to
be the truth. Although there is reason to question the extent of the interpretation
of his arguments that has followed, that concept of individual relativity was
revolutionary for the time, and contrasted with other philosophical doctrines that
claimed the universe was based on something objective, outside of human
influence or perceptions.

Another conclusion we can extract from Protagoras’s statement is, that we are the creators of our
reality and at the same time, we upgrade our reality’s status by upgrading ourselves. Actively
seeking ways to expand our personality and create a better reality we elevate our BEING to
greater heights. It is never too late to reach our goals materializing our “Why” and we all have
the birthright to achieve that, but from any time-point we start the journey, we must always keep
the end in our minds. If we don’t ….it knocks our door with bitter reminders now and then like
the bad news I got about Rena over the phone.

…Rena was diagnosed with colon cancer.

I lost myself in tears yesterday, had the most cinematographic dreams that night and woke up
with a severe sense of loss in the morning.
I first met Rena when I was 23 years old and she was 36. She had just divorced with the man I
had fallen in love with.
They had three kids together and their marriage had lasted 11 years.
She had the radiant personality of a gorgeous and sexy woman who wanted to drink life till its
last drop.
She couldn't be confined within the limited space of the roles that she should play in order to be
socially accepted.

Still life with pomegranate and pears 1890 | Paul Cezanne

I had filed a not so flattering image of her in my mind's database at that time. Now I feel so
ashamed for having been so arrogant.
Who was I to criticize her?
Who was I to make my stupid judgements on her?
Through the years, because of her warm, childish and open heart, I added softer touches to her
image. Her system of values and her life-attitude were a true challenge for mine. And quite
stupidly, I was insisting on my opinion that I was superior to her.

-How much time does she have?

-How much life does she have?
-How much time do I have?
-How much life do I have?

According to Einstein's theory of Relativity, time exists only because we exist being its
observers.
Therefore, time equals life.
The moment we come to life, the countdown starts .....tic....tac....tic....tac.....
My sorrow about Rena's news is not rooted to the medical facts of her disease. She may have
more time than me. Nobody has signed me a contract that I'll be alive tomorrow.

But what truly shocked me after I got her news, was the realization that she might have been
postponing her life, that she might have not lived it as wildly as she wanted ....and these thoughts
are bringing me down to my knees not because of Rena but because of myself.

I know that everything we do in life is a MAJOR DISTRACTION. We keep ourselves busy so

we can ignore the thought that the end is coming. Actually the end is attached to us like our
shadow. Wherever I go, my end follows me. I can't escape it.

There is a reason why I picked Paul Cezanne's still life Painting. This painting emphasizes
human presence through its absence.

Look at the paradox here. It seems that, the more we try to achieve success and be of value to
those we love, the more absent we make ourselves from their lives. We become the pomegranate
and the pears in their dish. Our full presence is being substituted by "still life". Are we doing
something wrong? Instead of placing our "NET WORTH" at the top of our hierarchy, maybe we
should place our "LIFE WORTH" there.

Our LIFE WORTH 's currency is love. The love we give and the love we get NOW....TODAY.

If you are as paranoid as I am, please stop doing this to yourself.

When you hesitate saying "I LOVE YOU" today, look at your shadow -the end- which will some
day eat you up and say "I LOVE YOU" .....now!

If you have been hesitating to apologize for long, look at your shadow -the end- and say "I'M
SORRY"....now!

If you have been into an ugly fight with a person and attorneys are making a party over your
disagreements, invite that person for a cup of coffee and a warm hug and stop this
craziness....NOW!

Do it before your shadow eats you up.

True quality of life is measured by the state of your heart. As long as your heart sings, the
moment your shadow covers you, you'll have no sense of loss or regret.
Chapter 1 : Protect Your #1 asset

“Healthy mind in healthy body”

Ancient Greek saying

So you really want to explore your potential and build wealth. But unless you protect your #1
asset, you’ll drill a hole in the water. That means you have to take proper care of yourself.
Eating right, exercising, meditating, playing and resting sound non essential but are the
cornerstones of your life’s quality because your energy levels depend on them.

We think that eating right is more or less something we all know about, but this can’t be further
from the truth. A very tiny minority of us know that there are basically two types of foods :
nutrients and fillers. And by the time we discover nutrients and choose to redesign our diet
around them, fillers have already made a huge damage to our health. The whole system we grew
up in, has brainwashed us about eating carbohydrates and go for low-fat diets. The truth is, we
should eat proteins and good fats, keeping carbs out of our body. Fats are stored only when they
are accompanied by carbohydrates. Otherwise they play a neutral role in our metabolism and
they actually help a lot of fat-soluble vitamins like A, D, E and K to be absorbed by our
gastrointestinal tract. Carbohydrates on the other hand, trigger the production of insulin which is
responsible for a long chain of metabolic and other disorders.

Poor diet or unbalanced nutrition lead to an unhealthy body which leads to a lower self esteem
and a bad psychology. Being at that state, thinking about success or pursuing it, is not a good
idea. You simply don’t have the energy and stamina required.

Staying fit is a complementary part of being in an optimum physical condition. Fitness is the
lever that moves the world and having abandoned your body to the shape of a couch-potato
doesn’t give you much of a leverage. Before you pursue success, you have to adopt a daily
workout routine showing some love to your body keeping it toned and flexible.

Meditation is the type of spiritual and mental reset that helps you shut out all types of life’s
noise, filtering your thoughts and bringing your mind into a relaxation mode. If you haven’t
tried it out, making meditation a daily ritual is an enriching choice. I would also take this a step
further talking to you about prayer. While meditation is about disengaging the mind from
thoughts, becoming their neutral observer as they march into our thinking space, prayer is the
ultra powerful connection with God, that recharges our soul’s batteries with the highest and
purest form of energy that is Love.

Play is about having fun, doing things with friends or people we love, that feed us emotionally,
put a smile on our face and make our heart sing. It’s not the quantity of play that matters as
much as the quality. When we feel emotionally balanced, our energy levels raise and that is key
to all kinds of endeavors, trading included.

I left rest for the end, because of its imperative importance to our brain’s health and performance.
Trading is a mental sport and a very demanding one. It has been documented by scientists, that
people who exchange hours of sleep with extra working hours, have the exact opposite results
seeing their performance plummet. A good 8 hours night’s sleep as well as an extra nap during
the day are extremely necessary high performance factors. During sleeping hours, our brain’s
physiology and morphology changes because new circuits of neural synapses are being built -
based on the repeated stimuli our brain has been exposed to during our waking hours,- increasing
our mental capacity. Information we absorbed is being processed and classified when we are in
“sleeping mode”. Sleep does not only help us replenish our energy reserves but it also helps
increase our mental capacity boosting our performance on demanding tasks like trading.

Chapter 2 : Pick your Life

There are two types of life, the life of a vegetable and the life worth living, a life beyond
limitations, mostly out of your comfort zone, full of challenges, trials, errors, failures,
expansion, growth, risks, and rewards.

-Is there a third option in between ?

-Sorry, there isn’t.

The life of a vegetable is extremely easy and because it’s a life you can live within your comfort
zone forever, all those who love you and care about you, parents, society, system, make sure you
pick it. Do they really love you? Well, parents may not know better. If they have lived the life
of a vegetable themselves, it’s logical to confuse slavery with security, because when the system
enslaves your time making you work for it, keeping you alive so you can continue serving it,
feels like security.

The system wants highly qualified cheap workers, preferably working part-time. The system
needs vegetables. Of course it loves you.

I grew up to live the life of a vegetable. My childhood years were dedicated to an endless effort
towards reaching the top of performance in my school and maintaining that status. While
gathering all distinctions available, I was throwing away my life trying to become System’s next
best model of the ideal achiever.

-Why did I use this dramatic statement “throwing away my life”?

-Because life is made of days and days are made of hours. Things we do during each day are
habits based on decisions we made once. Our decisions may have been right or wrong and that’s
OK when you are an adult because you are free to decide and choose. Therefore you are also
free to change a bad decision switching to a good one. But when you are a child, models of life
and their images feed your subconscious and you are forced to make choices others have decided
that are good for you. They systematically reward your habitual adjustment to their choices and
every deviation is either punished or condemned. When you are a child, everything represented
by the shell you call “family” becomes your norm. Since the “family” is programmed to offer
“new blood” of workers or servants to the System, you have no chance escaping their core
beliefs. And according to their core beliefs, you must work hard, for as much time as possible to
survive and offer to your future family the basics. If you don’t work hard for endless hours, you
are lazy and a disgrace to the family. Those who are ultra affluent and enjoy dreamy lives, are
either lucky or into some sort of criminal activity selling drugs, guns or evil services.

This is a totally wrong core-belief to the epicenter of the social values and principles model we
are being conditioned with. It serves the system that wants us to be as automated servants as it
gets, fully aligned to the rule of exchanging TIME, -our life’s currency- with MONEY.

Don’t think that only factories’ workers or 4hours part-time replaceable outsourcers fit to this
model. It’s so powerful that even people with extremely entrepreneurial attitude, all kinds of
professionals and top corporate executives make excellent material for the “paver”.
-Do you think you escaped the “paver” by owning a business?
-Think again.

You may be offering something to people who need it, can afford it and you also enjoy
interacting with them. That’s pure bliss and that’s exactly what kept me going when I was
having my 3 Medical Stores, except one tiny detail…...TIME.

If any kind of business or professional activity you do is profitable enough but leaves no FREE
TIME to enjoy Life, you’re actually digging a big hole in the water.

Countless extremely successful entrepreneurs, build great businesses, work on them -instead of
working in them- and then sell them or grow them into colossus. But the vast majority of
entrepreneurs, get trapped into their successful businesses just like I had been trapped in mine.

Actually, the trap is in your mind. The cage you’ve put yourself in, has its door open. The
question is “will you trade the security of your cage with the challenge of infinity out of it?”

-Are you the boss or the slave of your business?

-What determines that?

-TIME management.
There has to be a perfect balance between the TIME you dedicate to your business and the TIME
you dedicate to your life and guess where the bigger share of time should go. Even those who
accidentally stumble upon this principle, think that this can be settled on its own, randomly. But
the possibility for this to happen is as tiny as the possibility of throwing the particles of a swiss
watch up to the air and expect them to fall down perfectly matched and assembled into a swiss
watch. It will never happen. We have to design and plan Life taking care of its every tiny detail.
That’s why we should leverage our mind’s power in order to minimize the TIME that goes to our
business, maximizing the results that will enable us to enjoy much more TIME living life.

It takes a set of core beliefs around what is truly essential in order to eradicate “busy-ness” from
your business. Fooling others about how busy you are working hard as you’ve been taught since
childhood is the one face of this fallacy while you’re seeking external validation and social
alibis, fooling yourself that your life is on the right track by wasting your precious time like sand
slipping through your fingers is its other face, obviously a self-destructive one.

You throw yourself into the vicious cycle of a never-ending contest with invisible contestants
and a judge. This judge is a person in your life who’s approval and recognition means
everything to you, while failing to get is crippling. Think of that for a moment. If that one
person really loved you, would they judge and criticize you? Love is unconditional acceptance.
You don’t need judges in your life, only Love.

Instead of expanding you adjust and instead of demanding and claiming you compromise and
shrink.
You measure your life accomplishments by the expectations others have from you.

Living the life of a “vegetable” is seemingly safe, but is it?

You’ll come to realize it in best case scenario at your 80’s after having wasted away your
beautiful young life? How many chances to enjoy a truly exciting life will you have then? I bet
dramatically fewer than when you’re 20, 30, 40 or 50. Right?

Discovering your true identity may come as an event or as a journey of self-transformation

usually after an unexpected turmoil.

Well, I challenge you to do it now!

Chapter 3 : Daily Habits

You have the tremendous power it takes to turn your whole life upside down and re-design it
exactly as you want it to be. You hold this power in your hands it’s the POWER OF NOW.
You can’t change the past and you can’t control the future in the vague sense of it. You can’t
say “I’ll do this in 3 years and 2 months from now” and be absolutely certain you’ll do it. Years
are big amounts of time and depending on the details of a plan, months can be considered big
amounts of time too. Weeks also. But you absolutely control your NOW, this bright day. Every
moment of it.

Every moment you’re present in your NOW you become invincible.

-Why?
-Because your past can’t harm you. All your poor choices, your mistakes, your bad moments are
not just dead and inactive, they’re also being ignored, because you focus on the NOW. Also the
unknown future can’t scare you and you can’t feel stressed about it. Its mighty monsters and
threats get dissolved like smoke in the open air because you ignore them deliberately therefore
they don’t exist at the only place they have ever existed...your mind.

Being totally present in the NOW, you determine the rules of your life’s game in the form of
baby-choices you make bringing you one after the other closer to materializing whatever you’re
after.

There are TWO and only TWO types of people on earth : the excuses people and the results
people.

If you’re stuck in the past clinging on the “shoulda, woulda, coulda” hooks, feeling like a victim
of people and circumstances, submerged into a deep sea of misery, self-pity and depression, stay
there. I can’t cope with your excuses, neither can you. FOREX Trading is not for you.

As Dolly Parton said “get off your cross….someone needs the wood”.

If you belong to the result-ers, here is a simple yet effective action guide.

YOU are your best asset and present moments, your “NOW’s” are your Life’s Currency. That’s
what you’re giving away in exchange for money when you work for somebody else and that’s
what you should manage wisely if you want to re-design your life the way you dream it and
deserve it.

Your NOW moments will come and go ….come and go…...anyway. You have the option to let
them pass by and surrender to the circumstances. When you’ll find your life spinning without
orientation, you’ll always blame the torque others gave you pushing you on purpose -their
purpose- or by mistake -your mistake of standing in their way. The future you dreamed will
never become your reality because walls, floors and ceilings are not good in creating futures out
of thin air. Walls, floors and ceilings have absorbed your wasted NOW’s imprisoning them
forever.

Theory is nice but putting theory into practice is even nicer. So far we have spotted the one and
only reason why the vast majority of people fail in life or specifically in Forex. Success process
is the same everywhere.

People fail not because they don’t try, or don’t want enough or aren’t skillful and competent, or
because they don’t work hard. They fail because their wasted NOW’s beat their creative ones.

People fail because they start with enthusiasm and quit in a few weeks, days or hours. They
leave nice projects un-finished. They let their NOW’s slip like sand through their fingers and
instead of leveraging them, they rely on prayers and wishful thinking.

Prayers and wishful thinking are good, only after you’ve done your daily homework.

So here is an EXERCISE for you.

You’ll need a pocket notebook and a pen. I know you love technology, I love it too. This
exercise is a personal thing and has nothing to do with technology that connects you to the world.
So let’s keep it strictly personal.

On this notebook I want you to keep track of all your daily habits for one week.
During the day you will be writing only the habits and their duration in minutes or hours
whatever is easier for you. When you go to bed, before you fall asleep, take five minutes to
classify each habit as a physical one that is related to the body and its activity, as an emotional
one that relates to how your heart feels, as a mental one that is associated to mind-work, or as a
spiritual one that is related to your higher self, the part of you that dreams, visualizes,
philosophizes and makes creative plans. Then decide if each habit is good or bad for you. If it is
good place a plus symbol next to it. If it’s bad, place a minus. Good habits are those that benefit
us and push us higher on our way to success and happiness. Bad habits are our saboteurs.
They’re small enough not to kill us today but adding up day by day for years and decades they
transform us into human-trash.

Keep habits that make you so fantastic you’d fall in love with yourself at a heartbeat.

The scopes of the exercise are two. To spot your bad habits and replace them with good ones
and to determine how much time you can dedicate to Trading without causing any pressure or
unbalance to your daily schedule. Ultimately, you should design your set of daily habits in a
way that is absolute fun for you and nothing else. Depression which is associated with the past
and stress which is linked to fears of the future, have no place in your life. Use the power of
NOW to eradicate them. Focus on your TODAYS and make the most out of them having fun in
the process.

Bad habits can’t be deleted. There are whole circuits of neurons created in our brain especially
for each one of them, coordinated by the basal ganglia so that these habits are being properly
supported in terms of full automation and of course you don’t have to think about repeating
them. They come effortlessly in forms of patterns which you can’t break, only replace parts of
them.

Actually by establishing new healthier habits, you re-shape your brain’s morphology and
reprogram its physiology. If you stick with your new improved habits for a few months, your
brain’s scans would show you are a brand new version of yourself. Do that!

Chapter 4 : New Habits = New Life

"We are the product of our choices”.

Anonymous
The reason I insist in replacing old self-destructive habits with new self-empowering ones is not
theoretical. If theory was all I wanted to share with you, I would have stopped already. But
theory without action is just wishful thinking and here we want tangible results, not just
impressive conclusions and nice wishes.

So, I thought I should give you some ideas and a practical guide towards shaping your own new
self-empowering habits with real-life examples which you may use as they are or adjust them to
your liking.

I want you to watch the Youtube VIDEO “5 Things Successful people do before 8am” from
Terri Savelle Foy which you’ll also find on the RESOURCES Section of the book.

Go ahead and hate me as much as you want, but I’ll keep hammering the truth down to your head
till you stop resisting and accept it : “if you truly want to achieve a SUCCESS status, you have
to commit to a SUCCESS ATTITUDE which breaks down to DAILY HABITS that enhance
your physical, mental, emotional and spiritual capacity kicking you out of your comfort zone”.

It is SIMPLE but it isn’t EASY. Success is not easy and comes with a “price”. Very few people
are determined to commit paying the price. That’s why only a tiny percentage of people are
successful.
And the best time in the day to establish new habits is early in the morning. As Terri Savelle
Foy says, we must not compare ourselves with other people and what they’re doing. If we are
determined to change our life, making big dreams, it means we have to make a big commitment.
And that commitment to step into our new brighter life starts the moment we push the alarm
button every day.

Waking up early in the morning is not

easy. Looking forward to the exciting new
day which will be designed as we want it to
be, shaping new realities out of nowhere with
our creativity and determination, is not
something that “masses” can do. It takes
commitment.

We have to be our truly special self, the

brilliant individual we are meant to be, not
the hypnotized socially conditioned and
media-fed humanoid that runs through its
daily routine like hamsters on their mill.

Praying as soon as we wake up in the morning is not easy. Media have poisoned our minds to
believe that even talking about God is utterly “un-cool” and if we really want to talk about
something superior than any cheap and slutty celebrity’s “posterior”, we should call it “the
Universe”.
Well, I challenge you to be UN-COOL. The God our parents and grandparents believed in is the
God that was keeping couples happily together and
the magical glue to families where love was the
primary currency. Because God exists inside us
making us the unique magnificent creatures we are,
being the source of all our blessings and incredible
powers, is the one we should turn to in order to
reconnect with our inner infinite potential and
express it to our outer world . Without faith in God
we are lost souls like these puppets with tattoos all
over their bodies, pierced tongues, navels and other
parts, drug-addicts behavior, no moral values,
inexistent education, spiritual coma, behavior
which is synonym to being possessed by daemons,
used by Hollywood as “models” for the new
generations, while they need special care and in most
cases urgent hospitalization.

Jeff, one of my FXHOLICS sent me his beautiful

morning prayer to share it with you and I thank him
for that. At first, I made a nice graphic in order to
insert the Prayer’s text in the Book. But then, I
thought that you may be not Christian and for
religious reasons, you might feel that Jeff’s prayer may not resonate with you.

But because I want to give you a sample of a fantastic Prayer, I’ll choose an Ancient Greek
Prayer which was given to the Ancient Greeks by their Gods thousands of years ago in the form
of an Alphabet...the Greek Alphabet.

This Book is about FOREX Technical Analysis and decoding the Market’s behavior, so giving
you this precious morning Prayer to the Sun, which is encoded in one of world’s most ancient
and still alive Alphabets makes a better fit for this book because it can’t be linked to any present
Religion or any spiritual diversities between us :)

Here it is :
The morning prayer is the art of letting our heart sing like a bird full of joy and gratitude for
being alive and for being capable of materializing our dreams. It’s about Thanking and then
Asking for guidance and reassurance. And of course it’s about Believing and expecting what’s
best for us and those we love and care for.

Exercising in the morning is definitely something only few can stay disciplined to. It is not
bad if you have scheduled your gym hours at late afternoon or at night, but including any kind of
exercise regime early in the morning is a true energy booster and makes a big difference. After
drinking water ideally with a couple of lemon juice drops in it, you can go for your early-
morning workout routine which can be as exotic as the 5 Tibetan Rites, also called “the Fountain
of Youth” , or as common as walking or jogging.
Cats are a great example to follow and copy in terms of body-stretching and toning on a daily
basis. Basically, there are two ways of doing your daily exercises. You can either exercise in
public or at home. Going to the Gym, running, jogging, biking or walking are kinds of exercise
you do publicly.

I started walking one hour per day along the beach, three years ago, when I decided to get back
in perfect shape, also adopting a healthy nutrition program. Walking for at least one hour per
day, every day will have a dramatic impact on your well-being and body shape too, even if you
don’t have a fantastic beach to walk along like the one I have, do your walking around your
neighborhood’s blocks. The results will be amazing and I’m sure you’re going to love this habit.

But don’t underestimate the power of workouts at home.

I can tell you that jogging for no more than 30 minutes every morning in the middle of your
room is an absolute fat burner and a very fast body-shaper ...or should I say body-transformer?
Of course, it isn’t as easy as it sounds because you’ll want to quit after the first 5 minutes, you’ll
hate yourself after 10 minutes, you’ll hate me after 15 minutes and you’ll probably hate the
whole world after 20 minutes. But if you keep jogging till you complete a 30 minutes round, I
guarantee that once you stop, although you may not have sweated much, you’ll see drops of
sweat exploding out of your forehead, your whole body will be burning and the sense of
accomplishment will be incredible.
Recently, I decided to go stretching at
home using an Exercise Ball and below
I’m giving you a LINK to one of the
hundreds of Workouts you can find on
YouTube if you are a lady (you can
find the link at the RESOURCES
Section too).

There are tons of YouTube Workout

VIDEOS in case you are a gentleman
interested in weightlifting at home or
upper body workouts at home that
literally tone up all your muscles (you
can find the links at the RESOURCES
Section)

Here is a set of 10 excellent Exercises for Body strengthening which you’ll find absolutely
addictive. You can do Yoga at home, you can use ONLY your body’s weight to train every
muscle group to the ultimate degree and in general, all it takes is C O M M I T M E N T.

After you finish your morning exercise routine, have a refreshing shower and let the water clean
your body taking away all toxins. Treat yourself with the luxurious habit of spreading essential
oils to your face and body, a ritual that only takes a few minutes but gives your skin a feeling
that words just can’t describe.

Meditating and visualizing early in the morning is not easy either. While praying is
connecting with God, meditating is about introspection. After having finished an intense body-
stretching and sweat-breaking workout, completed with an energizing shower, now it’s time to
relax and concentrate.
 Having sold well over 50 million records, including the platinum selling Mr. Blue Sky
(music video), Jeff Lynne knows a thing or two about creating hit records.

When asked, where he gets his inspiration from he replied, "Tea."

Lynne says that the most important part of writing a great song is to make sure that he
tunes himself before he tunes his instruments.
Before he starts writing, Lynne sits on his own in his garden in Beverly Hills with a cup
of tea and just lets his mind wander. By the time he's finished his cup of tea he usually
has a riff or a phrase that is the starting point of a song. Sometimes it requires a second
cup of tea, but never a third.
The likes of Picasso, Mozart, Einstein and many other greats have championed the
practice of silence and solitude as a source of great ideas.
Research by neuroscientists has backed what Nikolas Tesla, inventor of the electric
motor, said over 100 years ago that,
"The mind is sharper and keener in seclusion and uninterrupted solitude. Originality
thrives in silence. Be alone, that is the secret of invention. Be alone, that is when ideas
are born."
The clue to the source of inspiration lies in the root of the word itself, in - spirit.
As well as being a source of creativity, I find that being still and tapping into your spirit
at the beginning of the day, increases your resilience for the rest of the day and muffles
the madness.
from Sunil Bali’s Blog

Being relaxed and focusing on our breath in silence and serenity, we slowly turn into observers
of the parade of thoughts that pass through our mind trying to “Tidy Up” the usual mess caused
by having been bombarded with all kinds of contradictory influences and information. Deep
Meditation can take us into the scenery of our materialized dreams, placing us to the heart of our
life’s movie for which we wrote the script, we are the directors and also play the key role. Being
at this state of connection with our higher self, we get to review our dreams and goals.

They say “dream and make art in abundance, live in secrecy and balance”. And if you ask as
many successful people as you can talk to, they’ll tell you that “fake it till you make it” is a key
ingredient to success. That means, you should deliberately and repetitively -meditation time
every morning is the best time to do it- dive into the tiny details of how the reality you are
pursuing is supposed to look like, sound like, smell like, taste like and feel like as if it was the
only reality you experience right now. Meditation cleans your mind from the “clutter” and
facilitates visualization which is the projection on your mind’s main screen of the set of images
that represent your perfect life. Subconscious mind, being immensely susceptible to
“imagination” because images are its “food”, consumes every little piece of the information you
give and being unable to make the distinction between reality and imagination, it gets the signal
that this is the life you’re currently having, therefore it should be protected, maintained and
enhanced.

Having a great and healthy breakfast sounds obvious but to most of us it isn’t. Quite often
we skip breakfast because we’re in a hurry for all the wrong reasons which seem to be right at
that moment. So after the long hours of fasting during our sleep, we leave our body
undernourished by not breaking the fast (break+fast=breakfast). We would definitely fill our
car’s gas tank before taking a long trip, but we neglect at the blink of an eye replenishing our
body’s energy reserves at the beginning of one more demanding day. And when we do it, we
prefer to throw trash and fillers in our stomach rather than nutrients and energy boosters.

Avoid sugar, avoid artificially inflated foods based on flour, dough or starch that are fillers with
zero nutrients. Instead of croissants and toasts with tons of carbohydrates and bad fats, I go for
boiled eggs, barley rusk, feta cheese, avocado with lemon and extra virgin olive oil, olives, plain
white yoghurt, kefir, almonds and honey with some ground cinnamon on top, nuts, black raisins,
dates, greek coffee or loose leaves tea, orange juice, a banana or an apple, melon or grapes
depending on the season. These are some of my preferences for a breakfast full of power foods
and truly delicious. Probably you have even better alternatives in your country. Cold cuts,
sausages, bacons and hams or fried foods, have no place in your plate and in your stomach. It is
my personal belief that, when there is no violence in the way we collect our food from nature and
prepare it, food will be a source of rich pleasant flavors and gentle nourishment for our body.
Also remember, that your food must give a chance to your teeth and gums to function, unless if
you are a 4 months old baby in which case you are perfectly excused to eat only soft mashed
food.

Be extremely selective of what you put in your body. Taking good care of your nutrition, as well
as exercising for 30-45 minutes per day at least five days of the week, are the two key factors
that guarantee an excellent physical condition and a perfect shape. On the other hand, being
overweight and seeing sagging breasts, inner thighs and inner arms, or tubes of fat around your
stomach, every time you look into the mirror, will hurt your self-appreciation so deeply that no
FOREX Success or any other kind of financial success will be able to ease the pain. And I really
suggest you start by fixing your body before you start Live Trading because Markets are such a
tough arena, you’ll need all the self-esteem and self-appreciation you can get in order to keep
yourself standing up and moving on. When you get there, you’ll agree with my suggestion and
you’ll understand why love for yourself should come first.

Listening to a faith-building message sounds simple but doing it every day requires
commitment. It may be Earl Nightingale’s inspirational and motivational messages, or it may
be a string of Affirmations you have written on a piece of paper and are bound to repeat at least
20 times per day giving to your subconscious mind the stimulus it wants to get going. You can
listen to the message or repeat the Affirmations during your exercise or while driving to work,
but make sure you listen to it as part of your early morning routine because it will put the rest of
your day in the right orbit.

Read
They say “leaders are readers”. And you may ask “but how can any sort of leadership apply to
the solo sport that’s called FOREX Trading?” This can be the topic of a very long discussion but
I’ll keep it short highlighting only what you should always keep in mind.

You are the average of your Five Best Friends. That stands true for your pursuits, your degree of
success, your financial results, your net worth, the magnitude of your achievements, your
relationships statuses and your degree of fulfillment.

Being interested in SUCCESS, I guess Warren Buffett or Bill Gates may not be among your Five
Closest Friends and probably neither any of the FORTUNE 500 CEO’s is or may be in the near
future.

-Does it mean you are doomed to mediocrity forever?

-Not if you “cheat” on your limited reality going around it using the alternative of reading.
Because when you read a book written by a successful person which you might never have the
chance of approaching let alone meeting, you actually put this author inside your life’s inner
circle of top-influencers. The more time you spend every day reading Books from people who
are already successful, the more you substitute your “below average” friends with TOP-LEVEL
ones. These new TOP-LEVEL friends of yours share with you their thoughts about success,
their philosophies as well as their methodologies about getting there. And you can have all their
wealth of knowledge and experience at your fingertips by READING their books. So practically
you can enrich your Best-Friends circle by adding 12 new TOP-LEVEL ones each year assuming
you are going to read at least 12 new Books each one 300pages long, written by great Authors on
the topic of Success. That breaks down to reading one Book per month or 10 pages per day.

Reading 10 pages per day while you’re having your Breakfast, is a habit which can be a powerful
success catalyst on its own.

These powerful minds will gradually re-shape your way of thinking awakening your best values
and resurfacing the leader in you. Although FOREX Trading is a Solo Sport, you’ll need to be a
true Leader in order to constantly be in control of your Trades, you’ll need to think like a Leader
in order to “decode” Market’s behavior, you’ll have to be a Leader once you start building
wealth because now you’ll have power and an increased degree of responsibility towards a
broader range of people around you unless if your only ultimate goal is to eat, drink and wear all
your money till the last penny. One little reminder though, your stomach is only as big as your
fist and so is your heart. Make sure you manage both of them wisely.

Morning kiss. If you agree that one word text message on your mobile in the middle of an ugly
and stressful day can suddenly turn it into the brightest and most beautiful day of your life, then
you most possibly think that Love is a mutual thing. This is what our Society wants us to believe.
This is what the System wants us to live by. Shared Love, shared Lives, common feelings,
equality, homogeneity, ...a mass that is aligned to the same living, feeling, being patterns. No
individuality, no uniqueness, no extraordinary people with extraordinary lives and extraordinary
feelings.

But we are not numbers and we are not ordinary. Each and every one of us is a unique and
special star, a whole precious world on her/his own.

In Love and in all kinds of relationships -even in FOREX Trading when we interact with the
Markets- the responsibility of the Relationship is not shared 50-50% or 80-20% or whatever the
System likes to bubble about.

Each one of us carries the FULL Responsibility, 100% of the Relationship’s status. If we don’t
do it, it means we leave it up to random circumstances and instead of being 100% in control of it,
we choose to be the victims of the circumstances.

We have to start by giving Love with all our heart and all our being, counting our significant
other’s breaths and getting under their skin. Only through taking 100% of Responsibility, we’ll
be at the receiving end of this Relationship because instinctively, our Significant other will want
to reciprocate exercising their 100% of Responsibility for the Relationship.

This pattern is active on all kinds of relationships. It works on our relationships with our
children, our family, our friends, our colleagues, our clients, everyone. We have to Start by
Giving without setting the barriers of expectations.

And we must Love unconditionally. Because the people who we call ours need us more when
they are in a sort of “hell” rather than in “heaven”. And they need our Unconditional Love, a
hand to hold, a shoulder to lean on a kiss to recharge their energy reserves with.

“I will always mourn -- do you hear me? -- for you,

alone, in heaven…”
The Monogram - Elytis

And here comes my theory about the true essence of a kiss.

When we breathe, during inhaling, we can’t speak because it’s “thinking time”. Thinking is an
ethereal process which is the result of our brain’s synapses getting selectively energized by our
immortal spirit, our core essence which we call “soul” the “psyche” as it is called in Greek
defined by Aristotle as “entelecheia” which means “having a scope”. Our soul’s scope is our
spiritual awareness our empowerment till we reach perfection. So when we kiss someone we
love, we exchange soul-energy and that is vital for our very own existence. We call what we feel
“emotions” but actually they are energy upgrades of our soul after having done energy exchanges
with the other person’s soul.

That’s why it is important to kiss our loved ones in the mouth, looking straight in their eyes
telling them how special they are for us every morning. Our lips seal the passage of energy from
one to the other. They need our Energy, we need theirs.

Because we Love and feel Loved, life’s purpose becomes solid.

In the Markets’ jungle, we must go with our emotional capacity at its highest peak and our sense
of purpose strong and clear.

Personal “gorgeousness-meter”

There is a person who will be with you till your last breath, a person who will tolerate all your
whims and get along with all your dark sides. This person desperately needs your attention but
most of the times gets ignored and mistreated. This person craves for your appreciation and in
return is willing to give you the whole world but instead is being confined within the inhuman
cell of contempt, often for decades. This person is YOURSELF.

You may think that the outer landscape of your everyday reality is the one that influences your
inner landscape, that of your soul. You desperately seek a change of scenery, a change of
companion, a change of job, a change of neighborhood, thinking that this is the way to improve
your mood.

But in reality things work following the exact opposite pattern.

Your bad relationship with yourself, your low self-appreciation and self-esteem, your feelings of
guilt and limitations others have planted into your mind, push you to treat yourself like an enemy
rather than like your best ally.
I’m not going to lecture you on a topic which goes far beyond my field of expertise but I can
share with you a little habit I have developed since I made peace with myself and rediscovered
the Force of Nature that flows through me as it flows through each person.

After my divorce, I went through a seven years long depression which I managed studying
neurosciences, reading tons of books, connecting with people via the Web and having my
children’s love keeping me in one piece. As soon as I decided to forgive myself for my past
mistakes and restored my Self Image putting it at the highest possible position, healing process
accelerated and within the next few years my whole life changed.

You see, everything we do in life is being filtered through our Self Image. If it is not aligned
with it we drop it at the speed of flash. If our Self Image is that of a mediocrity that can never
accomplish anything special and struggles to make ends meet with an annual income at the
region of $20000 or less, no matter how hard we’ll try and how disciplined we’ll stay during
FOREX Trading, we will never be able to push the annual income bar higher because this
possibility will be automatically rejected and sabotaged by our limited Self Image.

And if you allow me to get a bit blunt, let me tell you that our whole Life is about Marketing and
how well we are able to sell our Self Image so that other people buy our products, services or the
idea of being in our presence.

Every salesperson will tell you, that if you don’t appreciate what you’re selling, your sales
figures will suffer. If you don’t believe in yourself, why should others believe in you?

Yes, I know, FOREX is a solo Sport and you’re not supposed to sell anything to anyone at least
on a face to face manner. But because it is a Solo Sport, YOU are the Team, the Coach and the
Audience at the same time. So if you haven’t established a harmonious relationship with
yourself, don’t even dare to think about Trading FOREX.

You need to truly like and love yourself and I don’t mean the psychopathic kind of narcissistic
self-centered love. I mean the healthy self-acceptance and appreciation that is your birthright
and something you deserve a priori on an unconditional basis, just because you exist.

How many years will you let pass till you realize what a gem YOU are today?

So here is a quick morning routine I really enjoy following.

I go to my mirror, look myself in the eye, smile and say words of Love, Encouragement and Self
Appreciation like :
“I am so proud of myself and all I have achieved so far”.
“I know I can do whatever I set my mind on”.
“I’m a truly great trader and I can be a real star”.
“It’s OK if I had a few failures. Failures are setting the path to my meteoric success”
“Success is my only option because I can and because I deserve it”
“I love myself with all my past mistakes and I feel richer because of them”
“I admire myself because of my courage and perseverance”
“I’m a Fighter”
“I’m a Winner”
“I know I can shine and I’ll shine”

I may even kiss my reflection in the Mirror and while you’re laughing, let me assure you that this
has worked miracles for me. Having this great relationship with myself, loneliness is an
unknown term in my life although most of the time I’m on my own either because my Man is in
another country or children are not around.

I call this funny habit of mine my “gorgeousness-meter” but you can name it as you like. Every
morning I recharge my self-appreciation batteries before I throw myself into the Markets
Battlefield. Think about doing the same. The difference is tremendous.

● Before going to sleep routine

How you close your day is equally important with how you opened it. Being an active FOREX
Trader means that your day is full of tension. I know you do your best to keep your psychology
positive and your mood high but stress is all over the Marketplace and chasing a constantly
moving train, isn’t quite the kind of a funny scenario.

Most of us, FOREX Traders or not, tend to close our day with a soul-consuming replay of the
things we should rather forget. But instead, we can’t help sinking in the muddy waters of self-
pity. It feels so normal. And it is normal because since the moment we were born, crying was
the spontaneous reaction. Laughter was something we had to learn a few months later. Crying
and self-pity is the force of entropy pulling us back to non-existence. It’s easy to quit and let this
force kill us passing through a sweet lethargic state. The hard thing is to resist and choose to stay
upbeat, to laugh, to be grateful, to dream, to plan, to visualize, to push ourselves deliberately
ahead to the road of self-actualization being the unlimited potential individuals we truly are.
 As late Dr Wayne Dyer says on this “Last 5 Mins before
You Sleep” VIDEO, referred to a statement found in the
Book of Job which goes like this :

“In a dream, in a vision of the night, when deep sleep falls

upon men, while slumbering in their beds, then He opens
the ears of men and seals their instruction”

Dr Wayne interprets the scripture explaining that during

our sleep our Subconscious Mind is busy at work and it is
about to materialize whatever our final thoughts before
going to bed have been, not being able to tell the fears
from the hopes, reality from imagination. So it is very
important, to embrace the right attitude which will bring
us the best results. By going to bed with positive thoughts
and feelings, having designed in detail our next day giving
it the ideal shape and “colors” just before we fall asleep, we practically are
placing an “order” with our Subconscious mind’s hyperactive “realities factory”
to the right direction, that of our wishes and dreams instead of attracting more of
what makes us sad and frustrated.

I like to close my day with a glass of red wine. Enjoying the wine, I let my imagination’s
horses run wild. I feel blessed and fortunate for being who I am and riding the wave of
my enthusiasm, I paint next day’s images and feed my Subconscious Mind with them.
This scheduling doesn’t take more than 5 minutes and when sleep falls over my eyes, my
instructions are there, ready to be “sealed”.

Chapter 5 : Fear and Bath Tub

And now that we discussed about re-designing your life by replacing bad habits with good ones,
let’s be more specific about the business of FOREX Trading and the best ways to approach it so
that success is at your grasp.

-Is FOREX Trading a business?

-Yes. It is the type of business where everybody else’s business is your business, because you
trade money and every business uses and needs money.

Now, if you don’t see FOREX as a Business you better change this approach immediately. And
if you don’t want to change it, please read no further. This book is not for you.
FOREX Trading is the ideal type of business which if done right, taking only one trade per day
on only one pair and going for a handful of pips according to a very well designed plan, having
mathematics and time as your allies, you can make as much money as you want being free for
the most hours of your day to enjoy life.

Those who trade having sweat popping on their forehead and holes opening in their stomach
because they’re throwing to the Markets their savings, their kids’ college money, their mortgage
payment money, or borrowed money, are nothing more than gamblers. Trading should be fun.
If you don’t have fun while trading, it means you don’t know what you’re doing so maybe you
should stop doing it right away.

Unfortunately, I have to say that since I started familiarizing myself with FOREX and for the
first few years - yes, years- I had the most ridiculous association with it. To me, FOREX
Trading was nothing more than a hobby, an exciting activity that I wasn’t very proud of, without
knowing why and on the other hand, it was making me feel as a member of a secret society of
the few and the special who had access to a Market with a turnover of Trillions per day.

I was imagining those other members of this Secret Society, being mostly men around the age of
sixty who were true aristocrats, playing golf every day, enjoying top luxuries and probably
having some sort of antennas or green skin or something that might be indicative of their
outworldly intelligence that enabled them to sense which direction the candlesticks would go
next.

But as soon as I made my first unexpected profits which evaporated even faster than made, I
realized that the majority of independent traders were young students, single mothers,
entrepreneurs, corporate executives, teachers, cooks, factory workers, nurses, shops-owners,
were people from all walks of life and all ages,….were just like me….actually were parts of
me...snapshots of myself during various steps of my Life-Journey.

A wild hunger erupted inside me. The hunger to succeed. I wanted to learn as much as possible
about the science and the skillful art of trading. I daydreamed of the dynamics of geometric
progression and thought about the power of LEVERAGE in FOREX. I started calculating pips
and dollars with my pocket calculator till there was not enough space for the 9 and 10 figures
amounts I was discovering. I started using time-models where the perfect trader was trading 18
hours per day making endless pips nonstop.

Then, I lost myself in dreams of a billionaire’s lifestyle, having all life’s minutiae being taken
care of by a secretary, a butler, a personal trainer, a chef…a small army of assistants each one
assigned to do for me the best possible on a particular field of services so I can invest my
precious time in doing things that take me to my highest level as a person and enjoy life through
a cascade of experiences that constantly keep my comfort zone expanding. I lost myself in an
ocean of love. My billions had the power to change the lives of many people. I saw hands
touching me, eyes smiling….I heard laughters and words of joy and gratitude. I was in heaven.
I wanted to bring this dream into my reality. Every tiny part of it. I had to take action.

First, I should learn FOREX. This would take time and during that time, I would keep doing
what I was doing to keep the bills paid and bring food to the table. I was right about that part.
Soon FOREX Trading and Technical Analysis Books started coming in AMAZON carton boxes
of five and seven books at a time. What I discovered though was that I could easily put them in
one of three categories : a) those written by successful traders who had not the communication
gift and couldn’t pass their knowledge to the reader in an easy to understand and act upon
manner, b) those written by people who didn’t know a thing about successful FOREX Trading,
because when you really know something, you can explain it effectively to a 5 years old child
and reading those books I could easily forget my name adding more confusion to an already
complicated topic and c) those written by people who wanted to prove their expertise in
Technical Analysis and deep Mathematics.

Then I thought that I would need a decent amount of money to start LIVE Trading with, once I
would have learned how to trade. I was wrong here.

Eleven years fast forward, I had lost more money than I would dare to admit, but managed to
“break the code” of FOREX Trading. This code is what I’m sharing through my FXHOLIC
System of Trading and because I noticed that giving Signals to my APPS Users was not enough
help and not everyone could join my interactive Training Programs, I decided to create two New
Series of Books, “Happy Pips” and “Boring Trades” sharing my thinking process applying
FXHOLIC System step by step over and over again , one trade setup at a time.

Fear is the emotion generated by the sense of the unknown... the unexpected. It's one of the self-
defense and self-protection mechanisms ingrained in our psychosynthesis being reproduced by
situations and environments physical or imaginary, that represent threats.

Fear is what a new Trader feels because of their lack of knowledge and the possible
consequences this may have on their money.

When asked what's the biggest thing that stops people from living their dream, Sir
Richard Branson replied, "The fear of failure."
 Yet this is a fear we're not born with. We're actually only born with two fears, the fear of
falling and the fear of loud noises. All other fears are learned as we grow up.

Young children are happy because their minds haven't downloaded the file "what could
go wrong." They're more awake to each moment than most adults because their world of
wonder isn't shrouded in the mist of conditioning.

Fear of failure has people running the same mental patterns, because as soon as they get
to the edge of their comfort zone, their psychological handbrake comes on.

The problem with the comfort zone is that nothing ever grows there, apart from
dissatisfaction and waistlines.

The paradox of living a great life is that you don't just learn to do things better; you also
unlearn all the energy sapping, dream stealing habits you've picked up in your life. You
keep dropping them until you find the real, authentic, natural you, and that's when the
magic happens.
Of course, we all have times when our psychological handbrake is on. But to take it off,
simply do what children at nursery school do ..... love, laugh, play and create ..... every
day. ( From Sunil Bali’s Newsletter )

Fear can be tamed by taking action. Actually you have to do what you're most afraid of in order
to terminate your fear of it.
-But what if doing what I'm mostly afraid of I lose all my money?
Well...what you're afraid of is taking the risk to Trade without knowledge. And this is a bad risk
which justifies your fear.

The gambler takes a bad risk shooting in the dark and hoping he'll get lucky.
Good risk is the absolute prerequisite of success. It is called pre-calculated risk. Getting the
results you want at once without multiple repetitions of your efforts and without going through
failures, is almost impossible. Therefore, focusing on your "failure rate" towards reaching your
goals is essential.

That means, you must calculate the risks you have to take -the failure rate - and to do that, you
need knowledge.

The Fear of losing your money Trading FOREX is a healthy feeling and it can be eliminated
through Learning Process. Learning to use the Tools of Technical Analysis as part of your Risk
Management Arsenal is what will help you replace fear with confidence and soul-consuming
stress with fun.

It sounds simple and it is. But as simple it is to do it, is also to NOT do it.

So practically, it all boils down to Learning how to Trade FOREX. And that's the point where
most of the new Traders get trapped, for two reasons : they seek knowledge from the wrong
sources or they try to learn the wrong way .

-Would you try to learn to swim in a bathtub?

I know it sounds ridiculous and you may laugh but most of new Traders are doing exactly that.
If you think why you'd never learn to swim in a bathtub, you'll realize that it's because in a
bathtub there is ZERO RISK. And I mean the Good Risk that helps us succeed.

Traders, bite Brokers' "bait" about DEMO-Trading and they start DEMO-Trading. But because
a DEMO-Account has nothing in common with a Live Account and has ZERO RISK, they soon
open LIVE Accounts -making their Brokers' dreams come true- and lose all their money in a few
months because they haven't even started Learning.

To Learn, you need to take Pre-Calculated Risks using real money. Your Success passes through
a sequence of failures . In other words, Failure is your Ticket to Success. We have to make it
Cheap.

DEMO-Trading is useful for familiarizing yourself with Trading Systems and testing their
effectiveness when Trading Systems’ Rules are applied.

To recap, Failure is necessary tool towards Learning to be a Successful FOREX Trader and if a
DEMO-Account doesn't give you the chance to fail, it means you must learn Trading with a
LIVE Account.

That's right. But before you hate me, let me draw your attention to a sequence of numbers :
100 -- 200 -- 400 -- 800 -- 1600

Starting from $100 I need 4 Doublings to make $1600. Rewarding myself with $600 and
leaving the amount of $1000 in my LIVE Account, I'm only 10 Doublings away from my 1st
Million.

What a fun way to Learn FOREX Trading and make money in the process! Well...that's
FXHOLIC's Way to FOREX Success :)

They say it takes some time to do great things. To do the impossible it only takes a bit more time
:)

Using FXHOLIC's Equation which we'll discuss next, we can learn how to determine the size of
our position, keeping our lots size to equity ratio fixed, we'll determine our Daily Pips target
which will not exceed 20pips and we'll estimate in how many Trading Days we'll be able to
Double our Account's Money.

In FXHOLIC Equation, we symbolize with the letter "d" the number of Trading Days we need in
order to Double our Account's Equity. Trading is about confidence and positive psychology.
Trading should be fun. When confidence doesn't come from the fact that you know how to
Trade, we inject it to your mind starting with a Micro Account and $100. How dramatic impact
on your Life can losing a big part of your $100 have? Can it destroy your sense of fun?
Absolutely not.
On the other hand, it may take you 5 months to turn your first $100 into $200.

-Do you know what you're doing all these months?

-Learning in True Market's Environment.

Next Doublings may be shorter and usually are much shorter but by the time you'll have turned
your initial $100 into $1600 earth will not be big enough to hold you:)

When you'll be on your 7th Doubling, going for $8K, you'll not only belong to the Elite of 5% of
world's best Traders, but what's more important is that you'll have established the DAILY
DISCIPLINES of the Repeatable a Scalable Process of Incremental Progress translated into
BABY STEPS.
-Is it Simple?
-Yes!

-Is it Easy?
-No!

Chapter 6 : Do you have what it takes?

“Science has demonstrated that humans have a limited supply of WILLPOWER.”

Scott Adams “How to fail at almost everything and still win big”

Although this book is being written with the beginner in mind and the intention to make every
single concept comprehensive for everyone, there really are some character traits which you
should have -or try to hone- so you can increase your possibilities for success and shorten the
path to mastering the trade which is a combination of skillful thinking, thinking skills and artful
implementation of applicable knowledge.

But traits will be helpful and knowledge will be applicable on the condition you manage your
limited supply of WILLPOWER wisely, so that you avail even a small part of it to making
constant progress with your trading. If all your WILLPOWER goes wasted to controlling your
bad habits or dealing with everyday insignificant issues, your chances of success will plummet.

Below I’m presenting the character traits I consider essential :

➢ Open minded : for as long as you believe that you “know better” or “know everything
that is important” or that “your theory is the best”, please do yourself a big favor and
avoid trading. Get rid of your stubbornness, arrogance and rigid egocentrism and then
 you have some good options to succeed in FOREX Trading. Please note that while you’ll
be trading, you’ll be all alone. So there is no point in trying to convince anyone about
your intelligence by refusing to open your mind to a way of thinking different than yours.
It is an undeniable fact that being interested in FOREX Trading, you belong to the elite of
the elite of world’s most brilliant minds. But while you initiate the learning process you
must empty your brain from your fixations about your abilities. You must push your
self-sabotaging beliefs to the backyard of your mind. They say, when you know
something half-way or the wrong way, you should unlearn it first before you soak your
mind into the right information. This hypothesis is partially wrong because everything
we learn is being supported forever by neuronic synapses forming circuits that were built
during our sleep. We can’t unlearn things but we can push them far below the surface of
our everyday active thinking patterns by building new circuits bigger, stronger and
constantly active. Besides, that’s what being open-minded means.

➢ Patterns recognition ability : the biggest enemies of Technical Analysis, keep saying
that “Markets are chaotic and it is impossible to see patterns in the chaos”. Apparently,
to them, it is much preferable for the small traders to be at the mercy of the chaos THEIR
Bosses generate in the Markets. Well, I have good news for you. The human brain -this
super powerful and divinely perfect imagining, thinking and creating device which
Aristotle would call “organon”- has the innate ability to recognize patterns, as part of its
defensive mechanism against chaos. There are patterns behind everything that makes us
happy and there are patterns behind whatever makes us sad. Behavioral patterns of
people we enjoy being with, differ than those of people we consider toxic. Some of us
have increased ability to spot patterns, in all kinds of dynamic phenomena, from weather
to relationships and from nature to the markets. Others, need to put some more effort into
training their eye to recognize and interpret them. Patterns have a specific structure
 which makes them detectable and show repetitiveness which is a very important element
on its own. Also, their structure, frequency of appearance or their correlation with
surrounding elements, make pattern recognition an imperative survival skill in the
Markets. And that is because you’ll have to be able to see Correction Patterns/Profiles of
the pairs, Turning Point Price Patterns, Reversal Candlestick Patterns,Continuation
Patterns, Ascending Descending or Symmetrical Triangles, Double Tops and Double
Bottoms, Triple Bottoms, Heads and Shoulders, Wedges, Bottlenecks and Funnels and
many more, where others will just see chaos :)
➢ Determination : this virtue is totally different than stubbornness. Being determined
means you have a crystal clear purpose and you do whatever it takes to fulfill it, while
stubbornness is about proving everyone else wrong, actually a shallow attitude rooted in
all kinds of insecurities. Being determined you are focused on your WHAT and there is
no HOW, WHERE or WHEN associated obstacle that can stop you from getting it,
because you have decided so. If your interest in FOREX Trading is just a passing by
“trend” you are copying from a friend you admire or feel jealous of, forget it! But if on
the other hand, you have discovered FOREX while searching for your personal “El
Dorado”, there is no more exciting adventure than this, for those who are truly
determined to touch “gold” knowing it’s theirs.
➢ Patience : We tend to believe that our external landscape influences the internal but it’s
the other way around. How do I know? I lost the most money when I had “tempest in
skull”. Instead of sticking to my trading plan, rules and criteria, I kept stressing about the
money I needed to make fast...yesterday! When you are stressed, worried or unsure , you
are not in control of your trade….your panic is. And panic is making moves where no
move should be made and it does whatever it does fast while no speedy action is
necessary at all. This tendency is the fruit of our social conditioning where physical is
the primary work model which requires repeatable action, hard effort and high frequency
tasks defined as productivity. We conveniently mask our busy-ness as business trying to
hide ourselves behind our finger. We assume that being busy doing something means
we’re hard working and therefore we should be appreciated for that. We banish quality
of work replacing it by quantity of busy-ness which actually is a silly alibi for the
unforgivable crime of killing our precious and irreplaceable time. Anything else, no
matter if it requires mental effort, -which is being illustrated as not doing much,- escapes
our comprehension. Nobody wants to be considered lazy and unproductive. We get so
busy killing our time with nonsense, that when someone asks us to be patient during a
high performance and quality work the exact patience mode goes beyond our perception.
But being patient in FOREX Trading is not laziness or lack of productivity, it’s pure
wisdom and always pays huge dividends. We have to WAIT for a Correction to finish.
We have to WAIT for all our entry criteria to be met. Once we enter, we have to WAIT
for the trade to mature, especially when we enter early at the beginning of a Reversal on
Daily Time Frame, where the “Turning Point Pattern” may require our patience for more
 than seven trading days. We have to WAIT for the price to exhaust its momentum. We
have to WAIT for our Exit Criteria to be met. We have to WAIT before we Enter again.
If we’ve been trapped in a Correction, we have to WAIT for the price to resume its main
trend. Is patience something that can be learned and practiced? Yes, it is. But it takes
effort and commitment.
➢ Self - Esteem : Having a healthy degree of Self Esteem means that you like, appreciate
and respect yourself. In case that sounds too vague let me make it a bit more specific.
Liking yourself means you feel confident with your outer image, you are not constantly
self-aware at the verge of confronting a rejection, you don’t feel that others dislike you,
you don’t criticize your appearance as below average, you don’t feel like being an
overweight ugly person, with ugly face, bad posture, neutral presence and minor social
skills. When you appreciate yourself, it means you believe in your high potential, you
know who you are and where you’re going. Respecting yourself, means you set
boundaries in your relationships with other people and you don’t allow them to step over
you, to exploit you, to fool you or to mistreat you in any way. Furthermore, you take full
responsibility for your choices and actions being nobody’s puppet. You don’t allow
others to project their expectations on you driving your life to the directions that serve
their purposes. In a few words, you own your life -as you should- and you are in absolute
control of it. Self-Esteem is of paramount importance when you trade because you can’t
really be the Boss of your Trades when you can’t even think of doing what you want in
most aspects of your life due to the fact you’re conditioned to follow orders and do as
you’ve been told to. Is self-esteem something we can grow with practice? It definitely is
but it requires a total reset of our mentality. Exercising, which leads to an optimum
physical condition, a great shape and a better image of ourselves, -because we like
ourselves more- , reading the right books and being associated with positive people with
uplifting attitude can be a catalyst towards boosting our self-esteem. If you feel
comfortable in your body, your mood is great, you smile and when you smile, you spread
magic around you, the kind of magic everyone finds irresistible.
➢ Consistency : if you have the natural tendency to juggle tasks bragging about being a
multi-tasker, then let me guess… Most of the projects you start are left unfinished and
even those finished are a disappointment. The reason your finished projects aren’t
successful is that on one hand, your whole energy has gone wasted to all directions and
on the other hand, they didn’t have your focused attention because no human being can
stay effectively focused at multiple things at the same time. You can’t stay focused to
just one task, because you like them all and you get bored easily. If that’s your case, you
lack consistency, a very important trait of character successful traders have. I know
because I have been a multitasking champion exhausting myself, putting tremendous
effort to multiple directions at the same time, thinking that was an extremely smart thing
to do and ignoring the repeated poor results and the frustration. Successful trading is a
boring process of doing again and again what works because you know it works, sticking
 to your rules and criteria and not even blinking your eyes away from them. Those who
seek variety in the Markets, get it in the form of unpleasant surprises and shocking
catastrophes ranging from losing many trades in a row to seeing their account killed
within hours. Being consistent with your trading means you are monotonously successful.
It means your discipline is iron. No surprises, no variety, no breaking the rules, no
ignoring the criteria.

DO
PART 1 : The Destination and the RoadMap (The Trading Plan)

Chapter 7 : FXHOLIC’s Equation

Having set your Trading Plan, is not an option, it’s a prerequisite. The destination is already
clear in your mind. So has to be the way there. Trading Plan is your Roadmap.
I knew that planning my way was essential but also knew that my Trading Plan should have the
characteristics of a Modifiable/Adaptable, Repeatable and Scalable Formula which once setting
its parameters, would lead with Laser-Beam precision to the target. It should be the guide to the
successful execution of the goal.

I needed to collect the elements that determine the Trading Process and furthermore, I had to turn
their correlation into a proper Equation. That’s how I put together FXHOLIC’s Equation.

In a few plain words, the Equation should help me calculate at any moment, how many lots of a
certain currency pair should I trade at a given Account’s Leverage, going for a number of Daily
Pips which is easy for me to make, for a number of trading days so that I make as much money
as I currently have in my Account, therefore Doubling my Equity.

s X L/10r X p X d = e
S stands for lots’ SIZE and number. For one micro-lot, s=0.01 . For one mini-lot, s=0.1 . For
one standard-lot, s=1.0

L stands for account’s LEVERAGE. Although a leverage at the level of 100:1 is not a low one,
you better stick to it. In case of 100:1 Leverage, L=100 . (For the US traders, where Leverage
higher than 50:1 is not permitted, the L/10 must be modified to 50/25.)

R is the QUOTIENT of 1 divided by denominator currency's rate with USD (i.e. for /USD
pairs R=1 for non /USD pairs R equals the quotient between 1 and denominator currency's rate
against USD for example on GBPJPY R = 1/USDJPY )

P stands for PIPS …..specifically it’s about your DAILY PIPS TARGET, possibly the most
important figure in the whole Equation. Your P shouldn’t be higher than 20 at least till you
DOUBLE your Account 4 times.

D stands for DAYS…..specifically the number of TRADING DAYS you’ll need in order to
DOUBLE your Account’s Equity.

E stands for EQUITY…..which is the true amount of money you have in your Account. This is
the amount of money you can immediately withdraw. Ideally, you should start with Equity not
higher than $1000. You need 10 DOUBLINGS to go from $1000 to $1MILLION :

1K - 2K - 4K - 8K - 16K - 32K - 64K - 128K - 256K - 512K - 1.024 M

Your goal is to make your 1st Million USD trading and learning FOREX at the same time.
If you are living in the USA, most possibly, due to local strict regulation rules, you are not
allowed to trade with leverage higher than 50:1 and after I’d been told about these limitations by
my FXHOLICS who live in the US, here is how the FXHOLIC Equation is modified to meet the
USA Forex Trading Accounts Standards :

s X L/25r X p X d = e <== for US Traders

Chapter 8 : Three Secret Keys

One key here is LEVERAGE which comes in two forms, extrinsic and intrinsic.

Extrinsic leverage is that which your Broker offers to you and is incorporated into FXHOLIC
Equation. Of course, they don’t offer you this high leverage out of their good heart. They’ll
make money whether you lose or win. And if they’re Market Makers, they’ll make more money
if you lose because they MAKE the Market for you. When you BUY, the Broker SELLS to you
and when you SELL, the Broker BUYS from you. The Broker IS THE MARKET for you. That’s
how a Market-Maker works. Being after your money, they’ll do whatever possible to entice you
to trade.

One of their most favorite “baits” is LEVERAGE. Broker offers 200:1 , 400:1 even higher and
the majority of new traders see the “cheese” of potential fast profits but miss the trap of potential
equally fast losses.
Trading with an Account-Leverage of 100:1 is manageable and also can help you reach your
goal in a time-span which will not be too long.

Intrinsic leverage comes from inside you having two equally essential facets : knowledge and
psychology. Knowledge is something you can easily find from the work of many brilliant
traders. Acquiring knowledge will make you grow confident and will also have a tremendously
positive impact to your psychology.

But what I mean by psychology here is mostly related to the way you have re-programmed your
subconscious mind so that your DAILY ATTITUDE is comprised of all those little disciplines
and right decisions that have become habits. These daily habits should reflect the fact that the
whole trading process is on auto-pilot. But for your subconscious mind to adopt the new
attitude, your conscious mind should rationalize it. And that means you should break everything
down to images and then feed your subconscious with them.

Subconscious works with images. It can’t tell the difference between real or imaginary ones.
Once it internalizes the images it starts working towards materializing them.

That means, having set your 1Million USD goal and having determined your Daily Pips and the
number of Trading Days you’ll need for each of the ten Doublings to get there, is not enough.
The Equation and its breakdown are a set of images, but you must also turn the 1 Million USD
into a set of images it means to you. 1Million USD means totally different things to you than it
means to me. Imagine them with closed or open eyes and most importantly, write the detailed
descriptions of the images that flash on the screen of your mind, on a piece of paper. Once you
finish with the descriptions of the images, start describing the emotions. How will you feel when
1Million USD will be sitting in your Bank Account as the product of your Trading? Write the
emotions down on the sheet of paper. And after you do that, trust the ability of your
subconscious mind to absorb them and decode your Trading Plan into a sequence of daily
habitual actions that will take you to a new reality, the one you imagined.

Sounds weird and maybe you wouldn’t expect such a piece of advice from a technical book on
Forex Trading, but if I don’t tell you this and if I don’t help you understand the importance of
seeing, hearing, feeling your goal as if you already have achieved it, I’ll miss my mission to
guide you out of all the lies and the myths FOREX Industry wants to fill your mind with.

So establishing the right psychology which will play an important role in terms of intrinsic
leverage, is not just plain theory. You can shape it exactly as you want. Therefore, it’s totally
under your control.
To succeed in FOREX Trading, you have to master all three Leverages. If one of the three is
missing, you’ll fail.

Broker’s leverage is the one you choose to work with and you have already included it as a
parameter inside FXHOLIC’s Equation.

The leverage of knowledge is something you have to build with practice. But if you think why
the knowledge-leverage is important, you’ll realize that it’s not because it will help you make
tons of pips. You already have determined the DAILY PIPS TARGET which is more than
enough for you to reach your goals and make all your dreams come true. Knowledge will give
you CONFIDENCE. Starting out, the knowledge of setting a plan and breaking down your goal
into little daily achievable chunks of profits, is something the vast majority of traders haven’t the
slightest clue about. Therefore you start with a tremendous advantage and this piece of
knowledge is more than enough to push you towards making your first steps to the right
direction.

The positive psychology leverage is also something that comes with practice. Confidence
because you know what you’re doing and why adds to your positive psychology status but the
key element here is the lack of fear. Till you get to know what proper risk-management is and
how to implement its principles to your trading, you need to seek positive psychology to
alternative sources. That’s where the concept of starting out with a very small amount of money
-even $100 is fine- comes into play.

Starting with a “seed-capital” of $1000 you have nothing in common with the 95% of New
Traders who trade money they can’t afford losing. Fear becomes instantly a non existing factor
to you. At the same time, you know that your $1000 holds the possibility to turn into $1Million
if you are disciplined enough to respect the set of rules and criteria that will enable you to double
your Equity ten times. And even if you’re starting out with $100, you know that the journey of
learning how to earn and earning your way through will just take 4 extra doublings and some
extra training time “sharpening your saw” via Micro-Trading.

An outsider, might find the idea ridiculous, but it isn’t.

You know what DOMINO is. And probably you have heard about the “Domino Effect” when all
it takes is a simple finger tap to the first Domino of a sequence of thousands in order for all of
them to fall.

What you may not know is that one simple Domino can push down another one which is 50%
bigger. The “Domino Effect” with the added tremendous power of Geometric Progression
requires only the same finger tap on the first Domino of a sequence of gradually bigger
Dominoes -each one 50% bigger than the previous- to bring EMPIRE STATE BUILDING
DOWN.
The first Domino has the Size of your initial Capital which may be $100 or $1000. Each next
Domino in the Sequence represents the Size of your Capital growing with geometrical
progression. The finger tap it takes is the HABIT of the DAILY PIPS TARGET which should
be no more than 20. Instead of “burning yourself” doing what most new traders do acting as
GAMBLERS, chasing hundreds of pips, let TIME become your ally bringing you TWO Precious
Gifts : experience and geometrical progression.

The second key is HABIT.

Man is a creature of habit. This is a realization as old as mankind and goes hand in hand with the
simple fact that our very survival would be impossible unless the biggest part of our daily actions
were purely habitual.

Without going into deep analysis of our habitual nature, I’ll mention here that our mind has two
parts distinctive but also interconnected : conscious mind and subconscious mind. Conscious
mind uses pure logic to process input from environment, can only focus on one thing at a time
and is responsible for less than 10% of our actions and even less for our results. Subconscious
mind uses imagination -fed by real or imaginary images- and emotions, is rooted not only to a
person’s vast memory archives since the moment of birth but quite possibly is also connected to
collective consciousness on a spiritual level and is responsible for the 90% of our actions and
even more for our results. If we use “the ant and the elephant” analogy for the conscious-
subconscious mind duet we should also point out that for this omnipotent elephant to move and
utilize its power, the ant keeps the keys to its programming.

Our Subconscious mind being the center of Autonomous Nervous System which regulates and
coordinates the proper function of each cell, organ and system of our body so we don’t have to
think about it, and the Chief Executive Officer of all our plans, is our Auto-Pilot which needs to
be fed with images and to be exposed to routines frequently enough to develop the habits that
will guarantee successful execution of our commands without the conscious mind having to
think about any of them.

There is a huge sector of modern neurosciences studying specifically how habits are formed. It
has been discovered that basal ganglia -cell clusters surrounding thalamus, brain’s “switchboard
operator” connecting sensory and motor stimuli of the body with cerebral cortex - is the brain’s
area responsible for habits formation. ( “The Power of Habit” by Charles Duhigg)
Scientists in MIT laboratories have decoded the habit formation process as a three steps loop :
cue - routine - reward

The power of habits is tremendous as it has been documented that people with damaged brains
where basal ganglia were intact, could effectively perform their habits and even learn new ones
although they couldn’t keep any piece of information in their mind for more than 20 seconds.

Habits represent whole circuits of neurons and synapses built in the brain once they’ve been
established by repetition. Therefore they can’t be removed, only replaced by new stronger ones.
But although we have replaced a bad habit with a new good one, the bad habit’s pattern is
always there waiting for the right cue to activate it again.

We can literally change our whole life by replacing our bad daily habits with new good ones
doing it one habit at a time. And the result can be a true metamorphosis.

-Why am I placing so much importance to habits and why are they one of the three secret keys to
FOREX Trading success?

-Because successful Trading has to be a habitual process. Burning your mind to make your
trading decisions every time you’re considering about taking a trade means you are putting
yourself into a stressful situation and having to make a decision also means that you are not quite
sure about what you should do and why. This is the exact self-destructive pattern most of
Traders find themselves trapped in. This is the situation that was drilling holes in my stomach,
my mouth turning dry, my eyes burning and my heart pounding every time I was in a trade and
Market was moving against me. I had even thought of switching to the opposite kind of trade
every time I was about to enter, judging by the recurring incident of seeing Market moving
against me minutes after I had entered. But what would really be the benefit of doing that? I was
still shooting in the dark. There had to be a formula with a set of steps that would make a routine
which is followed again and again should give positive results every time. The had to be a
HABIT which I was madly in search of. In my mind the ideal cue-routine-reward HABIT
should look like : entry - stay - pocket pips and go. This habit would require me studying and
internalizing its elements and rules burning my conscious brain once. And after a 20, 30, 40, 50,
60 repetitions for 20, 30, 40, 50, 60 trading days, this habit should have built its own neurons and
synapses circuit in my brain , therefore becoming a fully automated process which wouldn’t
require a tiny bit of thinking giving me two kinds of rewards, the pips earned and the positive
psychology throughout the whole process because Trading should be fun, not soul-consuming
stress. If I only knew the exact structure of this entry-stay - pocket pips and go back then…
But anyway, I discovered the habit’s structure and will share it with you in the following
chapters.

The third key is REWARD.

Reward works in two ways to your benefit. First it’s the DAILY PIPS Target Reward which
closes the loop of your Trading HABIT making you feel great for reaching your Daily Goal and
then is the Reward in the form of cash-withdrawal events which you determine when to happen
before you reach the final goal. This kind of Reward works as a psychology booster because not
only it enables you to enjoy the material aspect of your progress, but it also enhances your
commitment to proceed reaching your ultimate goal.

-What do I mean by cash-withdrawal events?

-Assuming that you have started with seed capital of $1000 -it’s fine even if you start with just
$100 because your training will just last longer and that’s an extra benefit, not a handicap-
which you’ll work towards growing up to $1Million after 10 Doublings -10 d’s - it’s perfectly
acceptable if you decide to make two withdrawals after the 4th and the 8th Doubling like the
example below :
$1K
d1 (1st Doubling) --- $2K
d2 (2nd Doubling) --- $4K
d3 (3rd Doubling) --- $8K
d4 (4th Doubling) --- $16K -----> Withdrawal of $8K (leaving $8K in the Account)
d5 (5th Doubling) --- $16K
d6 (6th Doubling) --- $32K
d7 (7th Doubling) --- $64K
d8 (8th Doubling) --- $128K -----> Withdrawal of $64K (leaving $64K in the Account)
d9 (9th Doubling) --- $128K
d10 (10th Doubling) --- $256K
d11 (11th Doubling) --- $512K
d12 (12th Doubling) --- $1024K ⇐== Goal reached
Doing this, will delay your whole process by two Doublings but in fact the opposite will happen.
Here I can only present the theoretical aspect of this model because it is essential to say “WELL
DONE” to yourself and celebrate your success not just Daily looking at pips adding up but also
touching the money you made and using it. That way your Daily Trading Habit gets ingrained
into your Subconscious mind and the positive emotions of self-appreciation, joy and sense of
achievement, strengthen the neural paths of this habit’s newly built circuits in your brain.

It’s not much about the amounts of $8K and $64K per se as much as it is about becoming aware
that this is real and it’s happening because you can make it happen. To me, this is the definition
of true power. You can name it as you like. It’s pure magic.

-Why did I mention that instead of two Doublings delay the opposite will happen?
-Because the philosophy of the FXHOLIC System’s Incremental Progress making baby steps of
a handful of pips PER DAY, has the elimination of risk at its core and because it focuses on you
LOCKING your daily pips, in a strange way, you’ll realize that Markets will want to give you
more in most of your trades and by “more” I mean usually twice or three times as much as your
Daily Pips target which will result in actually shortening your d or even skipping one or two due
to high performance.

But before you rush to jump and scream from enthusiasm, let me ground you with a practical
observation of mine. I have noticed that the first couple of doublings last forever - don’t get
disappointed if you get stuck to the first doubling for twice or three times as much as the d you
calculated using the equation- and then, usually after the fourth one, skies are wide open and you
feel like flying and nothing can stop you. That’s why I recommend to my FXHOLICS to follow
their Trading Plan religiously for the first 4 Doublings and then do whatever they want and break
any rules they like. I say that because after the 4th Doubling the Trading HABIT will have
formed its neural circuit inside their brain so their Trading will be fully automated from that
point on, it will take zero thinking and will be fun and the cash-withdrawal I suggest will
reinforce their natural inclination to stick to the progress….so actually I don’t worry that they’ll
do crazy things breaking rules and losing money :)

Chapter 9 : The Golden Ratio of S/E

If you’re wondering what’s the core element of geometric progression or compound effect or
incremental progress or kaizen -call it as you like- when applied on FOREX Trading, it’s the
fixed ratio between the Size of lots you’re trading and the Equity it corresponds to. In other
words, if you’re starting with $1000 and you are trading ONE MINI LOT which means S= 0.1
then your Golden Ratio is 0.1/1000.
So you’ll be trading ONE Mini Lot till you grow your Equity up to $2000 in order to ADD one
more Mini Lot therefore keeping your Golden Ratio the same because 0.2/2000 = 0.1/1000

-When will you add one more mini lot ?

-As soon as you grow your equity up to $3000

Ideally, you shouldn’t take a risk higher than 3% of your Account’s Equity, but we’ll take
serious consideration of this basic Risk Management Principle when we’ll be making our trade
setup preliminary estimates using our sets of criteria.

A practical rule of thumb is to not trade more than ONE MICRO LOT per $100 ( S/E : 0.01/100
), or ONE MINI LOT per $1000 (S/E : 0.1/1000), or ONE STANDARD LOT per $10000 (S/E :
1.0/10000).

When working on the EQUATION setting up your own personal Trading Plan, you may want to
seek ways to make your d smaller. I know that a p of maximum 20pips per day doesn’t look
attractive and instead of trying to push it lower -as you should- you’re rather inclined to double
it. In that case, instead of exceeding the 20pips/day limit you can play with s on the condition
you make a very thorough evaluation of your Broker’s Margins and Spreads per Currency Pair.

-What do I mean by that?

-The margin is actually the amount of money at which your Broker allows you to open a position
for a specific pair. Let’s say for example that a Broker allows you to trade 1 MINI LOT of
GBPUSD at $140. That means that while you keep this position open, $140 from your account
are blocked in the form of a guarantee and that is called MARGIN. If you want to withdraw any
amount from your Account, you can only touch the remaining capital after subtracting the
margin. While the position is open, margin is not yours. Now, if you choose to trade 1 MINI
LOT of AUDUSD, your Broker may ask for a margin of $70. Margins are BROKERS’ Price List
for the Currency Pairs they allow you to trade via their Platform. It is a PriceList of Guarantees.

-Why paying attention to the Margins is essential for you?

-Because in the example presented above, you can trade 2MINI LOTS of AUDUSD at the same
Margin as 1 MINI LOT of GBPUSD. That keeps your Risk -Exposure the same but allows you
to Double your S/E Ratio because instead of 0.1/1000 for GBPUSD it can be 0.2/1000 for
AUDUSD and if you keep your p the same -let’s say 20pips/day- you will instantly cut your d
into half, although I personally would use this advantage to cut my p in half :)

-Do you really have to deal with the Margins?

-No. It’s optional. I’d make my life simple sticking to the rules above, trading 1 Micro
Lot/$100, 1 Mini Lot/$1000 and 1 Standard Lot/$10000.
Broker’s Spreads is a figure we’ll discuss when we are making our calculations and estimates
before taking a trade. It is very important though, to have a rough idea about your Broker’s
spreads for a list of 5-10 Currency Pairs that you are mainly interested in. And I say a “rough”
idea because most Brokers’ spreads are fluctuating depending on the Session, the Day, the hour
when a Release is expected or an important international event is in progress. So keep that in
mind.

Chapter 10 : My P

-What is a pip ?

A pip is the smallest incremental unit of measure that traders use to count profit or loss. "Pip" is
an acronym for Price Interest Point and measures the amount of change in the exchange rate for
a currency pair. Most currency pairs, except Japanese yen pairs, are quoted to four decimal
places. For example, if EURUSD goes from 1.1206 up to 1.1207 we say that the rate went up by
1 pip. USD pairs are quoted to four decimal places which means that pips are being calculated
on the fourth digit after the point. If it goes from 1.1206 down to 1.1205 we say that the rate fell
down by 1 pip. For USDJPY, if price goes from 123.56 up to 123.57 it increased by 1 pip and if
it goes down to 123.55 it decreased by 1 pip. JPY Pairs are quoted to two decimal places. So
pips are being measured on the second digit after the point. GOLD (XAUUSD) is being quoted
to one cent of the USD which is the second decimal place. That’s the “official pip” for GOLD
meaning that with a Standard Lot and an account with 100:1 leverage, we make $100USD per
cent of rate’s movement, but for the sake of simplicity and clarity, I’m asking your permission to
calculate the pips in GOLD based on the first decimal digit. That means 1pip upward move if
price goes from 1175.1 up to 1175.2 and 1pip downward move if it goes down to 1175.0

Most new Traders believe that successful trading is about making tons of pips. That’s a MYTH
which is being very well supported by the FOREX Industry because it sells you the idea of
becoming rich overnight.

Successful trading is not about MAKING a lot of pips, it is about KEEPING a handful of
pips as fast as possible….EVERY DAY.

Rich people know that all financial success -just like all kinds of success- is not an overnight
event. It’s a process. It doesn’t happen. It evolves.

People who don’t know this basic truth, are the ones vulnerable to the MYTH. If you are aware
of the fact that success is a process, you have already set your plan and are on your way there.
But if you are desperate because you ignore this truth or because you are overloaded with
negative energy and are surrendered to your self-pity emotions rather than listening to your inner
voice of reason, you have become a good candidate to bite the bait opening a LIVE Account and
funding it with your life’s savings. Do you have a plan? No. Do you know how to succeed in
FOREX Trading? No. What made you risk your “blood money” in a FOREX Account? Your
blind hope that maybe someday, somehow you’ll make tons of pips and pull yourself out of the
tunnel. Someday…..somehow….. Hope…..Blindness….. I will not call you a “gambler” -
although you behave like one,- but you definitely are delusive because you are in denial of
reality.

-Your problem?
-Your unlimited potential.
-Why?
-Because just as you have unlimited potential to succeed and go up, you have unlimited potential
to sink yourself into misery and self-destruction. And you also have the choice. You have the
power to choose your habits. Keep the good ones that serve you well and change the bad ones.

As Warren Buffett says, "The chains of habit are too light to be felt until they are too heavy to be
broken, and we then function in our dysfunction."

-What should you do?

-Keep your savings safe and secure a source of income that will pay the bills till you learn how
to succeed in FOREX Trading going for a handful of pips per day. You’ll start from a low point
funding your Micro Account with $100 or your Mini Account with $1000 and you’ll stay
disciplined till the process becomes a habit as strong as brushing your teeth every morning and as
automated as blinking your eyes.

Using the Equation, you can play with the figures and even place 50 or 100 pips as your Daily
Pips Target. That’s fine as a psychology-booster exercise but don’t adopt it as part of your
Trading Plan. I suggest you go for no more than 20pips per day.

-Why do I say this?

-Let me give you an example. Using FXHOLIC’s Equation, I’m going to trade 1mini lot per
$1000 which makes my S/E Ratio 0.1/1000, I will use no more than 100:1 leverage which
makes L/10 equal to 10 , I’ll trade a /USD pair which means R=1 so no point of writing it and
I’ll go for no more than 20pips per day (p=20)

s X L/10 X p X d = e
That means my Equation should look like this :
0.1 X 100/10 X 20 X d = 1000
Therefore, d, the number of Trading Days I’ll need in order to DOUBLE my $1000 is :

d = 50
50 Trading Days are almost 2 Trading Months and that means if I keep my S/E Ratio fixed at
0.1/1000 , my Account’s leverage fixed at 100:1 and go for no more than 20pips daily, I’ll turn
my $1000 in $1MILLION in almost 20 months from today. If this is not the definition of a
financial miracle, I don’t know what else is.

Instead of making your life difficult and in a sense, sabotaging your own psychology going for
50pips per day, maybe you should start out going for even fewer pips such as 10pips or less. No,
I’m not out of my mind. If you start out with an aggressive plan having set your p at 50 pips per
day, odds are you’ll fall into the trap of “gambler’s attitude” and you’ll find yourself in the
miserable situation of trying desperately to make 100pips in a day because you made zero pips
the previous one and in case of losing 50pips, next day will hammer your psychology with the
unreachable goal of 200pips and as your losses will be getting deeper, you’ll either kill your
account out of despair or you’ll damage your health on all its aspects , physical, mental and
emotional.

You can’t beat the Markets and you don’t have to anyway.

All you should care about is being the BOSS of Your Trades. That means, you must take pre-
calculated risks trying to turn possibilities into certainties. A daily move of 50pips for a pair is
less likely than a move of 10 or 20 pips. And even if you were a very experienced trader, the
accordion effect of trading the waves of the 96 M15 Candlesticks contained within a Day, might
not yield 50pips on a Daily Basis.

That would ruin your psychology and push you to quit because for a hurt EGO, it’s really hard to
go back to block #1 and make a more realistic Trading Plan trying to make fewer pips per day.
FOREX Trading is a SOLO SPORT and you are the team and the coach at the same time. If
your Team loses its morale, there is almost nothing you can do to convince them to go back to
the court chasing victory.

And like any sport, the Team must play primarily for the fun of the game and secondarily for the
reward. The way your Trading Plan must be structured, should give you space to have fun with
your trading ….every single day. If you place the DAILY PIPS TARGET Bar too high, you’ll
put yourself under extreme stress and you will be able to survive the hurting stomach, the dry
mouth, the pounding heart and the seating forehead only for a few days till all your defensive
mechanisms get triggered forcing you to call Trading a SCAM -giving yourself a nice alibi- and
forget about it.

That will be an absolutely reasonable result because our mind and our body are designed to avoid
pain.

On the other hand, if you set your DAILY PIPS TARGET to 20, your odds to reach it are more
than double compared to 50pips, plus your optimum psychology, will allow you to manage your
trades more effectively and by default you’ll be locking much more than 20pips more often than
expected although you’ll be ecstatic about securing your 20.

This is the reason why I suggest you lower your DAILY PIPS TARGET instead of cutting down
to half your d, in case you decide to trade a pair which has half the margin of the one you
initially planned to trade. Since your RISK remains the same, -although your S/E has been
doubled- why not use this to your psychological advantage making your life easier? That means,
if you can trade 2 mini Lots per $1000, it would be wiser to switch your p from 20 down to 10
keeping d unaltered. This way you BUY yourself more time. And time is all you need when
you’re starting out. Nobody will stand on your way if after 4 successful DOUBLINGS, you
decide to set your p to 20 again.

You are the BOSS of your Trades, remember?

Chapter 11 : My D

When you’re setting your Trading Plan using the EQUATION, d is the factor that resonates with
you. D is the number of trading days it will take you in order to DOUBLE your Account’s
Equity. D is about TIME.

And time is how we measure life.

On the example I used above, d=50 therefore I know it will take me around 500 trading days to
turn my $1000 into $1MILLION. And if I translate this into Trading Months, it’s 25 Trading
Months.

If I go to my Calendar, I can pinpoint my starting date which is for example 1st of July 2015 and
I can see that by the end of July 2017 I’ll have reached my goal making my 1st MILLION using
my $1000 as seed capital and my BRAIN as moving power :)
Next, I decide to add two more D’s so I can pre-schedule at least two withdrawals for the sake of
self-reward which I described earlier.

Next, I make a list of my D’s and their financial results like this one here :

$1K
d1 (1st Doubling) --- $2K
d2 (2nd Doubling) --- $4K
d3 (3rd Doubling) --- $8K
d4 (4th Doubling) --- $16K -----> Withdrawal of $8K (leaving $8K in the Account)
d5 (5th Doubling) --- $16K
d6 (6th Doubling) --- $32K
d7 (7th Doubling) --- $64K
d8 (8th Doubling) --- $128K -----> Withdrawal of $64K (leaving $64K in the Account)
d9 (9th Doubling) --- $128K
d10 (10th Doubling) --- $256K
d11 (11th Doubling) --- $512K
d12 (12th Doubling) --- $1024K ⇐== Goal reached

Now my last D will be shifted to the end of September 2017.

-Does it matter?
-No! Because I decided to make two withdrawals in the process enjoying the fruit of my effort.
That decision doesn’t jeopardize my Trading Plan. It boosts my psychology and helps stay
FOCUSED and DISCIPLINED.

Next, I write the exact amount that corresponds to the end of each d, on my Calendar, calculating
50 Trading Days between the d’s.

Finally, I break down each d into DAILY BABY-STEPS translated in pips and USD also noting
the number of Lots I can trade. For the example above here is how one day’s notes should look
like for the first d :

Wednesday, 8th of July 2015 : I have to make 20pips today ( $20) trading 1 Mini Lot

Daily Pips Target is considered NET therefore you must calculate Broker’s Spread, and that’s
the reason why you should pick your Broker very carefully and also pick a pair with as low
spread as possible. Spread of 1pip or less is optimum.
Goal setting is considered the basis of success but without execution, goal setting is meaningless.
Therefore we must pay equal attention to both setting goals the right way and to execute them
effectively. Goals will be executed by the subconscious mind on the condition, they are
perceived as feasible by the conscious mind.

-How can I set a goal the right way?

-For a goal to be considered valid, It has to be specific in terms of dates and numbers.

When I say “I will make some money pretty soon” it is not goal-setting, it’s wishful thinking.
“Some money” is pretty subjective and can be any amount of money. “Some money “ for you
may mean $100K , for me it may mean $500, for my friend it may mean $20. Also “pretty soon”
is subjective and it has a different meaning for each person. “Pretty soon” for you may mean
tomorrow, for me may mean in a couple of months, for a friend may mean in 2 hours.

But when I write on my calendar that “I’ll have $2000 in my account by 8th of September 2015
starting on 1st of July 2015, because that’s when my 1st d ends after 50 trading days”, the
amount of $2000 is the same for everyone and 8th of September is the same date for everyone.
That’s a proper goal.

Seeing in front of my eyes specific dates and amounts, my conscious mind accepts that goals are
achievable and feeds my subconscious mind with the images of my calendar where dates and
figures reflect this. Now my super-powerful subconscious is ready to be programmed to take me
there and that will happen through DAILY PRACTICE which will make the whole process a
HABIT.

Setting a low and easily achievable p at no more than 20pips per day will increase the odds that
Market gives me more than 20pips in most of my trades. How should I manage this excess of
pips? I manage the extra pips at the end of each Trading Week.

I have four options :

1. I withdraw the extra pips and use the money.

2. I leave the extra pips inside my Account but take as many Trading Days OFF as they
allow me. If my p is 20 and I have made 80 extra pips, that allows me to take 4 days off
in case I choose to leave the extra pips inside my account.
3. I split the extra pips in half. I withdraw half and take days off for the other half.
4. I leave the extra pips in my Account and continue with my Plan, making changes on my
Calendar in case I hit any of my d’s ends sooner.

-And what about losses and missed deadlines?

-No worries. FXHOLIC’s Method is built on the principles of compound effect/domino effect
and it gives you the advantage to make as many mistakes and as many delays as you want at the
early stages of the process when the amounts are still minimum and you are an inexperienced
beginner. If for any reason you can’t reach your Goal as fast as you have determined on the
Equation, you just “cheat a bit” and give yourself extra time. Going to your Calendar, you have
two options :

1. Shift only the current d’s dates in the future for as many days as your delays.
2. Shift the last d’s date in the future and adjust the current ones as you go.

In both cases, pat yourself on the back, stand up, dust off and keep going :)

When I was experiencing losses on my effort to learn and succeed, -although I had not
discovered this System I’m sharing with you back then and I was risking much bigger amounts
of money than $1000 which unfortunately I shouldn’t risk,- I was standing in front of a mirror
saying to myself “I believe in you! I admire your determination! I feel proud of your efforts! I
know you’ll succeed! I LOVE YOU!” and I was kissing my image.

It sounds crazy, you may laugh, but it works miracles!!!

Skip the kissing part if you want, but go ahead and copy this SELF-ENCOURAGING Formula :)

Chapter 12 : Defining RISK

To the FOREX Trader, RISK is the pips-distance between ENTRY and STOP-LOSS Orders.

Because we’ll discuss about Stop-Loss Placement in following chapters, here I’d like to
challenge you about the three actual dimensions of RISK involved in Trading :

● RISK we can take : no more than 3% of our Account’s Equity. This is the RISK that
has been found mathematically to place our Account on the “safe” side of the trade in the
long run and this is the RISK we set as a reference when determining if a trade is worth
taking. If we are considering taking a Trade with reward at least double the RISK we can
take, this trade becomes a good option.
● RISK entailed by Market’s Conditions : if price is making big spikes or if a breakout is
about to happen on a relatively high Time-Frame such as H4 or H1, where placing our SL
below/above KUMO offers extra protection, RISK should be determined by Market’s
Conditions.
● RISK we should take : we may find out that taking a trade from a reliable Time-Frame,
Market’s Conditions dictate we place our SL a bit further than the RISK we can take
 according to the 3% of Equity Rule. In this case we either take the trade placing our SL
up to twice as much as the RISK we can take, or drop the trade.

The way we should think regarding RISK Evaluation is the following in priority order:

● What is the RISK dictated by Market’s Conditions?

● If it is at the level of the RISK we can take, that’s fine.
● If it is bigger, we check if it is less than twice the RISK we can take.
● If it is , we check for another trade with another Pair -or couple of pairs- and if the RISK
on that trade is not RISK we can take, we take this trade with higher RISK.
● If the RISK Market’s Conditions dictate is more than double the RISK we can take, we
either WAIT or DROP the trade.

PART 2 : The Car (The Trading System)

Chapter 13 : Candlesticks and Price Action

Munehisa Homma (本間 宗久 Honma Munehisa?) (also known as Sokyu

Homma, Sokyu Honma) (1724-1803), was a rice merchant from Sakata, Japan
who traded in the Dojima Rice market in Osaka during the Tokugawa Shogunate.
He is sometimes considered to be the father of the candlestick chart.
Until about 1710, only physical rice was traded but then a futures market
emerged where coupons, promising delivery of rice at a future time, began to be
issued. From this, a secondary market of coupon trading emerged in which
Munehisa flourished. Stories claim that he established a personal network of men
about every 6 km between Sakata and Osaka (a distance of some 600 km) to
communicate market prices.[1]
In 1755, he wrote (三猿金泉秘録, San-en Kinsen Hiroku, The
Fountain of Gold - The Three Monkey Record of Money), the first
book on market psychology. In this, he claims that the psychological aspect of
the market is critical to trading success and that traders' emotions have a
significant influence on rice prices. He notes that this can be used to position
oneself against the market when all are bearish, there is cause for prices to rise[2]
(and vice versa).
He describes the rotation of Yang (a bull market), and Yin (a bear market) and
claims that within each type of market is an instance of the other type. He appears
to have used weather and market volume as well as price in adopting trading
positions.
Some sources claim he wrote two other books (酒田戦術詳解, Sakata
Senjyutsu Syokai, A Full Commentary on the Sakata Strategy) and
(本間宗久相場三昧伝,Homma Sokyu Soba Zanmai Den, Honma Sokyu ---
Tales of a Life Immersed in the Market)

WIKIPEDIA

...today’s article is about one incredible man who was known as the “God” of the
markets in his day; Japanese rice trader Munehisa Homma. He lived from 1724
to 1803 and even if half of the legends about him are true, he was by far one of
the most amazing traders in history and we can learn a lot from the stories that
surround him.
Homma is rumored to have made the equivalent of $10 billion in today’s dollars
trading.

You should probably listen to a “Samurai trader”

Homma is rumored to have made the equivalent of $10 billion in today’s dollars
trading in the Japanese rice markets. In fact, he was such a skilled trader that he
served as an important financial advisor to the Japanese government at the time
and was later raised to the rank of honorary Samurai. I don’t know about you, but
I think it’s pretty safe to say we can learn something from a guy who was such a
great trader that he become a Samurai because of it, to me that is totally cool in
what is probably a semi-nerdy kind of way. Rumor has it that he once had 100
profitable trades in a row….granted there’s a bit of an advantage when you are
basically the “inventor” of technical analysis and no one else really knows about
it yet…but clearly Homma was a force to be reckoned with in the markets and his
legend lives on today.
Homma began recording price movements in the rice market on paper made out
of rice plants. He laboriously drew price patterns on his rice parchment paper
every day, recording the open, high, low and close of each day. Homma began
seeing patterns and repetitive signals in the price bars he was drawing and soon
started to give them names, including some of the popular Japanese candlestick
patterns that you are probably already familiar with like Spinning tops, Stars,
Doji’s, Hanging Man and others, each pattern clearly conveyed a specific
meaning and Homma began using these patterns to predict the future direction of
rice prices. The discovery of the price action patterns left behind by the movement
of rice prices gave Homma a huge advantage over other traders in his day, and
combined with his passion and skill for trading, this advantage is what allowed
him to become one of the most successful traders ever, if not the most successful
trader ever.
To any of you reading this who may still be “on the fence” about the relevancy
and effectiveness of price action trading, consider the fact that it was used
centuries ago by Homma and others and it’s still effective in today’s markets. I
cannot think of any other trading method, system, indicator or robot that has been
effective for that long and stood the test of time as pure candlestick price action
trading has. Whether or not Homma knew the term “price action” in his time is
irrelevant, he was clearly trading from the pure price movement of the market and
he was the first person who realized the advantages of focusing one’s attention on
a market’s price movement to predict its direction.

Homma realized price action reflects market psychology, and used it

to his advantage
In Homma’s book “The Fountain
of Gold – The Three Monkey
Record of Money”, which he
wrote in 1755, he says that the
psychological aspect of the
market is critical to trading
success and that traders’
emotions have a significant
influence on rice prices. He notes
that this can be used to position
oneself against the market when
all are bearish, because at that
time there is cause for prices to
rise (and vice versa).
In other words, Homma was the first trader to realize that by tracking the price
action in a market he could actually “see” the psychological behavior of other
market participants, and make use of it. As it relates to the price action strategies
that I teach, this could mean for example that after a large run up or down in a
market a long-tailed pin bar signal can give rise to a large move in the opposite
direction. I imagine that Homma was the first person to trade a pin bar signal and
I’m sure when he realized the power of the signal he got goose bumps all over his
body.
Homma also probably took advantage of false break trading strategies by the
sounds of what he wrote in his book. I’m sure that he quickly identified patterns
similar to what I teach as the fakey setup and saw that they sometimes form at
major market turning points just as the last market participants have finally
committed to a direction. The tendency of people to jump into a market when it
“feels” safe has probably been around ever since Homma’s trading days back in
the 1700’s, and it has not changed over the centuries. Homma probably realized
this as it’s very evident by studying the price action of a market and using a big of
logic and commonsense. In essence, Homma was the first true “contrarian”
trader and this is why he is one of my heroes to this day. Using the price action of
the market and logical thinking, we can often find high-probability entries into the
market while most other market participants are stuck in a cycle of trading mainly
with their emotions and from what makes them feel good.
Homma would definitely agree that what “feels” like the “surest” trade is often
the wrong one, and once he could start to see the emotion of market participants
via candlestick price patterns, this likely became very obvious to him.

The trend has been your friend or over 250 years, so stop fighting it!
Homma described the rotation of Yang (bull market), and Yin (bear market) and
claims that within each type of market is an instance of the other type.
I can only imagine the amazement that Homma must have felt when he started to
see price trends emerge over his years of drawing price patterns on his rice
parchment paper. It must have instantly set off a euphoric feeling in him because
he likely realized very quickly that trading with the trend would be the easiest way
to make money in the rice markets.
To this day, trading with the trend is still the easiest way to trade. Traders try to
fight it by continuously trying to pick tops and bottoms, but trend-trading has long
been the easiest way to make a lot of money in the markets. Simply put, there’s a
reason for strong trends, so it’s illogical to fight the trend. Homma was the first
trader to be able to identify high-probability entry points in a trending market via
simple price action patterns. This method has worked for literally over 250 years,
and why so many traders still try to fight it and over-complicate it is beyond me.
If Homma was alive today and he saw all the messy indicators and trading robots
people put on their charts, he would probably get a confused look on his face and
wonder why anyone would behave so illogically and ignorantly when everything
they need to find high-probability entries into the market has been right in front of
their face the whole time.

Mirrors don’t lie

Homma wrote several
books in his time, which
are apparently out of print
now, but the candlestick
patterns he described in
his books became known
as the “Sakata Rules”.
These Sakata Rules
became the basis of
modern candlestick
charting and thus most of
what Homma wrote about
is still relevant today. The
fact that the first person to
trade from a price chart and arguably the most successful trader of all time was a
price action trader, is really not surprising to me. What Homma discovered, and
what many of us now know, is that the price movement on a “naked” price chart
reflects everything about a market.
Everything you need to know to find high-probability entry signals into virtually
any market is available on a natural price chart. If you want to see your reflection
in the mirror, you just go to a mirror and look at yourself. You do not put a wig
on or throw a paper bag over your head. Similarly, if you want to see what a
market is doing, you simply need to look at its price chart. You do not need to
cover up the most accurate reflection of a market with indicators and other
nonsense. Munehisa Homma discovered this simple truth about markets over 250
years ago, and to this day many other traders, including myself, are still using
pure price action to trade the markets, because there is simply no better way to
trade. If you’d like to learn how I trade with price action candlestick patterns and
how to trade in-line with time-tested concepts very similar to those Homma and
other traders have been using for centuries, checkout my price action trading
course for more information.
 http://LearnToTradeTheMarket.com

Munehisa Homma is considered to be the “father” of candlesticks. He had hired 100 people who
were making a chain from Sakata where he lived all the way to Osaka, 600miles away, where the
Market was. This chain’s sole purpose was to bring to him the information about Market’s
moves. Then he was going to his Chart drawing the day’s candlestick. His persistence and
dedication to the methodical observation and following of the Market helped him develop his
Entry and Exit Criteria and made him a multi-billionaire.

-Why are candlesticks so important?

-Because each one is a DATABASE. It includes all the information about what had the slightest
impact on the Markets making the price move as it moved for the specific time-interval. That
means a DAILY Candlestick represents all the information that resulted into a financial
instrument’s price action during a trading day, while an H1 Candlestick represents the financial
instrument’s price action for one hour.

-Which Candlestick is more reliable, the DAILY or the H1? Why and how much more?
-Time-Frames correspond to candlesticks of different time intervals. Therefore, when looking at
the DAILY Time-Frame, we know each candlestick represents the price action of a whole
trading day and when looking at H1 Time-Frame each candlestick represents the price action for
1 Hour. Since one Trading Day contains 24 Hours, Daily Candlestick is 24 times more reliable
than Hourly.

And then comes the ACCORDION EFFECT.

When the accordion is closed, it has a fixed width such as the 21pips body of AUDUSD’s, Daily
Time-Frame.
But when it opens widely, its folds make its width multiple times bigger such as the 160pips of 3
waves inside AUDUSD’s M15 Time-Frame, the same day, 08th of July 2015.

On 8th of July 2015, the body of the Daily Candlestick was 21pips and that’s the CLOSED
Accordion’s width for that day.

One Day has 24 hours and each hour has 4 quarters (M15). Therefore, one Day has 24 X 4 = 96
quarters represented by 96 M15 Candlesticks which may go up or down in a zig-zag mode
forming OPEN Accordion’s 96 Folds for that same day.

And that’s how suddenly we turned a 21pips anaemic Trading Day into an 160pips super
profitable Day which could have given us our 20 Daily pips plus more within a couple of hours !
(see the moves on the M15 Chart of the pair)

And now, back to candlesticks.

A candlestick’s parts are its body and its wicks up, down, on one edge, on both or no wicks at all.
Depending on its morphology and its position in the move, a candlestick can be a reversal, a
stasis, or a continuation one.

Candlesticks and candlesticks patterns are a science on their own. Here, for the sake of
simplicity, I will mention a few as well as some of my observations that reflect facts we can use
with our sets of Criteria. But before I present the patterns let’s see why we talk so much about
Bulls and Bears in Trading.

Bulls have a very special way to attack and they do that putting their head down to the ground
showing their horns. The actual bull’s attack move is from down upwards as he shakes his head
up looking to hit the enemy with his horns.

When investors BUY at low price level in a massive scale, pushing the price up we say that Bulls
are in and the upward move is Bullish. So we call an upward candlestick Bullish as well.

Bears have their own attack pattern. They stand up on their two back feet and fall down to their
enemy with all their volume and power. The actual bear’s attack move is from up downwards as
bear is falling down on the enemy.

When investors SELL massively from a high price level, pushing the price down, we say that
Bears are in and the downward move is Bearish. That’s why we call a downward candlestick
Bearish.

1. Spikes : usually, when we see spikes it means price failed to keep going to the direction
of the spike and we should expect a move to the opposite direction. That stands true
especially after big moves and on M30 Time-Frame or higher.

On this H4 Chart of EURUSD we see both Up spikes and Down spikes formed.
Spikes reflect that the panic-trigger has been pushed and for some reason investors were taken
over by fear or doubt closing positions.

2. Small bodies candlesticks : there are no stronger candlesticks than those with very small
bodies or even bodies like dashes, especially when they’re aligned in a row, one
cancelling the previous forming a perfectly parallel sideways move. Imagine small body
candlesticks as springs that have accumulated huge amounts of energy. Where these
small body candlesticks - usually a group of them- are seen at the top of an Upward
Move or at the bottom of a Downward Move, we should expect a very strong move most
often to the opposite direction or less often, the continuation of an extremely strong
move. Small body candlesticks represent the tug-war between Bulls and Bears. Only one
can be the winner.

Actually, small body candlesticks represent consolidation and they’re extremely powerful
leading to strong breakouts. But they may as well represent the stop of a strong move and
price’s sequential efforts to reverse or make a correction.
3. Double Top Lower Close : when two candlesticks appear at the TOP of an Upward
Move having the same top -where the bullish one closed, the bearish one opened- and
the bearish one closes lower than the middle of the body of the Bullish candlestick, it is
apparent that Bulls lost their strength and Bears are in control. Double Top Lower Close
is a very powerful Bearish Reversal Candlestick pattern which if appears on the Upper
Bollinger Band on Time-Frames H1 and higher, gives nice short trades.
4. Double Bottom Higher Close : this is the exactly opposite pattern from Double Top
Lower Close. When two candlesticks appear at the BOTTOM of a Downward Move
having the same bottom -where the bearish one closed, the bullish one opened- and the
bullish one closes higher than the middle of the body of the Bearish candlestick, it is
apparent that Bears lost their strength and Bulls are in control. Double Bottom Higher
Close is a very powerful Bullish Reversal Candlestick pattern which if appears on the
Lower Bollinger Band on Time-Frames H1 and higher, gives nice long trades.

5. Hammer
6. Doji
7. Sandwitch
8. Spinning Top
9. Morning Star
10. Evening Star

11. Bullish Harami

12. Bearish Harami

Price -Action
1. Highs and Lows
It is almost unbelievable how many traders ignore the definition of an uptrend and a downtrend.
The lack of this important knowledge, almost becomes a self fulfilling prophecy when it comes
to Live Trading because Market never moves Straight Up or Straight Down and in addition to
that, it never moves as fast as we want, but as fast as it wants.
Price is moving in a ZIG-ZAG mode. When there is a trend, the usual price action pattern is in
waves of 2 Steps Up -1 Step Down or 2 Steps Down - 1 Step Up.

When we have an UPTREND, we want to see price making a Higher High after a High but in the
meantime, we expect it to make a Higher Low which may be a move Half as many pips as the
move between the previous High and the Higher High.
It is essential that we WAIT for a Correction to happen and finish before we BUY on an Uptrend
or SELL on a Downtrend. We can decide to Enter after we get enough confirmations from
candlesticks that Correction is over. or we can be more conservative Entering after price
breaches the last HH on an Uptrend or the last LL on a Downtrend.
We can estimate the pips-value of the move we’re going to trade by following the general pattern
that main move is approximately twice as big as the correction before it. This way we estimate
the REWARD we’re looking at. If it is at least twice as much as our RISK and 2-3 times as
much as our DAILY PIPS Target, we decide to take the Trade. Ideally, we place our Take-Profit
Target as many pips away from our Entry as the 2/3 of the REWARD. For example if our Risk
is 30pips (3% of our Equity which is $1000) and our DAILY PIPS Target is 20pips, and we’re
looking at a move of 80pips, which is more than twice our risk and 4 times our Daily Pips
Target, we can place our TP 53pips away from our Entry. Depending on our Entry point, we
can place our SL as many pips away from our Entry as our pre-determined RISK, if that means it
will be placed just below/above Correction’s end- point or just below/above the opening of the
candlestick that made the breach of the last HH/LL.

These Trading Rules apply to all Time-Frames but are extremely effective if applied on M15 -
H1 Time-Frames on the basis of intra-day trading.

You can view a VIDEO Presentation of most Candlesticks Patterns, produced for ForexID
Academy here : https://www.youtube.com/watch?v=4DSjAMkFbc0 At the Description of the
VIDEO on YouTube, you’ll find a link to download the PDF File of the presentation.

Mentioning Munehisa Homma and his work on Candlesticks is an honor I would have never
dreamed of in the past and will always remain a humble student of his teachings.
Although Candlesticks alone, give us all the information we need to be wildly successful
Traders, it is my personal opinion that it takes a lot of mental clarity and spiritual maturity to rely
on “naked charts”. Trading with Candlesticks is my challenge and I believe I’ll achieve it one
day.

Because Candlesticks and their patterns are extremely important to any trader, my FXHOLICS
have always been asking me to email them the LINK and the PDF of my Presentation on
Candlesticks made for ForexID Academy. I already gave you the LINKS but will also insert
Presentation’s Slides in the Book. It can’t be complete without them :)
Chapter 14 : Trendlines
Another way to use Trendlines when there is a clear Trend, is by drawing Channels adding one
more Trendline to our Chart so that price is being contained within the two Lines. Price is
moving in a ZIG-ZAG mode between the two Trendlines signaling nice Entries and Exits
especially if we take trades to the direction of the Main Trend and if the Time-Frame is H1 , H4
or Daily.
I have found that Fractals, one of Bill Williams’ Indicators that comes with METATRADER,
help me a lot draw my Trendlines.

-Why?
-Because I use the latest two Down Fractals to draw an Up Trendline and the latest two Up
Fractals to draw a Down Trendline, with rare exceptions.

The Trendline Trading System the way I use it, is extremely simple. You can view a quick
Tutorial of it here : https://www.youtube.com/watch?v=7-MAUZEObPs

a. I draw the Support and Resistance Trendlines on Monthly Time-Frame.

b. I draw the Support and Resistance Trendlines on Weekly Time-Frame.

c. I draw the Support and Resistance Trendlines on Daily Time-Frame.

 d. I draw the Support and Resistance Trendlines on H4 Time-Frame.

e. I draw the Support and Resistance Trendlines on H1 Time-Frame and usually I don’t go
further down to smaller Time-Frames although it is pretty simple to do so if you wish.
How do we “read” the trendlines in order to make our trading decisions based on that
information?

1. When price hits a Support Trendline, there are two possibilities :

● It bounces back and starts going up again so we BUY and our BUY Criteria are :
○ Bullish Reversal Candlestick pattern on the Support Trendline
○ Down Fractal formation on the Support Trendline
TRADE SETUP :
■ We want BOTH of our Criteria to be met before we BUY
■ We place our SL 10-20 pips below the Down Fractal
■ We place our TP at the ⅔ of the Distance between the Support
Trendline and the Resistance Trendline
● It breaks the Trendline closing below it so we are looking to SELL and our SELL
Criteria are :
○ A bearish candlestick CLOSES below the Support Trendline
○ Next candlestick is also a bearish one
TRADE SETUP :
■ We want BOTH of our Criteria to be met before we SELL
■ We place our SL 10-20 pips above the top of the body of the last
candlestick that closed above Support Trendline
■ We place our TP at the ⅔ of the Distance to the Support Trendline
of the higher Time-Frame or as many pips below our Short Entry
 (SELL) as the Height of the Triangle that was formed by the
Support /Resistance Trendline or the Height of the Channel in case
the two Trendlines were almost parallel to each other, whichever
of the two is smaller.

2. When price hits a Resistance Trendline, there are two possibilities :

● It bounces back and starts going down again so we SELL and our SELL Criteria
are :
○ Bearish Reversal Candlestick pattern on the Resistance Trendline
○ Up Fractal formation on the Resistance Trendline
TRADE SETUP :
■ We want BOTH of our Criteria to be met before we SELL
■ We place our SL 10-20 pips above the Up Fractal
■ We place our TP at the ⅔ of the Distance between the Resistance
Trendline and the Support Trendline
● It breaks the Trendline closing above it so we are looking to BUY and our BUY
Criteria are :
○ A bullish candlestick CLOSES above the Resistance Trendline
○ Next candlestick is also a bullish one
TRADE SETUP :
■ We want BOTH of our Criteria to be met before we BUY
■ We place our SL 10-20 pips below the bottom of the body of the
last candlestick that closed below Resistance Trendline
 ■ We place our TP at the ⅔ of the Distance to the Resistance
Trendline of the higher Time-Frame or as many pips above our
Long Entry (BUY) as the Height of the Triangle that was formed
by the Support /Resistance Trendline or the Height of the Channel
in case the two Trendlines were almost parallel to each other,
whichever of the two is smaller.

Trendlines Trading can be reinforced by including Technical Analysis tools such as

FIBONACCI Ratios, Momentum Indicators like MACD and Oscillators such as Stochastics.

2. Price Action patterns :

➢ Ascending Triangle

➢ Descending Triangle
➢ Double Bottom or “W”

➢ Triple Bottom
➢ Double Top

➢ Triple Top
➢ Symmetrical Triangle

➢ Head & Shoulders

Chapter 15 : ICHIMOKU KINKO HYO

“Created and revealed in 1968, the Ichimoku was developed in a manner unlike most other
technical indicators and chart applications. Usually formulated by statisticians or
mathematicians in the industry, the indicator was constructed by a Tokyo newspaper writer
named Goichi Hosoda and a handful of assistants running multiple calculations.What they came
up with is now used by many Japanese trading rooms because it offers multiple tests on the price
action, creating higher probability trades. Although many traders are intimidated by the
abundance of lines drawn when the chart is actually applied, the components can be easily
translated into more commonly accepted indicators.”
INVESTOPEDIA

“ICHIMOKU KINKO HYO” in Japanese means “EQUILIBRIUM AT A GLANCE” and this

fantastic System helps us have an instant idea of Market’s state of Equilibrium at a glance.
ICHIMOKU was actually developed before the 2nd World War but was released in Japan in
1968 and was introduced to the western world in the 80s and 90s soon becoming popular
especially for the KUMO, the shadowed shape that appears on your chart once you add it.

ICHIMOKU comes with your METATRADER and there is no need to change its default settings
other than probably making its lines thicker if you wish so.
Once inside METATRADER, go to INSERT ⇒ INDICATORS ⇒ CUSTOM ⇒ ICHIMOKU
or INSERT ⇒ INDICATORS ⇒ TREND ⇒ ICHIMOKU KINKO HYO

Don’t change any of the settings which should appear as below.

Don’t change the values of System’s variables :

Tenkan Sen : 9, Kijun Sen : 26, Senkou Span B : 52.

As you see here I have chosen to make the lines thicker picking the width “2”.
-Is Market’s Equilibrium the same as Market’s Condition?

-No. Just like every person’s ultimate goal in life is to reach a state of happiness, Market’s
ultimate goal is to reach Equilibrium and to get there it goes through various conditions. Market
is at a state of Equilibrium when price is considered fair. That means Buyers don’t find it cheap
so they’re not interested in buying and Sellers don’t find it expensive so they’re not interested in
selling. But this state of Equilibrium and stasis never holds for long -with rare few exceptions of
extremely powerful and almost private currencies like CHF, the Bankers’ currency- because
Market’s dynamics push the price Up or Down creating TRENDS. ICHIMOKU is a System
designed to help the Trader spot high probability Trades in Trending Markets.

-How does ICHIMOKU help us spot high probability trades?

-Because it gives us very clear visual representation of the fact that Price has been pushed away
from Equilibrium which means there is a strong trend in progress and once the initial trend loses
steam, Market wants to go back to Equilibrium state and to do that it pulls the price to the
Equilibrium level creating an opposite trend.

What we call Market’s dynamics actually are Countries’ monetary policies that manipulate the
pairs towards achieving their goals. Of course that’s the definition of manipulation. Governments
and Central Banks behind the currencies, push the strings of price action stimulating the
Market’s dynamics that kick it out of Equilibrium and Relaxation to the state of Trends and
Tension.

Pretty much what happens in our lives as very eloquently Sunil Bali describes on one of his Blog
Posts :

“The tulip will never try to be a rose, and the rose will never try to be a tulip. And so it is with all
living things except humans.
All living things don't try and be anything that they aren't - they leave that to us humans - and
consequently humans are the only living things that need therapy. As the Zen proverb says,
"Tension is who you think you should be, relaxation is who you are."
We're programmed to self-actualize and express our true nature, but from an early age we're
told, "you should be like this", or "you should be like that". The fact is that if you are to live a
happy and fulfilled life, then the only thing you can be and should be, is who you really are.
When what you think, say and do are the same,
When what you think, say and do resonate with your soul,
When what you think, say and do make you smile,
Then you're authentic, you'll flourish and you'll inspire others to do the same.
So trust and embrace yourself just as you are, in all your glorious imperfection, because who you
really are is good enough.”
Sunil Bali

-How does ICHIMOKU show Market’s Equilibrium/Relaxation State?

-ICHIMOKU demonstrates Market’s Equilibrium as the graphic representation of a flat KUMO
with price moving inside its body. If we see this picture on a Monthly Chart, it has a validity 20
times higher than if we see it on Daily and 480 times higher that seeing it on H1 Time-Frame.
Because Market’s Dynamics accumulate energy while price is at Equilibrium State, we
ALWAYS expect strong Moves in the Form of Breakouts after price has been relaxing at
Equilibrium State for a while.

Two Basic Elements of ICHIMOKU make the System a unique and stand-alone tool every
trader should be familiarized with :

★ KUMO which means “cloud” in Japanese, a graphic representation of Support in the

form of a two-dimensional shape that reflects BUY-Orders therefore standing for
DEMAND, or Resistance in the form of a two-dimensional shape that reflects SELL-
Orders therefore standing for SUPPLY, with the basic principle that Market is in an
Uptrend when price moves above the KUMO (Demand) and in a downtrend when price
moves below the KUMO (Supply)
★ System’s ability to give Signals expanding to all three dimensions of time : Past -
Present - Future

They say it takes thirty years to properly study ICHIMOKU. I agree with that, but my personal
philosophy is to apply Pareto’s Principle when it comes to acquiring knowledge with practical
implementation. I may never be able to say that I studied ICHIMOKU enough but here I’ll be
sharing with you the 20% of my applicable knowledge on the System that will give you 80% of
profitable results with your trades.

Once you follow my notes and get a feeling of the System, I’m sure you’ll fall with love with it
and you’ll definitely see the difference in your Bank Account.
ICHIMOKU KINKO HYO is comprised of 5 Lines. Two of them are moving in the Present
Dimension of Time , one is moving in the Past and the remaining two are moving in the Future.

Let’s start from square #1 :)

The Definition of Uptrend using ICHIMOKU is that price is going up when it is moving above
the KUMO. Of course there are more elements giving a more precise picture of the uptrend such
as price action’s characteristics slopping of ICHIMOKU Lines and their relationship with price
action as well as inclination and thickness of KUMO and morphology of leading KUMO’s Edge.
The Definition of Downtrend using ICHIMOKU is that price is going down when it is moving
below the KUMO. Of course there are more elements giving a more precise picture of the
downtrend such as price action’s characteristics slopping of ICHIMOKU Lines and their
relationship with price action as well as inclination and thickness of KUMO and morphology of
leading KUMO’s Edge.
And now let’s see ICHIMOKU 5 Powerful Lines :)
ICHIMOKU KINKO HYO is about ...relationships and emotions :)
Its 5 Lines have relationships with time, with price action and with each other.
And they also have emotions. Their emotions are expressed with their inclination/slope. Let’s
say that when they’re joyous they go up and when they’re sad they go down. When they are at a
stage of confusion, indecision or shock, they turn flat. I know this whole intervention of mine to
the interpretation of this Technical Indicator looks quite unconventional and childish but trust
me, I do it on purpose. I want to feed your mind with images because that’s how our mind works.
It converts every piece of information it gets into images and then digests them.

Other Lines show a more stable psychological profile in terms of expressing their emotions,
while others are quite unstable to the degree of bipolar :) Depending on a Line’s idiosyncrasy
and its current attitude, you can understand whether you should base any of your trading
decisions to it or not. Don’t worry, I’ll make it crystal clear to you as we discuss further on the
Lines :)

Below I’ll present ICHIMOKU KINKO HYO using a Metaphor-Model I borrowed from Life
and I’m sure it will help you get a better understanding of the System having fun while exploring
its elements.

ICHIMOKU is about Life encoded :)

The first Line of the System we’ll discuss about, is Tenkan Sen.
I will not get into technical details because I’m not a Mathematician, but the way Tenkan Sen has
been calculated, being the moving average of the difference between the opening and the closing
price for the last 9 periods - when you read periods, think candlesticks- it has a significantly
different appearance than a 9 SMA -Simple Moving Average- or EMA - Exponential Moving
Average- in terms of statistical validity which becomes of key importance especially on stages
where price fluctuates till it gathers steam to make a strong move and on price-action turning
points.
Tenkan Sen is the first “obstacle” price has to break through when it changes direction. That’s
why Price/Tenkan Sen Cross is the earliest Signal on ICHIMOKU and the higher the Time-
Frame we see it happening, the higher the probability of catching a big move early.

If Price Action is YOU, imagine Tenkan Sen as your Significant Other, the person you are in
love with, your soul mate or even your ideal soul mate if there is not one in your life right now.
If YOU are the Price Action, Tenkan Sen is always close to you, your last thought before you
sleep in the night, your first thought when you wake up in the morning. When you go Up,
Tenkan Sen is your Alter Ego following each step of yours, supporting your efforts and giving
you a push when things get tough. It is sloping to the same direction as you keeping a small
distance as much as necessary to let you “breathe”. When you are falling, Tenkan Sen is
hanging over you ready to give a helping hand and pull you up. Whenever YOU - the price
action- think about changing direction, Tenkan Sen will become flat trying to convince you
about your best interest. If you decide to continue your route, it will follow you keeping the same
pace as you and if you are really willing to change direction, Tenkan Sen will facilitate you
angling so that you can jump above or below it easier.

If we want to make a Trading Decision based on Price/Tenkan Sen Cross, seeing a candlestick
CLOSING above or below Tenkan Sen is not enough to make us BUY or SELL respectively.
We need to see Tenkan Sen “convinced” about the new direction of the Price Action and that
means we should WAIT to see it also angled Upwards or Downwards.
And in case we enter a trade based on Price/Tenkan Sen Cross and Tenkan Sen’s slope, a
Price/Tenkan Sen cross to the opposite direction is more than enough to exit. No need to wait
for Tenkan Sen to get angled to the opposite direction too. Because by the time it happens, we
may see all our earned pips vanished.

Tenkan Sen’s relationship with price is so strong and “karmic” that if you could take away only
one element regarding ICHIMOKU, that should be this relationship and the Signals it gives.
Applying this knowledge on M15 Time-Frame, you will be on your way to Forex Profits.

Tenkan Sen is the “threshold” for a valid correction.

After a fall, we need to see a bullish candlestick CLOSING above Tenkan Sen in order to
consider that a “valid” correction happened. After a “valid correction” price may continue its
fall CLOSING below Tenkan Sen again. If Tenkan Sen slopes Downward, we enter Short
(SELL) riding the downtrend.

Or price may want to move higher after the “valid correction”. In that case, we make our
estimates considering other ICHIMOKU elements and may decide to enter Long (BUY) if
Tenkan Sen slopes Upwards.
In case we decide to trade a Correction, we ALWAYS trade it from smaller Time-Frame such as
M15. Smaller Time-Frame helps us “milk” the correction without seeing our pips negated by a
sudden big move when the price decides to end the correction and resume its main trend.

Similarly, after an upward move, we need to see a bearish candlestick CLOSING below Tenkan
Sen in order to consider that a “valid” correction happened. After a “valid correction” price may
continue its upward move CLOSING above Tenkan Sen again. If Tenkan Sen slopes Upward,
we enter Long (BUY) riding the uptrend.
Tenkan Sen forms a SOFT WIRE of Support below price action when price goes UP or a SOFT
WIRE of Resistance above price action when price goes down.

But not all Price/Tenkan Sen Cross Signals are equal.

As you’ll see on the following H4 Time-Frame Chart of XAGUSD (SILVER), there are three
different classifications of Price/Tenkan Sen Cross Bullish or Bearish Signals.

1. WEAK Signals
a. Bullish Price/Tenkan Sen Cross Signals that appear below the KUMO are
considered WEAK because they most possibly manifest a minor correction as the
price is making Lower Highs on its way DOWN.
b. Bearish Price/Tenkan Sen Cross Signals that appear above the KUMO are
considered WEAK because they most possibly show a minor correction as the
price is making Higher Lows on its way UP.
2. NEUTRAL Signals
a. Bullish Price/Tenkan Sen Cross Signals that appear inside the KUMO are
considered NEUTRAL because KUMO stands for Market’s Equilibrium Zone
and practically odds for price to go Above or Below it are almost equal. Of course
a Bullish Price /Tenkan Sen Cross inside the body of a BULLISH KUMO has a
slight advantage compared to a Bearish Price/Tenkan Sen Cross, because
 BULLISH KUMO reflects BUY-ORDERS and offers Support to the upward
move.
b. Bearish Price/Tenkan Sen Cross Signals that appear inside the KUMO are
considered NEUTRAL because KUMO stands for Market’s Equilibrium Zone
and practically odds for price to go Above or Below it are almost equal. Of course
a Bearish Price /Tenkan Sen Cross inside the body of a BEARISH KUMO has a
slight advantage compared to a Bullish Price/Tenkan Sen Cross, because
BEARISH KUMO reflects SELL-ORDERS and offers Resistance reinforcing the
downward move.

3. STRONG Signals
a. A Bullish Price/Tenkan Sen Cross above the KUMO is considered a STRONG
Signal because it means either the birth of a strong Upward Move or its
continuation after a minor correction.
b. A Bearish Price/Tenkan Sen Cross below the KUMO is considered a STRONG
Signal because it means either the birth of a strong Downward Move or its
continuation after a minor correction.

TRADING WITH TENKAN SEN

This Strategy applies to ALL Time-Frames on the condition there is clear Trend on DAILY
Time-Frame which means the Leading KUMO on DAILY must be clearly sloping UP or
DOWN. The younger the Move on DAILY, the higher your profitability will be.

From my experience though, it is advisable to pick as high Time-Frame as possible in order to

avoid “NOISE” of the Market which translates into lethal spikes and bad psychology. The
Strategy allows you to take the trade from higher Time-Frames because it’s a LOW RISK
Strategy. Even if you are Hedging a Red Account trading with a Ninja Position, it’s safer to
“SURF” the Market’s Waves from H1 or even H4 than from M15 Time-Frame. Although from
M15 you have the chance to make more pips faster, H1 or H4 will take you there slowlier but
safer, plus your trade will almost be on “Auto-Pilot” because there is a huge difference between
checking a trade every 4 Hours instead of every 15 Minutes.

BUY when a bullish candlestick CLOSES above Tenkan Sen and Tenkan Sen is angled or
curved UPwards. Place SL as many pips below Tenkan Sen angle as double the amount of pips
of the latest Down Spike. Trail your SL either below Kijun Sen or as many pips below Tenkan
Sen as the body of the previous candlestick. EXIT when a bearish candlestick CLOSES below
Tenkan Sen and Tenkan Sen is FLAT or angled/curved DOWNwards.

***TIP : when price is moving above the KUMO take mostly Long Trades, unless the move is
getting old and weak.

SELL when a bearish candlestick CLOSES below Tenkan Sen and Tenkan Sen is angled or
curved DOWNwards. Place SL as many pips above Tenkan Sen angle as double the amount of
pips of the latest Up Spike. Trail your SL either above Kijun Sen or as many pips above Tenkan
Sen as the body of the previous candlestick. EXIT when a bullish candlestick CLOSES above
Tenkan Sen and Tenkan Sen is FLAT or angled/curved UPwards.

***TIP : when price is moving below the KUMO take mostly Short Trades, unless the move is
getting old and weak.
Here we see GBPJPY H4 Time-Frame and how easily we could surf the waves of price-action
netting 915pips. Clear Trend on DAILY Time-Frame. For the Short Trade we didn’t hesitate
because price was moving below the KUMO. But the strong Bullish Reversal Candlestick at the
bottom of the move and the steep UPward inclination of Tenkan Sen right after price closed
above it, left no doubt for BUYING.
We saw a clear trend on DAILY Time-Frame of AUDUSD so we knew we could be looking for
a nice trade. SHORT (SELL) Trade was “by the book” because price was moving below the
KUMO. The only reason we took the LONG (BUY) Trade although price was not above the
KUMO is, that we saw the big bullish candlestick nailed inside KUMO’s body showing that the
price was determined to go through the KUMO. We combined this with the fact that price made
a DOUBLE BOTTOM “W” pattern which is a BULLISH Reversal pattern and we Entered
LONG.
Here, on AUDUSD H1 Time-Frame, after we saw a Clear Trend on DAILY, we took the Short
Trade because it had all the characteristics of a Bearish Breakout. But we didn’t take the Long
Trade after price Closed above Tenkan Sen because the price was movig below the KUMO, the
distance between Price-Action and KUMO both vertically and horizontally was big and we
assumed that price would find resistance at Kijun Sen level, which was translating to a less than
30pips net profit, therefore our Reward Assessment didn’t allow us to take the trade.
Using the strategy from M15 Time-Frame has benefits but also has some handicaps.

Benefits are:
 ● Nice profits faster thanks to the “Accordion Effect”
● Catching Big Moves early

Handicaps are:
● Unless you monitor the price-action from M5 till you see a KUMO Breakout happening
there so you enter from M15 TF with a fresh KUMO Breakout, you may experience more
losses than gains.
● Much “NOISE” especially during the peak of the two first opening hours of London and
New York Markets. That means you may have difficulty entering properly because the
first candlestick may represent 70% of the Move and by the time you jump in reversal
may have started and opposite Price/Tenkan Sen Cross may happen a few pips against
your glorious Entry forcing you to close position with minor losses.
● It requires frequent monitoring which means you’ll have to check the trade when every
M15 Candlestick closes. I don’t know if this holds any statistical evidence, but I have
noticed that the more frequent I check my trades the more I tend to mess up with them
because of this silly insecurity that pushes me to do something instead of standing there
….”doing nothing”.

The second Line of ICHIMOKU we’ll study is Kijun Sen. Just like Tenkan Sen, Kijun Sen
moves in the present, together with Price-Action.

Kijun Sen is a moving average calculated based on the difference between the opening and the
closing prices of 26 periods. Therefore it represents a harder level of Support than Tenkan Sen
when price goes up and also a harder level of resistance than Tenkan Sen when price goes down.
So while Tenkan Sen is the SOFT WIRE of Support on an Uptrend, Kijun Sen is the HARD
WIRE of Support running below Tenkan Sen.
The opposite happens on a Downtrend. Here Kijun Sen is the HARD WIRE of Resistance
running above Tenkan Sen which is the SOFT WIRE hovering above Price Action.

There is a physiology in Kijun Sen’s move.

Kijun Sen is extremely Sensitive to price action change of direction but is immune to
fluctuations, so it only changes direction when price action has truly changed direction. That is
one of ICHIMOKU System’s KEY ELEMENTS and we’ll study it in detail below.

-How does Kijun Sen react to price action fluctuations ?

-It instantly becomes flat. That’s the reason why I like to call it “THE MOVE’S BRAKE”

If we are in a Trade while Market is strongly Trending, Kijun Sen going FLAT can be a tool
among our EXIT Criteria Arsenal.
So practically on a Trending Market using ICHIMOKU and Kijun Sen Exclusively you can spot
excellent Entries after Kijun Sen Plateaus on two Conditions :
❏ BUY if Candlestick CLOSES above Kijun Sen after a Kijun Sen Plateaux and if Kijun
Sen slopes UPwards
❏ SELL if Candlestick CLOSES below Kijun Sen after a Kijun Sen Plateaux and if Kijun
Sen slopes DOWNwards

Kijun Sen ALWAYS follows the price-action’s direction. So Kijun Sen change of Direction,
combined with Tenkan Sen inclination to the same direction, gives a Powerful Signal, especially
when it is confirmed by Chikou Span cross with Past Price Action to the same direction.
If you are not fascinated by Kijun Sen by now, there’s more to this line’s magic.
In terms of price action change of direction, the second Signal ICHIMOKU gives after
Price/Tenkan Sen Cross, is Price/Kijun Sen Cross most of the times. I say “most of the times”
because there are some rare occasions when Tenkan Sen/Kijun Sen Cross or Chikou Span/Past
Price Cross happens simultaneously or right after Price/Tenkan Sen Cross.

Kijun Sen’s properties also include its distance from Tenkan Sen when both follow price action
UP or DOWN. This distance represents momentum and how much price has escaped away from
support/resistance levels. I like to call it “HAPPY SCISSORS EFFECT” but before we discuss
about it let’s see the CHAMPAGNE Signal :)
Again there is a Classification of Price/Kijun Sen Cross Signals depending on their direction and
positioning in regards to the KUMO.
So a Bullish Price/Kijun Sen Cross above the KUMO is considered Strong, inside the KUMO is
considered Neutral and below the KUMO is considered Weak.

Conversely, a Bearish Price/Kijun Sen Cross above the KUMO is considered Weak, inside the
KUMO is considered Neutral and below the KUMO is considered Strong.

But my opinion is that these Classifications have no particular value as pieces of theoretical
knowledge per se. Because applied Technical Analysis has its own theory.

-Why do I say that?

-Because when I see a Flat KUMO on a relatively high Time-Frame such as H1, H4 or Daily and
a Bullish Price/Kijun Sen happens below the KUMO, with Kijun Sen changing direction ,
Tenkan Sen Sloping Upwards and Chikou Span crossing above past price action going Up,
usually a combination of elements announcing a strong Bullish KUMO Breakout, I see nothing
Weak about the Price/Kijun Sen Cross. In fact, this is the kind of BUY Signal that every trader
dreams of. And the opposite is true for a Bearish Price/Kijun Sen Cross with Kijun Sen
changing direction going Down, Tenkan Sen going down to , after a Bullish Rally. This kind of
SELL Signal usually is the prelude to a very profitable Short Trade.

Except Price/Kijun Sen Cross there is also one more extremely powerful Signal we get from
ICHIMOKU regarding Kijun Sen and that is Tenkan Sen/ Kijun Sen Cross which if follows a
strong move I like to call it “CHAMPAGNE SIGNAL” because it signals a Big Trade which will
give you so many pips, you’ll want to celebrate it opening a Champagne :)

-Why is Tenkan Sen/Kijun Sen cross so powerful?

-Because ONLY after crossing with Tenkan Sen will Kijun Sen change direction and we know
that Kijun Sen changes direction when price-action TRULY changes direction. Therefore, if we
follow Kijun Sen, we follow the trend. This principle has tremendous value when used in a
Trending Market.

TRADING FOLLOWING KIJUN SEN : a simple strategy applicable on ALL Time-Frames,

recommended for higher ones (H1, H4, Daily), where it may turn into a candlestick per
candlestick trading System.

1. We BUY after a KIJUN SEN Plateau and after a Bullish Tenkan Sen/Kijun Sen cross
with Kijun Sen going UP. We EXIT immediately on the next KIJUN SEN Plateau and
we BUY again when KIJUN SEN continues going UP, EXITING on the next KIJUN
SEN PLATEAU.
2. We SELL after a KIJUN SEN Plateau and after a Bearish Tenkan Sen/Kijun Sen cross
with Kijun Sen going DOWN. We EXIT immediately on the next KIJUN SEN Plateau
and we SELL again when KIJUN SEN continues going DOWN.
Furthermore, a “Champagne Signal” is followed by the “SCISSORS EFFECT” where Tenkan
Sen and Kijun Sen go to the same direction with the distance between them gradually increasing
reflecting increasing momentum.
Actually, what makes “Scissors Effect” so powerful is the fact that both Tenkan Sen and Kijun
Sen are Lines that don’t change order unless a super-strong Price Action direction change occurs.
These two lines take their “job” very seriously and they wouldn’t jeopardize their “reputation”
signaling a fake move. So their cross and re-arrangement in opposite order, gives a very strong
and early confirmation that price action changed direction for now.

It took me years to practice my eyes enough to see that Tenkan Sen and Kijun Sen, combined
with Chikou Span, are more powerful even than Bollinger Bands -which we’ll study next-
because they measure volatility, momentum and point out Entry Points easier and with higher
accuracy than Bollinger Bands.

While Bollinger Bands are price-action containers, Tenkan Sen and Kijun Sen with their
inclination and distance between each other, form weak horizontal flip-flop scissors or
tremendously powerful Upward or Downward scissors for which we get pretty early Signals
from Chikou Span (Ichimoku green line) when it crosses above or below past price action, going
to the direction of the trend.

I have realized that the more I use my imagination to understand ICHIMOKU Signals, the closer
I get to “feeling” the Market. When Bullish Scissors open -after a Bullish Tenkan Sen/Kijun Sen
cross- it’s like Tenkan Sen pushing price UP while Kijun Sen reinforces that action.
Let’s see some TRADE SETUPS with KIJUN SEN Trading Strategy on various Pairs and Time-
Frames.
On the trade above, we traded GOLD from M5 Time-Frame entering SHORT (SELLING) after
Tenkan Sen/Kijun Sen Bearish Cross when Kijun Sen Plateau ended with Kijun Sen sloping
DOWNWARDS. Stayed in while KIJUN SEN was falling or making Plateaus with Tenkan Sen
above it and EXITED when Kijun Sen made a Plateau with Tenkan Sen being below it. 20pips
net profit.
Above we see a nice 70pips trade on USDCAD H1 Time-Frame. Entered when BOTH Lines
were sloping UP with Chikou Span confirming it and Exited when BOTH Lines turned FLAT.
On AUDUSD H4 Time-Frame, we saw a bearish Tenkan Sen/Kijun Sen Cross, Entered Short
(SELL) when BOTH Lines sloped Down with Chikou Span going straight down and Exited
80pips later when BOTH Tenkan Sen and Kijun Sen went FLAT and Chikou Span confirmed
that.

-Would it be wrong Exiting when a Bullish Tenkan Sen/Kijun Sen happened?

-Theoretically NO. But practically YES, because it’s not about making as many pips as possible
in a general sense, it’s about KEEPING as many pips as possible REAL FAST.

Another important characteristic of Kijun Sen, due to the fact that it is a line that moves in
“present time” along with price action and that it follows the price action being immune to
fluctuations, is the accuracy with which it validates KUMO Breakouts.
Watching Kijun Sen when price is making KUMO Breakouts, can save you from false entries
that will cost you money or can show you early entries in very profitable trades. And that’s a
major advantage.

In terms of its “role” in the panel of emotions, Kijun Sen stands for friends and family. If YOU
are the price action, friends and family are there to Support you as long as they are familiar with
your plans and actions and have given their “approval”. But if you dare to act unpredictably and
break through the social-conditioning glass jar’s walls they have been used to live with…..you’ll
need a lot of strength to fight against their resistance.

Roberto’s 3 Tenkan Sen/Kijun Sen Crosses Rule.

Before we go to the next Line of ICHIMOKU, I’d like to present here a super-powerful Set of
Signals based on Tenkan Sen/Kijun Sen Crosses presented to my FXHOLICS and me by
Roberto Parisi, a dear friend and an FXHOLIC too.

Roberto, with his investigative eye, noticed a very powerful pattern which to me looks like the
“golden key” to the “treasury vault”. He discovered that before a change of direction, price is
making 3 efforts in the form of Tenkan Sen/Kijun Sen crosses to the direction it is moving or to
the opposite one. The two first are either confirming the direction to which price is currently
moving, or they are crosses to the opposite direction . So if the price is falling, they may be
Bearish Tenkan Sen/Kijun Sen Crosses and if it’s going up they may be Bullish ones. Or if the
price is falling, we may see two Bullish TS/KS Crosses and if it is going up, we may see two
Bearish crosses. The third one is the critical. If it succeeds and is the same as the two previous
ones, it means we should expect Continuation of the move to the same Direction if all three
crosses are to the direction of the move, or change of direction if all three crosses are to the
opposite direction of which the price has been moving. If it fails and we see the 3rd Cross being
to the opposite direction, it means price is going to make an opposite move which may either be
a Correction or a proper Reversal if the two first crosses were to the direction of the current price
move or we’ll see the continuation of the price action to the current direction if the two first
crosses were to the current price move direction. Roberto’s 3 Crosses Rule applies on all Time-
Frames and can be used as a stand-alone System or combined with other ICHIMOKU Elements
or even extra Tools.

THANK YOU Roberto!

Let’s see Roberto’s 3 Crosses Rule in action.

The third Line of ICHIMOKU we’ll study is Chikou Span. Unlike Tenkan Sen and Kijun Sen
that move in the present together with price-action, Chikou Span is price-action’s CLONE
shifted 26 periods - when you read “periods” think “candlesticks”- in the past.
Chikou Span in the Green Line of ICHIMOKU and I like to call it “the magical line” because
magical things happen when it touches past price action and crosses above or below it.
Practically, Chikou Span is price-action’s shadow.

Chikou Span helps us compare current Price-Action with the recent past getting a statistically
significant picture of current price’s action intentions at a glance.

What makes Chikou Span such a valuable tool is the following LIST of Hot Features :

1. Chikou Span gives us the “green light” about price’s strength to change direction
2. Chikou Span has a unique “determination” to break through all obstacles developing a
brand new trend
3. Chikou Span helps us estimate how soon a directional change will possibly happen by
estimating its distance counted in candlesticks from the point where it will most possibly
touch past price action.
4. Chikou Span is extremely “touchy”. When we see it going straight up during an UP Rally
or straight down during a FALL, and then moving in a ZIG ZAG mode, we know its
batteries have ran out of energy. It needs to TOUCH either past price or past KUMO in
order to get re-energized and cross above/below past price giving us a strong Entry
Signal.
 5. Chikou Span serves as an excellent Take-Profit Placement guide because it forms
Support/Resistance Levels copying price action. (Roberto Parisi’s method)
6. Chikou Span validates a Bullish KUMO Breakout, when it has crossed above past price
action and above past KUMO. It validates a Bearish KUMO Breakout when it has
crossed below past price action and below past KUMO.

Chikou Span also gives us the “measure” of time it will take for the price to end its consolidation
phase and make a strong move. This way it helps us estimate “how soon” we should expect the
breakout to happen by estimating how soon Chikou Span is going to touch past price action
measuring the candlesticks in between.
Chikou Span is a valuable “reporter” of recent Support/Resistance Levels, guiding us towards
placing our Take-Profit Target Orders during Trade Setups.
Using Chikou Span as Take-Profit Placement Guide, is a method presented to my FXHOLICS
and myself during one of our Workshops, by Roberto Parisi, a dear friend from Italy and an
FXHOLIC.

The basic Signals given by Chikou Span are :

❖ Chikou Span/past Price Cross : great confirmation for strong corrections or even
reversals
❖ Chikou Span/past Tenkan Sen Cross : confirmation of correction’s strength
❖ Chikou Span/past Kijun Sen Cross : when we see this signal, the possibility of a KUMO
Breakout and a Reversal increases
❖ Chikou Span /past KUMO Cross : validation of reversal

Going back to my metaphor, if YOU are the Price, Chikou Span is your memory.

The two last Lines of ICHIMOKU KINKO HYO we’ll discuss about are Senkou Span A and
Senkou Span B and they are making the KUMO.

The KUMO -which means “cloud” in Japanese- gives a more visual and two dimensional
representation of SUPPORT and RESISTANCE ZONES. A Bullish KUMO reflects BUY
Orders while a Bearish KUMO reflects SELL Orders.
KUMO has a point where we should always FOCUS our attention, its Leading Edge. Leading
Edge’s morphology speaks volumes about price’s intentions in the immediate future. SHARP
EDGE pointing Up or Down shows strength of move and signals continuation. ROUNDED
EDGE shows that move has started weakening and signals possible reversal. FLAT EDGE
shows sideways movement and if KUMO is also thin, FLAT EDGE signals consolidation before
a Breakout.

Also, KUMO has TWO key characteristics which in priority order of importance are:

1. Its INCLINATION : flat KUMO means that Market is in Equilibrium State where
Buyers and Sellers consider the price being fair. When KUMO is Flat but its morphology
switches from Bullish to Bearish and vice versa, price is Ranging. When KUMO is
FLAT and THIN price is is Consolidation and we expect a Breakout, a Strong Move to
one or the other Direction. When KUMO has strong inclination, it usually becomes
LINEAR, almost VERTICAL and seems to have no thickness at all. We see that during
aggressive breakouts. But even if sloping KUMO takes the shape of a RIBBON, as price
makes minor corrections on its way up or down, still move’s strength is apparent.

-What does KUMO Inclination mean to the Trader?

-Keeping our eye nailed to the LEADING KUMO, if we’re considering BUYING we must Enter
only if the UPPER Edge of the Leading KUMO is sharp pointing UPwards and its LOWER Edge
is either curved or sloping UPwards too. If the LOWER Edge is FLAT, we WAIT. Conversely,
if we’re considering SELLING we must Enter only if the LOWER Edge of the Leading KUMO
is sharp pointing DOWNwards and its UPPER Edge is either curved or sloping DOWNwards
too. If UPPER Edge is FLAT, we WAIT!
 2. Its THICKNESS : the vertical distance between Senkou Span A and Senkou Span B -
the Upper/Lower Borders of the KUMO- seen on the chart as a shaded area which makes
the BODY of the KUMO, shows building up Orders Volume and also reflects
Momentum. When KUMO thickness becomes ZERO leading to a Senkou Span A/B
Cross, signals Trend Reversal as KUMO switches from Bearish to Bullish and vice
versa. It’s worth observing how Senkou Span A which always faces price Action,
making the Lower Border of a Bearish KUMO and the Upper Border of a Bullish
KUMO, seems to be Tenkan Sen Clone shifted in the future.

-What does KUMO Thickness mean to the Trader?

-Keeping our eye nailed to the LEADING KUMO, we know that Thickness represents orders. A
Thick Bearish KUMO hanging above price, represents SELL ORDERS. A Thick Bullish
KUMO flying below price, represents BUY ORDERS. Below are the possible scenarios and how
we should evaluate them :

Thick Bearish KUMO hanging above Price Action :

1. Flat Top KUMO
● Close to Price Action : Price will try to make a Bullish Reversal. If it finds the strength
to move through the KUMO, then we should expect some ZIG-ZAG moves above and
below it before the final valid Bullish KUMO Breakout happens. If it doesn’t find the
strength to move through it, initially price will respect the Lower Border of the KUMO.
Next, we may even see a Downward move looking like a fake Bearish Breakout only to
realize that actually price wanted to tame the leading KUMO making it thinner and then
turning it bullish so it breaks through and above it easier.
 ● Away from Price Action : Price will attempt to make a Bullish Reversal in a smoother
manner because it can consolidate gathering “steam” and at the same time “tame” the
leading KUMO so by the time it gets closer to KUMO’s body, breaking through it will be
a relatively easy task.
2. Sloping KUMO
● Close to Price Action : Price’s attempts to move through the body of the thick KUMO
will most possibly fail and the closer it can get to a proper correction is respecting the
Lower Border of the KUMO with most possible scenario the continuation of the fall.
● Away from Price Action : only the fact that the KUMO is sloping is enough to leave no
space of doubt in our mind that price will continue falling.

Thick Bullish KUMO flying below Price Action :

1. Flat Bottom KUMO
● Close to Price Action : Price will try to make a Bearish Reversal. If it finds the strength
to move through the KUMO, then we should expect some ZIG-ZAG moves below and
above it before the final valid Bearish KUMO Breakout happens. If it doesn’t find the
strength to move through it, initially price will respect the Upper Border of the KUMO.
Next, we may even see an Upward move looking like a fake Bullish Breakout only to
realize that actually price wanted to tame the leading KUMO making it thinner and then
turning it bearish so it breaks through and below it easier.
● Away from Price Action : Price will attempt to make a Bearish Reversal in a smoother
manner because it can consolidate gathering “steam” and at the same time “tame” the
 leading KUMO so by the time it gets closer to KUMO’s body, breaking through it will be
a relatively easy task.
2. Sloping KUMO
● Close to Price Action : Price’s attempts to move through the body of the thick KUMO
will most possibly fail and the closer it can get to a proper correction is respecting the
Upper Border of the KUMO with most possible scenario the continuation of the upward
rally.
● Away from Price Action : only the fact that the KUMO is sloping is enough to leave no
space of doubt in our mind that price will continue flying.
Senkou Span A / Senkou Span B Cross is a Trend Reversal Signal because it corresponds to the
birth of a fresh KUMO usually to the opposite direction of previous.
But a TRUE Reversal is not always the end result of this Signal. The Signal draws its validity by
the combination and the strength of the previous Signals we get, especially the Tenkan Sen/Kijun
Sen Cross and Tenkan Sen/Kijun Sen common slope.

A valid Senkou Span A/B Cross is followed by a KUMO Breakout which is ICHIMOKU
System’s most powerful Signal.

A Bullish KUMO Breakout is validated by Chikou Span if it has crossed above past price action
and above past KUMO. A Bearish KUMO Breakout is validated by Chikou Span if it has
crossed below past price action and below past KUMO.

But since Chikou Span is moving in the past, I think that KUMO Breakout validation gets a
higher statistical significance when it’s done by Kijun Sen which is moving in present time along
with price, being immune to its fluctuations, therefore reliable.

What makes ICHIMOKU an extremely valuable Trading System, is the sequence of Signals we
see in the form of a “chain reaction“ when a true reversal takes place. On the AUDUSD, H4
Time-Frame Chart above, we see the Reversal Sequence in full play. The same sequence
happens on ALL Time-Frames and before we dig deeper into its anatomy, I’d like to share here
an observation of mine which you may find quite helpful especially when you’re trapped in an
unexpected correction that’s getting alarmingly deeper than you can afford.
First of all, please know that this kind of accident - finding yourself trapped in an unexpected
correction- has its roots in two flaws of your character which are common to all traders because
they’re psychological traits of human nature :

1. You either jumped in prematurely due to your enthusiasm while a strong move was in
progress -quite common mistake- or you re-entered right after you closed a winning
position -even more common mistake.
2. You can’t stand the idea of seeing your SL hit, so you trail it forever as Market moves
against you suffering from the “frozen trader” syndrome -all times classic mistake-.

The bad news are that you may have to experience the pain of a few hard loses before you decide
to become more disciplined with your SL Policy. The good news are that I have noticed that if a
Strong KUMO Breakout, validated by Chikou Span/Kijun Sen happens on M5 Time-Frame with
price resuming its prior trend going to your favor, for the vast majority of trades, Correction is
over. So keep your eyes focused on M5 TF till you see the KUMO Breakout and you’ll most
possibly get out of the mess intact.

Now back to the anatomy of the Reversal and the Signals Sequence.

Let’s assume that price has been falling and we are looking for signs of reversal.
If the price wants to stop falling and try to reverse, the first sign we’ll see on the leading KUMO
is that it will become horizontal. Price will make efforts to negate its most aggressive
characteristic, Inclination. So we’ll see the leading KUMO having a Flat Top/Belly Down shape.

Although the leading KUMO has turned horizontal and its top is FLAT already, its edge is still
sharp pointing downwards. That’s because Senkou Span A - Lower Borderline of Bearish
KUMO- is Tenkan Sen’s “clone” in the future and Tenkan Sen still goes Down.

But Kijun Sen -which I like to call the “move’s brake”- has gone FLAT and that’s an early
warning that the price will try to make a correction if not a reversal.
Now let’s use some imagination…

The Princess and the Dragon

 Imagine that Price is a Princess, captive of a
mighty Dragon , the KUMO.

She wants to escape by all means and she’s

determined to fool the Dragon and put him to
sleep so she runs away.

First, she has to turn him Horizontal lying down

and then she must stand still or dance in a zig
zag mode mesmerizing him and making him fall
asleep. As Dragon falls asleep, he loses power
(momentum) so KUMO becomes thinner and
thinner till it transforms into a Bullish one.

The transformation moment with an extremely

thin KUMO -a Dragon sleeping deeply- is the
perfect chance for the Princess to break through
and escape to the other side (KUMO Breakout).

So during a reversal, first Price turns KUMO

horizontal, then thinner, then it gives birth to an
opposite KUMO and Price makes a KUMO
Breakout. The process is the same for both
Uptrends or Downtrends.

Back to AUDUSD on M15 Time-Frame. Price-Princess continued her effort to “tame” the
KUMO-Dragon and put it to sleep.
On the M15 Time-Frame Chart of the pair above we also see the SEQUENCE of the Signals we
get from ICHIMOKU as price is trying to change direction. This SEQUENCE is what makes
ICHIMOKU one of the most powerful Trading Systems available today.

-Why?
-Because the appearance of the Signals, the inclinations of the Lines, the strength of the
candlesticks and leading KUMO’s dynamics help the Trader understand if this is the beginning
of a Reversal or the Fade Out of a Correction. Depending on the Time-Frame where we see this
change of price action happening, we’ll base our trading decisions accordingly.
In the AUDUSD M15 TF above, finally the price-princess lost all her strength while trying to
escape the Bearish KUMO-Dragon , Dragon woke up suddenly and she had to run lower staying
away from his rage (linear almost vertical extremely aggressive Bearish KUMO).

The “moral” of this move is that when price Changes Direction, it’s always worth WAITING TO
SEE a valid KUMO Breakout before we make our Trading Decision. If the Valid KUMO
Breakout happens to the new Direction, it means we can catch a Young & Strong Move early
right after it’s born and that is a huge advantage. If the price fails to make a valid KUMO
Breakout to the New Direction and instead makes a valid KUMO Breakout continuing its
previous Direction, it means we can ride a strong trade right after the completion of a Correction
and that’s the ideal Entry point when we want to catch an ongoing trend.

Although ICHIMOKU KINKO HYO is an excellent Trading System for Trending Markets, I
have noticed an effect, the “KUMO NECKLACE” which we see when price is consolidating and
KUMO shapes a “necklace” of Bullish and Bearish pieces in horizontal order.

When “KUMO NECKLACE” appears, we should expect a Bullish Breakout if the last KUMO-
PIECE is Bearish or a Bearish Breakout if the last KUMO-PIECE is Bullish.
By definition, KUMO Breakout is ICHIMOKU KINKO HYO’s strongest Signal because if price
changes side of the KUMO we’re looking at a reversal of the trend and if it fails to do so, it
always resumes its previous trend.

Regarding my philosophical metaphor, if price is YOU then KUMO represents your beliefs. Just
like price can only go up or down, you can either go up building the life you want or down
surrendering to the life you’re afraid of.
Bearish KUMO is all about your SELL-Orders in Life, your Fears, Doubts and Limitations
everything you do selling yourself short, all the choices that keep you falling and push you
lower.
Bearish KUMO is made of your “can’t be done” and “won’t make it” and “impossible” and “not
my fault” and “unthinkable” and “I’m not ready”. And yes, Bearish KUMO is a ceiling you
have created in your mind. It’s made of all the BIG LIES you say to yourself when you prefer to
stay shrinked inside your comfort zone instead of expanding realizing your full potential.
Bullish KUMO is about your dreams and aspirations, your wants and your desires, your goals
and your plans to reach them. Bullish KUMO is the foundation of your growth. It’s made of the
set of beliefs that push you higher. As you fly, Bullish KUMO is there to offer you support and
protect you from falling. Every failure brings you down to it and then you stand up on its solid
ground, spread your wings and fly higher.

Bullish KUMO is made of your “I can” , “I’ll try”, “I’ll go for it”, “I want”, “It’s totally up to
me”. It’s about how much you believe in yourself, it’s about self-confidence and a winning
attitude. It’s not how many times you fall - everybody falls- it’s how many times you stand up
again and keep going.
KUMO TRADING : The term “KUMO Trading” is also used instead of ICHIMOKU Trading,
but the way I use it here is more specific.

The Basic Concept of KUMO Trading is that we BUY with a validated Bullish KUMO Breakout
and SELL with a validated Bearish KUMO Breakout on the SAME Time-Frame and vice versa.
Actual KUMO Trading suits the profile of Traders who are truly Sophisticated Investors. This
kind of trading yields incredible profits especially from Time-Frames such as DAILY or higher.
But entering from a relatively high Time-Frame requires sufficient Account Tolerance in high
Risks.

Sofia’s 4 Time-Frames ICHIMOKU Strategy

I have developed a KUMO Trading System which minimizes Entry Risk guiding the Trader
through “surgical precision” entry process and instead of EXITING when a KUMO Breakout to
the opposite direction happens, I have replaced the “opposite KUMO Breakout” EXIT Criterion
with the Kijun Sen change of direction EXIT Criterion instead.

As for the System, it is my 4 Time-Frames ICHIMOKU Strategy starting with a FRESH

Price/Tenkan Sen Cross to the highest possible Time-Frame (the 1st one in the Strategy), a
KUMO Breakout to the same direction on the 2nd Time-Frame (that can be
the Time-Frame we’ll do the KUMO Trading from), 100% strong trend to the same direction on
3rd Time-Frame and on 4th Time-Frame we WAIT PATIENTLY for a Correction with a valid
Price/Tenkan Sen cross to the opposite direction. Then we WAIT for the Corrective Move to
finish, following it from the 4th Time-Frame to the next one going Time-Frame after Time-
Frame wherever price crosses Tenkan Sen to the direction of Correction. We ENTER from the
last Time-Frame where price made a cross above/below Tenkan during correction, after a strong
Price/Tenkan Sen Cross to the direction of the KUMO Breakout, with Tenkan Sen sloping
clearly to this direction and as many confirmations as possible from Kijun Sen, Chikou Span and
Leading KUMO’s morphology.

1st Criterion : A Fresh Price/Tenkan Sen Cross on the highest possible Time-Frame. Looking
for a Fresh Price/Tenkan Sen Cross on a High Time-Frame it means we are looking for a
“young” move and because the higher Time-Frames have a higher degree of validity and
reliability, if we see that Signal on Monthly, Weekly or even Daily Time-Frame it is a piece of
information we can rely upon regarding the direction price wants to go for now.
* Sidenote #1 : we want to see a Price/Tenkan Sen Cross here, not a Close of candlestick above
or below Tenkan Sen. No reason to worry about false move. The 4th Time-Frame will keep us
out of the trade if that’s the case.
** Sidenote #2: a fresh Price/Tenkan Sen Cross ideally means that one candlestick has just
crossed above/below Tenkan Sen. But sometimes we may see 2 or even 3 candlesticks there. If
the last one goes to the direction of the Cross, then this Price/Tenkan Sen Cross is valid. If the
last candlestick goes to the opposite direction of the Cross, candlestick is invalid.
***Sidenote #3: we want to see the body of the candlestick to cross above or below Tenkan Sen.
A spike doesn’t count.
****Sidenote #4: a) Bullish Price/Tenkan Sen cross : in case the body of the candlestick
crosses above Tenkan Sen and it has a down spike, bullish price/Tenkan Sen cross is valid. In
case the body of the candlestick crosses above Tenkan Sen and has a big up spike, cross is
invalid. In case the body of the candlestick crosses above Tenkan Sen and it has an up and a
down spike with down spike bigger, cross is valid. If up spike is bigger than down, cross is
invalid. b) Bearish Price/Tenkan Sen cross : in case the body of the candlestick crosses below
Tenkan Sen and it has an up spike, bearish price/Tenkan Sen cross is valid. In case the body of
the candlestick crosses below Tenkan Sen and has a big down spike, cross is invalid. In case the
body of the candlestick crosses below Tenkan Sen and it has an up and a down spike with up
spike bigger, cross is valid. If down spike is bigger than up, cross is invalid.
2nd Criterion : A KUMO Breakout to the direction of the Price/Tenkan Sen Cross on the 2nd
Smaller Time-Frame means the move is not only “young” but also “strong”.
*Sidenote #1 : the KUMO Breakout doesn’t have to be validated. The 3rd Criterion will save us
from fake KUMO Breakouts but even if that is not enough, the 4th Criterion will prove if move
is still going strong or lost momentum.
**Sidenote #2 : the 2nd Time-Frame is our “target Time-Frame” which means we want to follow
the move from this Time-Frame planning to exit just before a KUMO Breakout to the opposite
direction happens. “Just Before KUMO Breakout” means we’ll use another Signal as our EXIT
Criterion. We will not use Tenkan Sen because it’s too sensitive to price fluctuations and we’ll
not use KUMO Breakout because it may eat up a lot of our earned pips. That’s why the most
ideal EXIT Criterion is Kijun Sen change of direction. That means, after a profitable Short
Trade with price falling, we want to see price moving above both Kijun Sen and Tenkan Sen and
the two lines sloping UPwards after Tenkan Sen having crossed above Kijun Sen. Conversely,
after a profitable Long Trade with price going up, we want to see price moving below both Kijun
Sen and Tenkan Sen and the two lines sloping DOWNwards after Tenkan Sen having crossed
below Kijun Sen.

3rd Criterion : 100% strong trend to the direction of the KUMO Breakout on 3rd Smaller
Time-Frame gives an extra confirmation regarding move’s strength because sometimes, KUMO
Breakouts are only marginal and they represent the fading stage of a corrective move which has
almost lost all its steam.
*Sidenote : when we check 3rd Smaller Time-Frame looking for 100% Bullish or Bearish
picture, a Correction may have already started. That’s OK. We switch to the 4th Time-Frame
immediately and WAIT for the Correction to finish monitoring the price from there.

4th Criterion : we WAIT for a Correction on the 4th Smaller Time-Frame in order to Enter to
the Direction of the KUMO Breakout after it. The correction has to be validated by a
Price/Tenkan Sen Cross and ideally it should be as deep as possible. The 4th Criterion is
Strategy’s KEY element to wildly successful trades. If we are patient enough to WAIT for a
proper correction to happen no matter how long it takes -remember that Market moves as fast as
it wants, not as fast as we want- and if we follow the Entry Criteria religiously, 4th Time-Frame
may open to us the door to a very profitable trade or even save us from entering when price has
lost momentum and the move we spotted fades. When I first developed the Strategy and for
many months later, I was giving the Correction on the 4th Time-Frame as the general criterion
before we Enter. My FXholics helped me understand that this was too vague for them and the 4th
Time-Frame Criterion should be described with crystal clear actionable and easy to understand
and follow steps because in many cases, inexperienced traders -sometimes advanced traders too-
might jump in when price had crossed to the direction we wanted after correction with Tenkan
Sen sloping to that direction, only to reverse a few candlesticks later and hit Stop-Loss. Initially I
thought this was lack of understanding Market’s dynamics from my FXholics’ side. I was totally
wrong. Strategy’s 4th Time-Frame Criterion was incomplete ! I was pushing my FXholics to
remember that on 4th Time-Frame we WAIT for the Correction to start ...as long as it takes...till
our hair grows white if necessary, but I hadn’t explained in excruciating detail and easy to follow
and repeat “with eyes closed” manner, how we would know that Correction was over or that the
pair has decided to reverse and not continue to the direction we expect it to go.

First of all, we need to make an estimate on the magnitude of the correction we expect to see, so
we are certain that price exhausted all its corrective “steam” and now will continue to the main
direction we want to follow.

To have a rough estimate of the magnitude of the correction we should expect in order for it to
be considered adequate, we may use the FIBONACCI Retracement Tool, after the Correction
has started (P/TS Cross on 4th TF). We draw the FIB Tool from the TOP all the way to the
BOTTOM of the last Active Wave. And because the 50.0 FIB Ratio is the most popular
Correction Level -although all FIB Ratios are excellent candidates- we place a mark at that level
so we can have a VISUAL GUIDE while we’re monitoring price during the correction.

So here is how you monitor the Correction and how you know 100% that it is over and you can
Enter when Entry Criteria are met.

Let’s assume that 1st Time-Frame was DAILY where we saw a Fresh Bearish Price/Tenkan Sen
Cross, then on H4 Time-Frame we saw a Bearish KUMO Breakout, on H1 Time-Frame picture
was 100% Bearish and 4th Time-Frame is M30 where we WAIT for an UPward correction.
Remember that the Key-Time Frame is the 2nd one where we had the Bearish KUMO Breakout,
H4, while M30 Time-Frame is the one we’re looking to Enter Short (SELL) from after the
Correction is over.

Correction starts and price moves UPwards. For the Correction to be considered valid, we need
to see a bullish candlestick closing above Tenkan Sen. Tenkan Sen is our level of reference.
Without a level of reference we can’t make any trading decisions. Let’s say that we want to
know how many people have entered or exited a room. Unless they cross the doorstep, we can’t
tell. In our trade’s case, Tenkan Sen is the doorstep.

After a candlestick has closed above Tenkan Sen on M30 Time-Frame there are two possible
scenarios in play :

1. After a couple of candlesticks, if not immediately, a bearish candlestick closes below

Tenkan Sen and Tenkan Sen slopes downwards. This scenario usually appears “too good
to be true” and actually it is. Remember that in a trending Market, price is moving
making 2 Steps to the main direction and 1 Step back. If you want a more sophisticated
way to monitor this, you can use FIBONACCI Retracement Tool adding it to the 4th
Time-Frame making sure you have expanded the tool from the top to the bottom of the
 most recent wave/move. Most frequent correction finish-level is FIBONACCI 50 Ratio,
next comes FIBONACCI 61.8 and last comes FIBONACCI 75 Ratio level. So now you
have a rough estimate about the degree of Correction you should expect to see on the 4th
Time-Frame. Use the 2Steps Forward/1Step Back or the Fibonacci Ratios Rule as a
guide towards estimating the magnitude of Correction you should be expecting on 4th
Time Frame. Unless you see Kijun Sen sloping downwards, Chikou Span going straight
down being far away from past price action and leading KUMO’s edge being sharp
pointing downwards with its top clearly rounded and its body sloping downwards, WAIT.
Many traders are eager to jump in and can’t wait because their time runs faster than
Market’s time, so they jump in without making sure that all the signs I mentioned are
present. And then, they find themselves trapped in an UPward move which may not just
be a correction. How do I know? I’ve made this mistake countless times. I know it’s so
boring to WAIT for all the above mentioned criteria to be met and looks like a never
ending process that takes all the excitement away, but believe me, the truly successful
trades are BORING and are based on trader’s patience coming from knowledge and self
confidence.

2. Price continues going up making big-body bullish candlesticks. We switch to H1 -3rd

Time Frame- and see a bullish price/Tenkan Sen Cross there. If price makes big bullish
candlesticks on H1 TF too, we switch to H4 -2nd Time Frame- and may see a Bullish
Price/Tenkan Sen there. If price starts reversing forming the first bearish candlestick on
H4 Time-Frame, -we don’t wait for a bearish candlestick to close below Tenkan Sen-, we
switch down to M30 Time-Frame and check if ALL our Short Entry (SELL) Criteria are
met:
● Bearish Candlestick closing below Tenkan Sen
● Tenkan Sen angling downwards
● Tenkan Sen crossing below Kijun Sen
● Bearish Candlestick closing below Kijun Sen
● BOTH Tenkan Sen and Kijun Sen sloping downwards
● Chikou Span having crossed below past price action going down
● Leading KUMO sloping downwards with its upper border rounded, its edge sharp
pointing downwards as far away as possible from price

BEFORE WE ENTER SHORT from 4th Time-frame : we make sure there is a

strong valid Bearish KUMO Breakout on M5 Time Frame. That is the ultimate green-
light we want to see before we enter.
- How do we know when to stop looking for a continuation of the Downtrend?
- When we see price cancelling the KUMO Breakout we saw on 2nd Time Frame -
it was a Bearish KUMO Breakout on H4 Time Frame on our example- and reversing,
making a KUMO Breakout to the opposite direction, we go back to the TF to TF process,
 looking for a nice Trade Set up to the opposite direction (to BUY in our example). And
that’s how the Strategy protects us from false Entries.

Tips on the Strategy

Rule of thumb is to check ONE-BY-ONE the 4 Time-Frames and FREEZE on the one where
Criterion is not met yet. It helps keeping a note on our METATRADER Chart on this particular
Time-Frame so we can see our message later on while checking if there is any progress regarding
the Criterion.

KUMO Trading takes a lot of patience especially at the beginning of the move right after the
KUMO Breakout. SL Trailing can be done following the Upper Border of the KUMO on a
Downtrend, or the Lower Border of the KUMO on an Uptrend. We can add positions AFTER
Corrections, making sure that the new positions’ risk is less than 30% of Locked Profits.

We stay in while the price is moving Below the KUMO on a Downtrend or above it on an
Uptrend. We will EXIT when we see Kijun Sen having changed direction sloping clearly to the
new one along with Tenkan Sen and Chikou Span. But because in many cases, even using this
Criterion -instead of Exiting when an opposite KUMO Breakout happens- is a “pips eater”, a
good EXIT Strategy is when price and Kijun Sen start moving towards each other on the smaller
Time-Frame. For financial instruments with extremely high volatility like GOLD, exiting when
an opposite Price/Tenkan Sen Cross happens on the smaller Time-Frame, is not a bad idea. We
can always re-enter when all Entry Criteria are met.

The ICHIMOKU KINKO HYO System and my 4 Time-Frames Strategy, is ideal for ALL
trending financial instruments and if you delve into its concept you can make nice profits with it.

Trade Management with Sofia’s 4 Time-Frames ICHIMOKU Strategy

Q. If correction on the 4th Time-Frame goes on and on and on….when should we consider
quitting this Set Up and looking for an opposite one?
A. The Scope of the Strategy, is to catch a Young and Strong Move Early. A move is Young
and Strong after a KUMO Breakout. And this happens on the 2nd Time-Frame we
monitor applying the Strategy. If the Correction that starts from the 4th Time-Frame,
ends up to making a KUMO Breakout to the opposite direction on the 2nd Time-Frame,
therefore cancelling the KUMO Breakout we initially saw there, we repeat the process
looking for an Trade Setup to the Opposite Direction.
Q. Once the Correction has started, how do we know if it is a shallow/invalid one we should
ignore, or a proper/valid one we should wait to be completed before we Enter?
 A. The Corrective move has to approach, cross or even exceed at least the 50.0 FIBONACCI
Ratio price level of the most recent Active Wave in order to be considered valid. So when
we see a Price/Tenkan Sen cross happening on 4th Time-Frame, we look for the last
Active Wave’s TOP and BOTTOM and draw the FIBONACCI Ratios from TOP to
BOTTOM using the FIBONACCI Retracement Tool. We mark the 50.0 Ratio and WAIT
for the corrective move to at least approach it. If it doesn’t and the price continues
moving to its previous direction, we ignore the Correction, delete the mark and WAIT till
the price starts a new Correction in order to estimate the last Active Wave again and draw
new FIBONACCI Ratios. Successful Trading is all about patience.
Q. Can we trade the Correction on 4th Time-Frame? How do we trade it?
A. We can trade the Correction from at least 2 Time-Frames Lower than the 4th Time-
Frame. For example if the 4th Time-Frame is H1 TF and we are waiting for an UPward
Correction, we’ll switch to M15 TF and will Enter Long (BUY) as soon as a bullish M15
candlestick closes above Tenkan Sen with Tenkan Sen clearly sloping UPwards. We’ll
place our SL a few pips below the last Down Spike before the UPward move started.
We’ll have used FIBONACCI Retracement Tool on the last Active Wave on H1 TF to
estimate where the 50.0 FIB Ratio level is and we’ll mark it on our Chart. After we enter
Long (BUY) from M15 TF, we’ll place our TP at the ¾ of the pips distance between the
beginning of the correction and 50.0 FIB Ratio price level. We’ll STAY IN while M15
Candlesticks close above Tenkan Sen. We’ll EXIT either when a Bearish M15
Candlestick closes below Tenkan Sen or when our TP is hit, whichever happens first.
Q. If we Enter from 4th Time-Frame, which are the STAY IN Criteria and when do we EXIT?
A. Our Ultimate Goal is to catch the move which has started being “young” and “strong” on
2nd Time-Frame, early. So theoretically, we want to follow the price to its downward
move in case of a Bearish KUMO Breakout or its upward move in case of a Bullish
KUMO Breakout. And that move ends when the opposite KUMO Breakout happens. So
there are two possibilities :
➔ Either the KUMO on the 2nd Time Frame where the Breakout has happened SLOPES
clearly downwards -on a Bearish KUMO Breakout- or upwards -on a Bullish KUMO
Breakout,- which means we are looking at very nice profits following the move and we’ll
jump out JUST BEFORE the opposite KUMO Breakout happens, when Kijun Sen
changes Direction. (after a FALL we will exit when price closes above Tenkan Sen and
Kijun Sen and both lines SLOPE UPwards while after an UPTREND we exit when price
closes below Tenkan Sen and Kijun Sen and both lines SLOPE DOWNwards) Depending
on KUMO’s degree of slope on the Time-Frame we monitor the trade from at any given
moment, an even safer EXIT Strategy is to EXIT when price and Kijun Sen move
towards each other on the smaller Time-Frame from the one we’re in. For pairs with
extremely high volatility like XAUUSD (GOLD), an opposite Price/Tenkan Sen Cross
on the smaller Time-Frame should trigger our EXIT. We can always RE-Enter when
ALL our Entry Criteria are met.
 ➔ Or the KUMO on the 2nd Time Frame where the Breakout has happened does not
SLOPE and we are stopped out from smaller Time-Frame without being able to stay in
the trade gradually switching to higher Time-Frames. This doesn’t mean we can’t make
nice profits, it just means that the trade is short or medium term.
We STAY IN while Kijun Sen goes Down on a Downtrend or Up on an Uptrend. When
Kijun Sen reaches a “turning point”, we switch to the next higher Time-Frame and check
if Kijun Sen and all ICHIMOKU elements there show that price continues to the same
direction. If we see that, we switch to the higher Time-Frame and monitor the trade from
there focusing on Kijun Sen’s direction and trailing our Stop-Loss above/below the
KUMO from there. If we see evidence that perhaps a deep opposite move is coming, we
switch to the smaller TF from the one we’re monitoring the pair from and if we see there
price and Kjun Sen approaching each other we EXIT and WAIT for ALL our Entry
Criteria to be met before we Enter again, this time from the smaller Time-Frame. In case
of Reversal, we re-evaluate Market’s conditions starting again from the highest Time-
Frame and going down looking for a fresh Price/Tenkan Sen Cross.
Q. Which is our Take-Profit Target placement Criterion?
A. With ICHIMOKU 4 Time-Frames Strategy we let the price lead and we follow and that
means by using the KUMO as our SL Trailing Guide and Kijun Sen trending direction as
our STAY IN Criterion, it’s up to us and our Trading Attitude, whether we’ll STAY IN
switching to higher Time-Frame, or EXIT keeping our profits. And of course, there
always is a possibility of having our Stop-Loss hit in case of sudden reversals. But if we
can be as solid as a rock regarding our Trading Attitude, here is how the Strategy gives us
the keys to the treasury-vault. If we want to use Take-Profit Levels of Reference, they
should be estimated from the 1st Time Frame where we have the fresh Price/Tenkan Sen
Cross. In case of a Fresh Bearish Price/Tenkan Sen Cross on the highest Time-Frame,
after we Enter from the 4th one, we can place our First-Level Take-Profit Target a few
pips above Kijun Sen Level because Kijun Sen represents a First-Level of Support, our
Second-Level Take-Profit Target a few pips above KUMO’s Upper Border because
that’s the next Support Level after Kijun Sen, our Third-Level of Take-Profit Target a
few pips above the Lower Border of the KUMO which stands for a Third-Level of
Support and if price wants to keep falling, depending on which our Highest Time-Frame
is, we may switch to the next higher and adjust our Take-Profit Levels. If there is no
higher Time-Frame, then we just follow Kijun Sen as long as it goes down. In case of a
Fresh Bullish Price/Tenkan Sen Cross on the highest Time-Frame, after we Enter from
the 4th one, we can place our First-Level Take-Profit Target a few pips below Kijun Sen
Level because Kijun Sen represents a First-Level of Resistance, our Second-Level Take-
Profit Target a few pips below KUMO’s Lower Border because that’s the next Resistance
Level after Kijun Sen, our Third-Level of Take-Profit Target a few pips below the Upper
Border of the KUMO which stands for a Third-Level of Resistance and if price wants to
keep flying, depending on which our Highest Time-Frame is, we may switch to the next
 higher and adjust our Take-Profit Levels. If there is no higher Time-Frame, then we just
follow Kijun Sen as long as it goes up.
Roberto’s Take-Profit Target placement method. Roberto Parisi, is an Italian
precious friend of mine, and our friendship started since he joined FXholic
Golden Program. He is a man with a golden heart and a very scholastic Trader
who has an obsession with details. Roberto is a big tease and whenever he is in
the Class, we exchange jokes that make everybody laugh and play along turning
each Workshop into a really enjoyable event. Roberto recently shared with us
during a Workshop his simple, yet powerful way to estimate the ideal TP
Placement either on the Time-Frame we’re in or the next higher ones.

He made us observe that when price is falling, it makes sort of “stairs” on its way
down reflecting to a sideways zig-zag action of Chikou Span. When price starts
reversing going UPwards, these Chikou Span Plateaus become Resistance Levels
making excellent TP Placement reference Levels as well. On the other hand,
when price is going up, it also forms “stairs” which reflect to a zig zag sideways
moving Chikou Span in the past. So when price starts falling either due to a
minor correction or a reversal, these Chikou Span “stairs” become Support Levels
and make ideal TP Placement levels too. THANK YOU Roberto :)

Q. How do we Trail our Stop-Loss?

 A. The concept of Stop-Loss Trailing is based on Two Principles that have key-
importance to successful trading :
RISK MANAGEMENT : Because the term “risk management” sounds too
sophisticated, I would say that it is all about avoiding having losses that we can’t afford.
Risk represents the distance between our Entry Level and our Stop-Loss Order. Risk
Management actually exists while Risk is higher than zero. Therefore, our Top Priority is
to Manage Risk so that it can be trailed to the Entry Point without getting hit by Price’s
Fluctuations. That’s critical because it means we must use a “Price Fluctuation
Threshold” which will not exceed our Risk-Taking limits as we Enter and will let Price
“dance” inside its Vital Zone. When Using ICHIMOKU KINKO HYO this “Price
Fluctuation Threshold” is represented by KUMO. Following the Entry Criteria and Rules
means that we enter when the move is YOUNG and STRONG, therefore price just made
a KUMO Breakout either jumping above KUMO (Bullish) or plunging below it
(Bearish). No matter which is the 4th Time-Frame on the pair we’re about to trade, I
suggest we Enter after a KUMO Breakout on M5 Time-Frame. Trailing our SL above the
KUMO in case of a Downtrend or below KUMO in case of an Uptrend will safeguard our
Position till we break even on M5 Time-Frame. Then following Kijun Sen, we may
consider switching to higher Time-Frame and repeat the process. In any case, we are in
absolute control of RISK while at the same time, we let price move freely.
LOCKING PROFITS : We are into FOREX Trading for the money, although
many of us behave as if we’re in it for the glory. The bitter truth is nobody will give us a
trophy for making tons of pips, nobody will applause us and most possibly, even our
closest friends may feel envy biting their hearts if we confess our success. At the end of
the day, FOREX is a truly personal and strictly private thing, at least the way I see it.
Because the rewards we get from it are personal. We earn money growing our Bank
Account. And we do this trading SOLO. If we want to share this money with family,
friends or the world, or even if we decide to bury it at the backyard below dog’s house,
it’s another story. The other extremely valuable reward we get is at the level of Self-
Awareness and Self-Confidence. Again my Self-Confidence is something I can’t share
and is directly related to me. But to materialize both kinds of rewards, we must avoid
what seems to be most Traders’ Plague : “the sand effect”.
 Most Traders see their earned pips slipping like sand through their fingers. No pips
means no money in the bank, no self-confidence...nothing. It’s not how many pips you
make, but how many pips you keep that truly matters. Stop-Loss Trailing following the
KUMO helps us “lock” our profits and although it sounds simple and almost boring, this
is one of the most important -and probably very well kept- secrets of trading.
Q. If the trade is profitable, when and how do we add lots?
A. This Question has two parts : WHEN and HOW. Regarding WHEN, I ‘ll give you the
golden practical rule of Adding Lots in general no matter which System or strategy you
use. Regarding HOW, I’ll explain the best way to do it with ICHIMOKU.
When I was explaining the FXholic Equation, I mentioned the importance of keeping S/E
Ratio stable. S is the Position Size -magnitude and number of lots- while E is the Equity.
This Ratio is universal and you can apply the “fixed S/E Ratio” principle for any size of
account, any currency pair, any position. Actually, if I trade 1Mini Lot per $1000, my
S/E Ratio is 0.1/$1000 . So I’ll add 1 Mini Lot as soon as I grow my Equity up to $2000
and so on. But I know you need a practical guide, something to check every moment
knowing what you should do without the need to go back to your journal making
calculations.
At the bottom of your Chart inside METATRADER, on “TRADE” Tab, you’ll see from
left to right the following Labels :

Balance - Equity - Margin - Free Margin - Margin Level

Balance is a “floating money” figure. Don’t pay attention to it.

 Equity is the real money you have and can withdraw if closing all positions. ALWAYS
pay attention to your Equity and keep building it.
Margin is the premium/guarantee you have to pay to your Broker in order to trade an X
number of Lots from a particular Pair. Margin varies from Pair to Pair and since it is a
sort of Brokers’ “Price List” it also varies from Broker to Broker. Practically, the Broker
tells you “I’ll trust you to trade 1 Mini Lot of XX Pair. All profits you make are yours to
keep minus my spread. All losses are also yours eating up your Margin and even your
Equity and you’ll also have been charged for my spread too.”
Free Margin So if my Equity is $1000 and the cost of 1 Mini Lot of the pair I want to
trade is $50, then subtracting $50 from my $1000, the amount that remains available to
use for more lots is $950 and is called Free Margin.
Margin Level is the Ratio I get if I divide Equity by Margin and multiply by 100. It
reflects the % of my Equity being higher than Margin, and it is another form of
expressing S/E Ratio. In the example above, Equity/Margin = 1000/50=20 Multiplied
by 100, Margin Level is 2000% . That’s our GOLDEN RATIO. We have integrated our
Risk Management policy in it and we’ll also base our Profits Maximizing Policy on it.
How? By adding Lots every time Margin Level goes above 2000% and making sure it
doesn’t fall below 2000%, ever!

HOW do we add lots with ICHIMOKU 4 Time-Frames Strategy? The best point to do it
is when price has finished making a minor corrective move and continues to the direction
of the main trend with increased Momentum. Kijun Sen reflects increased momentum
when it makes new “stairs” upwards or downwards between its plateaus. After a Kiju Sen
plateau, when we see price moving clearly to the direction of the main trend and Tenkan
Sen confirms it with its inclination, we expect Kijun Sen to slope too. And that’s when
we’ll add position.

Sofia’s ICHIMOKU 4 Time-Frames Strategy in action

GBPJPY, 08/09/15
EURGBP, 11/09/15
AUDUSD, 15/09/15
GOLD 18/09/15
USDCAD, 01/10/15
Here is a GUIDE-Checklist for the strategy.
Before Taking the Trade

● Fresh Bearish Price/Tenkan Sen Cross : Daily TF

● KUMO Breakout : H4 TF
● 100% Bearish Picture : H1 TF
● Correction so we can Enter after it : M30 TF
STEP #1 : Looking for a FRESH Price/Tenkan Sen Cross on the highest Time-Frame

Q1 : Is the profile of the pair trending? (KUMO Slope)

Q2 : Is the Price/Tenkan Sen Cross fresh?

Q3 : Is the Price/Tenkan Sen Cross valid?

Q4 : Is there a relatively Fresh Price/Tenkan Sen Cross -to the same direction- on a
smaller Time-Frame which will cut our WAITING TIME shorter?

STEP #2 : Looking for a KUMO Breakout on the next lower Time-Frame, to the
direction of the P/TS Cross

Q1 : Is the KUMO Breakout telling us anything about the strength of the move? (Slope)
Q2 : Is the KUMO Breakout validated by Chikou Span and Kijun Sen or not? (not a
necessary criterion but indicative of move’s strength)

STEP #3 : Looking for 100% picture to the direction of the KUMO Breakout

Q1 : Is the big picture clearly bullish or bearish?

Q2 : Is KUMO sloping?

STEP #4 : WAITING for a correction to start and finish. We Enter after the Correction,
to the direction of the P/TS Cross if price has closed above/below Tenkan Sen with
Tenkan Sen -ideally Kijun Sen too- sloping to the direction of P/TS Cross, and
confirmation from Chikou Span and from leading KUMO morphology.

Q1 : Do we see a Price/Tenkan Sen Cross making a valid correction?

Q2 : Is price moving stronger to the direction of the correction?

Q3 : Which is the highest Time-Frame where price is making a valid correction with
P/TS Cross?

Q4 : On the highest Time-Frame where we had a corrective Price/Tenkan Sen Cross do

we see a candlestick going to the opposite direction signaling the end of correction?

Q5 : Switching down to the 4th Time-Frame are ALL our Entry Criteria met or some
missing?

STEP #5 : We SET our Take-Profit Target based on the Highest Time-Frme - the 1st
one- where we had the Fresh Price/Tenkan Sen Cross.

Bearish Price/Tenkan Sen Cross on Highest Time-Frame

1. 1st Level of Take-Profit Target : a few pips above Kijun Sen on Highest TF
2. 2nd Level of Take-Profit Target : a few pips above Upper Border of KUMO on
Highest TF
3. 3rd Level of Take-Profit Target : a few pips above Lower Border of KUMO on
Highest TF
4. If price makes a Bearish KUMO Breakout and there is a higher Time-Frame than
the one we used as the highest, we adjust our TP Targets to that Time-Frame. If
our Highest TF is Monthly, we follow Kijun Sen’s fall from Monthly TF.
Bullish Price/Tenkan Sen Cross on Highest Time-Frame

1. 1st Level of Take-Profit Target : a few pips below Kijun Sen on Highest TF
2. 2nd Level of Take-Profit Target : a few pips below Lower Border of KUMO on
Highest TF
3. 3rd Level of Take-Profit Target : a few pips below Upper Border of KUMO on
Highest TF
4. If price makes a Bullish KUMO Breakout and there is a higher Time-Frame than
the one we used as the highest, we adjust our TP Targets to that Time-Frame. If
our Highest TF is Monthly, we follow Kijun Sen’s upward move from Monthly
TF.
Below is my Signal on the pair.

USDCAD, 01/10/15 @07:58 GMT

Using my ICHIMOKU 4 Time-Frames Strategy, we now FREEZE on H4 Time-Frame of the
pair and WAIT for a Bearish KUMO Breakout to happen.

If Bearish KUMO Breakout on USDCAD H4 TF doesn’t happen and instead we see a Bullish
KUMO Breakout happening, we cancel the setup and restart evaluating the Market’s conditions
starting from Monthly TF and looking for a BUY Setup.

If Bearish KUMO Breakout on H4 TF happens, we go down to H1 TF where we want to see

100% Bearish picture which means :

1. Price moving below the KUMO

2. Tenkan Sen moving above Price going down

3. Kijun Sen moving above Price and above Tenkan Sen going Down

4. Chikou Span moving below past price action and below past KUMO going Down

5. Bearish KUMO Sloping Downwards.

When we see 100% Bearish picture on H1 Time-Frame, we go down to M30 Time-Frame where
we’ll WAIT for a proper UPward Correction to happen so we can enter Short (SELL) from
M30 TF after the correction finishes, if ALL our SELL Criteria are met.

On the 4th Time-Frame which is M30 TF :

1. We WAIT to see a bullish M30 Candlestick closing above Tenkan Sen, followed by Bullish
Candlesticks.

2. After we are sure that the Correction has started, we draw FIBONACCI Retracement Tool
on the last Downward ACTIVE Wave and we place a mark on our chart for the 50.0 FIB Level.
Then we remove the FIB Tool from our chart. We want the UPward Correction to reach or even
exceed the 50.0 FIB Level in order to consider it adequate. There are cases when corrections
may go only up to the 38.2 FIB Level. That’s OK as long as it has a minor depth instead of just
being a shallow zig-zag. On the other hand, if the UPward correction goes as high as making a
Bullish KUMO Breakout on H4 TF, we consider the setup cancelled.

3. We “follow” the Price/Tenkan Sen Cross from M30 up to H1 or even up to H4 TF if it goes

there. We WAIT for the price to make a Bearish candlestick on the HIGHEST TF where we just
had a Bullish Price/Tenkan Sen Cross. When we see a strong Bearish Candlestick on that TF,
we go down to M30 TF looking to Enter.

4. Before we SELL from M30 Time-Frame, we make sure the following Criteria are ALL met. If
ONE is not met, we STAY OUT and WAIT :

● Bearish Candlestick closing below Tenkan Sen

● Tenkan Sen sloping downwards
● Bearish Candlestick closing below KIJUN Sen
● Tenkan Sen crossing below Kijun Sen
● Kijun Sen sloping DOWNwards
● Chikou Span having crossed below past price action going DOWN
● The Edge of the leading KUMO being Bearish either after a bearish Senkou Span A/B
Cross or being clearly Bearish with Lower Border being sharp pointing downwards and
Upper Border curved/sloping downwards.
● We want to see a fresh strong Bearish KUMO Breakout on M5 Time-Frame, validated
by Chikou Span which must go below past price action and below past KUMO
Once we enter SHORT, we’ll place our SL above the last Kijun Sen Plateau on M30 TF – ideally
we may place our SL above the KUMO- and TRAIL it a few pips above each new Kijun Sen
plateau. Our TP Target can be placed at 1.2816 Price Level. Because USDCAD is a pair with
extreme fluctuations in its idiosyncrasy, we have two options regarding our Trade Management
:

1. We STAY IN as M30 Candlesticks close below Tenkan Sen and EXIT when a bullish
candlestick closes above it…….OR…..

2. We STAY IN as Kijun Sen goes down on M30 TF and EXIT when a Bullish candlestick closes
above BOTH Tenkan Sen and Kijun Sen with BOTH TS and KS sloping UP.

Trade SETUP may not mature before Monday, 5th of October 2015. Be patient.

Happy pips!

Sofia
Chapter 16 : Bollinger Bands
Bollinger Bands is a really amazing Indicator, developed by John Bollinger, a technical Trader in
early 1980s. They consist from a 20 Periods (when you read “periods” think candlesticks) SMA
-Simple Moving Average- and two volatility bands plotted 2 Standard Deviations above and
below it. The 20 SMA makes the Median Bollinger Band, the +2 Standard Deviations Band
makes the Upper and the -2 Standard Deviations Band makes the Lower.

Many traders experiment with variations of the SMA and/or the number of Standard Deviations
that makes the distance of the volatility bands above and below it but I prefer to use the Tool on
its default settings and I believe that -as it is true with almost every Indicator- if you learn it
extremely well, you can become a very wealthy Trader using only this tool and nothing else.

To add Bollinger Bands to your Chart, from inside METATRADER, go to :

INSERT ===> INDICATORS ===> TREND ===> Bollinger Bands

Bollinger Bands by default reflect and measure price’s volatility. Volatility is a word of latin
origin based on the verb “volare =to fly”.
The two Market’s Conditions “stasis” and “extreme moves” follow each other. After an extreme
move when price has shown increased volatility flying away from Market’s Equilibrium Level
represented by the 20 SMA (20 periods Simple Moving Average) which is the Median Bollinger
Band, there comes the time of Market’s relaxation and stasis, when price almost stands still
balancing on the Median Bollinger Band.

Bollinger Bands’ morphology gives strong visual signals to the Traders. There are basically two
phases of Bollinger Bands Morphology :

1. Flat Body : when ALL 3 Bollinger Bands are FLAT (Horizontal) having zero
inclination. Depending on Price’s Relationship with Median Bollinger Band, we can see
two different types of “Flat Body” phase in Bollinger Bands Morphology:
a. Consolidating Flat Body : when price is balancing on the Median Bollinger Band
moving sideways.
b. Ranging Flat Body : when price is moving in a zig-zag mode above and below
Median Bollinger Band within the Range of the Upper and Lower Bands which
are horizontal.
2. Sloping Body : when ALL 3 Bollinger BBands are sloping either UPwards or
DOWNwards.
Consolidating Flat Body where price is balancing on the Median Bollinger Band is NOT worth
Trading. STAY OUT!
Ranging Flat Body where price is moving in a ZIG-ZAG mode ranging between Upper and
Lower Bollinger Bands is worth trading if we see it on Higher Time-Frames, preferably H4 or
higher. We can either trade using the Ranging Market Trading Strategies from that TF or go
Trend-Following using the Trending Market’s Strategies going at least 3 Time-Frames Lower.
Sloping Body Bollinger Bands are Trend-Follower’s “Party Time” but it is important to jump in
the move early. The critical Entry Point is when Median Bollinger Band SLOPES to the same
direction with Upper or Lower Bollinger Band. The 3rd Band follows after making a curve.

Bollinger Bands are primarily a Price Action Container. They are elastic following price’s
increased or decreased volatility but if we observe carefully price’s interaction with them, we’ll
see that whenever price touches or exceeds Upper Bollinger Band, it tends to reverse and starts
FALLING. And whenever price touches or exceeds Lower Bollinger Band, it tends to reverse
and starts going UP.

Although observations are important, they have no practical value unless we can translate them
into Criteria that help us make Trading Decisions.

BUY Criteria :
1. Bullish Reversal Candlestick Pattern on Lower Bollinger Band
2. Lower Bollinger Band being Flat or slightly Curved UPwards.
SELL Criteria :
1. Bearish Reversal Candlestick Pattern on Upper Bollinger Band
2. Upper Bollinger Band being Flat or slightly Curved UPwards.
All Reversal Candlestick Patterns apply here but the one I have found to be the most common
and extremely powerful is the :

● Double Top /Lower Close Bearish Reversal Pattern when two candlesticks have the same
top , the first one is Bullish and the second is Bearish which closes below the middle of
the body of the Bullish candlestick.
● Double Bottom/Higher Close Bullish Reversal Pattern when two candlesticks have the
same bottom , the first one is Bearish and the second is Bullish which closes above the
middle of the body of the Bearish candlestick.
 ➢ The Mom and the Child.

Median Bollinger Band, being a 20 Periods Simple Moving Average, actually represents
Market’s Equilibrium level. Therefore price can’t escape to a statistically significant distance
above or below it without returning back to it. Every time price wants to to either change
direction or continue higher/lower, it needs to get the “blessings” of Median Bollinger Band
making a statistical validation move towards it. This almost looks like a ritual. Only after
interacting with Median Bollinger Band can price continue to the direction of its Main Trend.
On a steep Uptrend, where price makes Higher Highs and Higher Lows, it’s the level of Median
Bollinger Band where almost all Higher Lows occur. This powerful Law of price’s periodical
Statistical Validation to the level of the Median Bollinger Band, which happens to all Time-
Frames, gave me the idea of a metaphor.

Imagine a mother and her child visiting the park. Median Bollinger Band is the “mother” and
Price is the “child”. They play together but most of the time, child wants to explore and move up
and down as mother steadily but from a distance follows and keeps a vigilant eye on her.

Whenever her little girl wants to go play “higher” or “lower” asks her permission.
She can’t stay away from her mother for long without touching her and asking permission.

No matter how strong a move is, whether it is aligned with Market’s true intentions or just the
result of brutal manipulation, statistical validation move to the Median Bollinger Band should
be expected with the certainty of expecting the sunrise.

This interaction of the price with Median Bollinger Band is of huge importance, determining the
direction of the move after it. That’s why Price/Median Bollinger Band knot makes an ideal
Entry-Point when we want to jump in a strong trend. I like to call this trading approach
regarding Trending Markets, the “catch the bus” system.

-Why?
-Because just like when you want to catch a Bus you don’t chase it when it is running,
price/Median Bollinger Band interaction points are the Bus-Stations. Price has stopped running
to one direction, has not gone to the Median Bollinger Band - “bus station”- and once we make
sure to which direction it will head from there, we can position ourselves.

Bollinger Bands separate price-action range in two zones : the one between the Upper Bollinger
Band and the Median and the one between the Median Bollinger Band and the Lower. This way
they help us make our assessment regarding price’s move to the next Median Bollinger Band
from a relatively higher Time-Frame such as DAILY, before we go down to a smaller one
looking for a nice trade set up.
When price has reached the Upper Bollinger Band, as soon as we see reversal Signs and Upper
Bollinger Band getting Flat or Curved Downwards, we expect price to plunge down to the
Median Bollinger Band from there.

Once price has reached the Median Bollinger Band there are TWO Scenaria : it either goes Up to
the Upper Bollinger Band or it falls down to the Lower Bollinger Band.

Candlesticks in conjunction with Bollinger Band’s morphology show us the direction price wants
to move.

Based on this fact alone, I love using an extremely simple but very powerful Trading System
with Bollinger Bands and Stochastics, -an Oscillator we’ll discuss about shortly- on DAILY
Time-Frame with minimum risk and extreme profits.

My Entry Confirmations come from :

★ Candlesticks pattern when price is on one of the three Bollinger Bands. That means,
Double Top/Lower Close Candlestick Pattern on Upper Bollinger Band in case of
Bearish Reversal or Double Bottom/Higher Close on Lower Bollinger Band in case of
Bullish Reversal as well as Swing High above the Median Bollinger Band with a Bearish
Candlestick at least crossing below it in case of Bearish Continuation or Swing Low
 below the Median Bollinger Band with a Bullish Candlestick at least crossing above it in
case of Bullish Continuation.
★ Morphology of Upper, Lower or Median Bollinger Band (flat or curved/sloping to the
direction shown by candlesticks pattern). Especially the Upper/Lower Bollinger Bands
must NOT form a Funnel when I Enter. At least one of the two must be flat or curved.
★ Spike on Top of the last Bullish Candlestick in case of a Bearish Reversal or Spike at the
bottom of the last Bearish Candlestick in case of a Bullish Reversal.
★ Stochastics Crossover to the direction I want to Enter.

My only Exit Criterion is Stochastics Crossover to the opposite direction.

Criteria are the KEY here as with ALL Strategies. If ONE is not met, I stay out and WAIT.

This Trading Strategy is extremely simple and clean. But that’s the reason it requires iron
discipline and patience. It also requires perfect psychology. When we’re stressed, it means that
some of our ugliest insecurities have surfaced up making our life miserable. In that case our
head is so full of noise it’s almost impossible to stay calm and be patient. I call this situation
“tempest in the skull”. In order to apply this Strategy, you must be absolutely confident and
calm determined to check the trade once per day instead of lurking above it, messing up with
your SL every 30 minutes.
By the way, Stop-Loss should be placed a few pips away from the spike of the last candlestick
that was going to the opposite direction. For example if I enter Short (SELL) on the Upper
Bollinger Band, I place my SL above the spike of the last Bullish Candlestick. I use No Stop-
Loss Trailing with this Strategy letting price fluctuate freely in its vital zone between the
Bollinger Bands.

● Trading with Bollinger Bands & Stochastics on DAILY Time-Frame

This Strategy is extremely Simple and very Powerful.
Use it only on DAILY TF to avoid the “noise” that affects Stochastics.
Stochastics give statistically significant Signals whenever the price interacts with one of the three
Bollinger Bands.

It is essential to make sure that the price has stopped going to the previous direction and wants to
reverse. So if we need an EXTRA Confirmation -although the Set of Entry Criteria is complete-
adding ICHIMOKU and looking for a FLAT Kijun Sen is not a bad idea. Once we see the Kijun
Sen FLAT, we can remove ICHIMOKU from our Chart.

We BUY when Stochastics make a Bullish Crossover while price is either on the Lower BBand
or on the Median. We make sure the last Bearish Candlestick has a spike below its bottom. We
place our SL a few pips below the Spike (3-5pips). We STAY IN while Stochastics go UP. We
EXIT when Stochastics make a Bearish Crossover and the price has reached the next BBand.
We check to see if there is a spike on top of the previous Bullish Candlestick. If there is, we may
want to SELL placing our SL a few pips above the spike. We STAY IN while Stochastics go
Down. We EXIT when Stochastics make a Bullish Crossover.

➢ The Limits

Another powerful element of Bollinger Bands is that they form a RANGE within which we
know that price can move. Looking at them we see which are the Upper and Lower Limits of
price action at a given moment. And we get this information in a non-linear graphic
representation. I’m sure there are brilliant chartists who can determine Upper and Lower Limits
by just drawing Trendlines. But I think that Trendlines are more reliable on higher Time-Frames
where price action is almost static due to the big time-intervals involved. A wavy aggressive
move can hardly be defined and followed by Trendlines, at least not from an inexperienced
Trader. Because Bollinger Bands enable us to make estimates about the short, medium and long
term upper/lower limits of price action, I dared to add them to my favorite set of tools because
with ICHIMOKU I don’t get this sense of limits although Kijun Sen and KUMO play that role -
maybe switching to higher Time-Frames-. I feel more secure looking at the Bollinger Bands and
seeing the limits right in front of my eyes. It’s like the white dashed lines drawn on the
Highway.
 ➢ The Bone

Most beginners suffer from the “Market’s Tourist” Syndrome. They jump from one pair to the
other mesmerized by price action and getting almost shocked by extreme moves. Their jaw drops
from a candlestick here , a cross of the price with an Indicator there, a Breakout on a big Time-
Frame, a spike on M5 TF and a thousand more colorful reasons. But observations for the sake of
observations are just waste of precious time.

On the other hand, when looking at the charts searching for answers to specific questions in your
mind, you train your eyes to spot patterns and correlations that repeat themselves over and over
again becoming the perfect Entry or Exit Criteria among your Arsenal of tools.

Looking for Signs that appear repeatedly on turning points, at the early stages or true and valid
reversals, I noticed that Median Bollinger Band was forming a “KNEE” as it was getting curved
towards the new direction of price action.

Then I noticed that Median Bollinger Band is immune to price-action fluctuations above and
below it when it is sloping UP or DOWN. Then I looked at my charts with my eyelids half-
closed getting the Big Picture of the moves and realized that if a Trader enters right after Median
Bollinger Band’s “KNEE” and stays in while Median Bollinger Band is sloping - UP or
DOWN- exiting when it becomes flat, will have tons of profitable trades almost non-stop.

With my eyes half closed watching price action making Bollinger Bands curve UP or DOWN, I
imagined “Popeye the Sailor Man”, the cartoon hero.
And here is the metaphor I shared with my FXHOLICS and soon became part of our code-
language.

If Upper and Lower Bollinger Bands are the “MUSCLES” of price action, Median
Bollinger Band is the “BONE”. So when it comes to Trending Markets and Trend-Following,
save yourself time, money and possible holes in your stomach by just doing this : Follow the
BONE!

Big truths are right under our nose, that’s why we don’t see them unless we step back looking
from a different point of view. Mathematics, when becoming visual, are lots of fun and I can’t
see why we should miss it :)

➢ Swing Highs - Swing Lows : V for Victory :)

It is true that SELLING from the Upper Bollinger Band or BUYING from the Lower Bollinger
Band is great, but there is something ever greater than that.
Median Bollinger Band represents Market’s Equilibrium level and actually when price balances
on the Median Bollinger Band its value is statistically valid and true which means the rate is not
over-valued or under-valued.

When price fluctuates -the correct statistical term is “deviates”- above or below Median
Bollinger Band, it actually moves in non statistically valid zones and therefore it is somehow
“conditioned” to always get back to the Median Bollinger Band either touching it or forming a
LOOP around it before continuing its move to the same direction or before changing direction.

These LOOPS are called Swing-High’s when they are formed above the Median Bollinger Band
and Swing Low’s when they’re formed below it.

On the next Chart, AUDUSD H1 Time-Frame, we see how price has formed a true “chain” of
Swing-High’s above the Median Bollinger Band on its way DOWN. Swing High’s are strong
Bearish Continuation Patterns.
Switching the Chart Format from Candlesticks to Line, we see that Swing High’s are actually
TOPS in the form of reverse V above the Median Bollinger Band.

A Swing High may be formed by :

 1. One candlestick with a long Spike on TOP.
2. Two Candlesticks from which the first one is Bullish having crossed and closed above
Median BBand and the second one is Bearish having closed below Median Bollinger
Band
3. Three or more Candlesticks from which the first one is Bullish having crossed and closed
above Median Bollinger Band, then a group of candlesticks closing above Median
Bollinger Band follows and the last candlestick that completes and validates the pattern,
is a bearish one closing below Median Bollinger Band.

SWING HIGH is a Bearish Continuation pattern. What makes a Swing-High a SELL Signal
even stronger than a Bearish Reversal Candlestick pattern on the Upper Bollinger Band is the
inclination -slope- of the Median Bollinger Band and the high probability that price has
exhausted its Bullish mood by making the Statistical validation move to the Median Bollinger
Band.
One of the reasons I use Bill Williams’s FRACTALS on my Charts is that they give me Strong
VISUAL Signs that the price will not go higher for now, confirming the Swing-High’s above the
Median Bollinger Band in a very helpful VISUAL manner.

Swing Low’s are the EXACT OPPOSITE Patterns from Swing High’s.

They are Bullish Continuation patterns giving BUY Signals. A Swing-Low starts with a Bearish
Candlestick crossing and closing below Median Bollinger Band and ends with a Bullish
Candlestick crossing and closing above Median Bollinger Band.

A Swing Low may be formed by :

4. One candlestick with a long Spike at the BOTTOM.

5. Two Candlesticks from which the first one is Bearish having crossed and closed below
Median Bollinger Band and the second one is Bullish having closed above Median
Bollinger Band
6. Three or more Candlesticks from which the first one is Bearish having crossed and closed
below Median Bollinger Band, then a group of candlesticks closing below Median
Bollinger Band follows and the last candlestick that completes and validates the pattern,
is a bullish one closing above Median Bollinger Band.
Using Fractals, a Bill Williams’ Indicator, pinpointing Swing Highs or Swing Lows becomes
extremely easy. Furthermore, Fractals make an excellent Stop-Loss Trailing Guide, on the
condition, Median Bollinger Band is clearly sloping.
 ➢ The Edges

We so far studied the Signals we get from Bollinger Bands as price action containers and we
have seen how important price-direction indicator the Median Bollinger Band is. But there is
much more about this tool. Let’s pay closer attention to the Upper and Lower Bollinger Bands
and the Signals their EDGES give.

To better study them and keep their images in our mind when in front of our Charts, I’ll describe
them as EDGES correlations with different names :

1. FUNNEL CORRELATION

We always check the Upper and Lower Bollinger Bands EDGES Correlation at the point they
touch the Vertical Line we place on the current candlestick.

-Why is that important?

-Because the Bollinger Bands are elastic and their morphology changes before during and after a
move. So the only statistically reliable “shape” is the one we see NOW!
2. BELL CORRELATION
3. BROKEN FUNNEL CORRELATION
4. BROKEN BELL CORRELATION
5. PARALLEL UP CORRELATION
6. PARALLEL DOWN CORRELATION
7. BROKEN PARALLEL UP CORRELATION - BEARISH RANGE
8. BROKEN PARALLEL DOWN CORRELATION – BULLISH RANGE
9. CONVERGENCE CORRELATION - RANGE BEFORE BOTTLENECK
10. BOTH FLAT CORRELATION - PERFECT RANGE
Chapter 17 : Fractals

Fractals, is a Bill Williams Indicator that comes with METATRADER Software. These little UP
or DOWN arrows hold really special powers and a key-role role in successful trading.

To add Fractals to your Chart from METATRADER go :

1. Insert
2. Indicators
3. Bill Williams
4. Fractals

A Fractal appears in the form of an ARROW on top of a candlestick which is the middle
candlestick of a set of 5, two on the left and two on the right closing below it, or at the bottom of
a candlestick which is the middle candlestick of a set of 5, two on the left and two on the right
closing above it.
An UP Fractal shows a point of Resistance, telling us that price will not go higher for now, while
a DOWN Fractal shows a point of Support, telling us that the price will not go lower for now.

What makes Fractals magical, is their appearance on the turning points after big moves. If read
correctly, they help us position ourselves to the right direction, quite early on very profitable
moves.

I like to combine Fractals with Bollinger Bands because Fractals give extremely powerful
BUY/SELL Signals in conjunction with one of the three Bollinger Bands.
I also like to combine Fractals with another Bill Williams’s Indicator, Alligator.
Fractals combined with Alligator give Super Powerful Signals depending on their position in
regards to Alligator’s Teeth , the Red Line.

An UP Fractal above Alligator’s Teeth = SELL

A DOWN Fractal below Alligator’s Teeth =BUY

Fractals offer a valid confirmation before we ENTER a Trade because they’re actually a
“lagging” indicator. Usually Fractal’s Arrow appears when the 5th Candlestick of the set opens,
not sooner.

Chapter 18 : Stochastics - “Husband & Wife”

DEFINITION OF 'STOCHASTIC OSCILLATOR'

A technical momentum indicator that compares a security's closing price to its price range
over a given time period. The oscillator's sensitivity to market movements can be reduced by
adjusting the time period or by taking a moving average of the result. This indicator is
calculated with the following formula:
%K = 100[(C - L14)/(H14 - L14)]
C = the most recent closing price
L14 = the low of the 14 previous trading sessions
H14 = the highest price traded during the same 14-day period.
%D = 3-period moving average of %K
INVESTOPEDIA

To add Stochastic Oscillator to your Chart from METATRADER, go to

1. Insert
2. Indicators
3. Oscillators
4. Stochastic

Use the default settings.

Stochastic Oscillator is an Indicator comprised of two Lines : the Slow and the Fast. By default Slow
has a red color while fast is green. Because we see two lines, we tend to call the Indicator
“Stochastics” instead of “Stochastic”.
When I first studied Stochastics, I was intrigued by their Greek name which means “those who are
contemplating”. What are these two lines contemplating about? Practically they reflect prevailing
probabilities among a plethora of possible scenaria.

Stochastics actually measure price’s momentum as it correlates to the Market’s “saturation”. They
oscillate between two extreme zones. The upper zone, above 80-level line is the Overbought Zone.
When Stochastics move inside Overbought Zone, it means price made a strong upward move but
downward correction or reversal is coming because Bulls are soon going to lose their strength or get
tired of pushing price UP. The Lower Zone, below 20-level line, is Oversold Zone. When
Stochastics move inside Oversold Zone it means price has fallen quite low but we should expect an
Upward correction or reversal because Bears are losing strength or have got tired of pushing price
Down.

I like to imagine Stochastics as a couple in love, like Carl & Ellie in PIXAR’s Movie “UP”.

Husband Carl, is the fast Stochastic, green line, while wife Ellie is the slow red one.

-Guess who is the boss!

-Ellie of course! Hahahahahaha…!

Slow Stochastic -wife- shows which is price’s true trend at the moment and doesn’t change her
mind easily. Fast Stochastic -husband- on the other hand, being very sensitive to price
fluctuations, tries to convince her that they should change direction.

In most cases Carl’s flirt is not enough to convince Ellie. It takes more private moments for true
results. The Couple gives its Confirmation in two parts : 50% when they cross and another 50%
when they cross below 80-level line or above 20-level line.
Stochastics “speak” to the trader with the following “words” :

● Wait
● Enter
● Stay
● Exit

Although Stochastic Oscillator is an excellent tool, especially when used on higher Time-Frames
where it is immune to “noise” of the Markets, I don’t feel confident enough to use it on its own.

I have noticed that the statistical Significance of its Signals increases when it is combined with
Bollinger Bands. When price makes a bullish reversal on the Lower Bollinger Band for
example, Stochastics confirm it with a Bullish Crossover followed by a cross above 20-level line.
Next it is possible that price will go up to the Median Bollinger Bands and reverse or it may go
all the way Up to the Upper Bollinger Band and reverse from there. The tool that will confirm
price’s intentions and will guide us through is Stochastic Oscillator.
Stochastics also reinforce Signals we get from Fractals as well as ICHIMOKU Elements. For
instance, I ALWAYS try to Enter with Confluence of Stochastics and Tenkan Sen/ Kijun Sen.

Chapter 19 : Alligator
“Bill Williams introduced the Alligator indicator in 1995. The Alligator is as much a
metaphor as it is an indicator. It consists of three lines, overlaid on a pricing chart, that
represent the jaw, the teeth and the lips of the beast, and was created to help the trader
confirm the presence of a trend and its direction. The Alligator indicator can also help
traders designate impulse and corrective wave formations, but the tool works best when
combined with a momentum indicator.

The “traits” of the Alligator are numerous. If the three lines are entwined, then the
Alligator’s mouth is closed and he is said to be sleeping. As he sleeps, he gets hungrier
by the minute, waiting for a breakout from his slumber when he will eat. When the trend
takes shape, the Alligator wakes and starts eating. Once satiated, the Alligator closes his
mouth once again and goes to sleep.

Alligator Formula
 The Alligator indicator is common on Metatrader4 trading software, and the calculation
formula sequence involves these straightforward steps:

1) The Alligator’s Jaw, the “Blue” line, is a 13-period Smoothed Moving Average,
moved into the future by 8 bars;

2) The Alligator’s Teeth, the “Red” line, is an 8-period Smoothed Moving Average,
moved by 5 bars into the future;

3) The Alligator’s Lips, the “Green” line, is a 5-period Smoothed Moving Average,
moved by 3 bars into the future. “

ForexTraders.com

Alligator consists of 3 lines (moving averages) the Green one being Alligator’s Lips, the Red
one being its Teeth and the Blue one its Jaws. Alligator gives Entry Signal when price closes
above/below its Lips on the condition its leading edge is clearly curved Upwards/Downwards.
We stay in a LONG (BUY) Trade as price moves above Alligator and Alligator goes straight up.
We stay in a SHORT (SELL) Trade as price moves below Alligator and Alligator goes straight
down. We Exit a LONG (BUY) Trade when a bearish candlestick closes below Alligator’s Lips.
We Exit a SHORT (SELL) Trade when a bullish candlestick closes above Alligator’s Lips.
When Alligator is FLAT, we take no trade because price is in Consolidation moving sideways.

-Trading with Alligator on Trending Markets

Alligator is a simple and very effective tool to be used in TRENDING Market’s Conditions
ideally on H1, H4 and DAILY Time-Frames.

BUY when a Bullish Candlestick closes above Alligator’s 3 Lines with leading Alligator curved
UPwards. Place your SL a few pips below Alligator’s Teeth (Red Line). STAY IN while
candlesticks close above Alligator’s Lips and Alligator’s body goes UP. EXIT when a Bearish
Candlestick closes below Alligator’s Lips.
When you haven’t caught the move early, WAIT for a Downward Correction with Price closing
below Alligator’s Lips and BUY after a Bullish Candlestick closes above Alligator’s Lips.

SELL when a Bearish Candlestick closes below Alligator’s 3 Lines with leading Alligator
curved DOWNwards. Place your SL a few pips above Alligator’s Teeth (Red Line). STAY IN
while candlesticks close below Alligator’s Lips and Alligator’s body goes DOWN. EXIT when a
Bullish Candlestick closes above Alligator’s Lips.

When you haven’t caught the move early, WAIT for an Upward Correction with Price closing
above Alligator’s Lips and SELL after a Bearish Candlestick closes below Alligator’s Lips.
Chapter 20 : MACD
“Definition of Moving Average Convergence Divergence (MACD)
A trend-following momentum indicator that shows the relationship between two moving
averages of prices. The MACD is calculated by subtracting the 26-day exponential moving
average (EMA) from the 12-day EMA. A nine-day EMA of the MACD, called the "signal
line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals.”
INVESTOPEDIA

Well, I’m not a Mathematician or a Technician, but I like to use Technical Analysis Tools to
help me spot nice Entries and Exits for my Trades and the version of MACD I like most is the
one with the HISTOGRAM and the Signal Line which gives me a visual representation of price
action momentum that makes the whole trading process much easier to me.

MACD is basically comprised from the Zero Line, the Histogram and the Signal Line and it is
being plotted on a separate pane of its own.

Zero Line represents Market’s Equilibrium. Histogram represents Momentum. When Histogram
is above Zero Line, then Momentum is Bullish. When Histogram is below Zero Line, momentum
is Bearish. Each Vertical Line of the Histogram represents the momentum of the price for the
specific candlestick on the Time-Frame we’re looking at.
Signal Line either confirms increasing momentum or Signals turning points when price changes
direction because momentum decreased.

So when Signal Line touches the Bullish Histogram, gives a BUY Signal because this “touch”
means an UP Move is getting strong and starts building up Bullish Momentum. As the Bullish
Momentum increases and the Bullish Histogram starts growing up to a Bullish “Hill”, Signal
Line runs Upwards inside it. When Bullish Momentum starts decreasing -which means that
Bearish Momentum starts increasing- the vertical Lines of the Bullish Histogram start gradually
getting shorter. The moment this change starts, Signal Line POPS OUT of the Bullish Histogram
giving us a SELL Signal which means we EXIT our Long Trade and consider taking a Short one
SELLING.

As Signal Line falls down, this downward move is fresh and young but it may be just a
correction. The moment Signal Line touches the Bearish Histogram and starts running
DOWNwards inside it, we know we have a strong Downward Move. As Bearish Histogram
starts hanging below Zero Line building a Bearish “Hill” below it, the moment Signal Line
POPS OUT of it we EXIT our Short Position and consider BUYING because bearish momentum
started decreasing while Bullish started increasing again.

And that’s how MACD Oscillator reflects Price Action.

There are more ways to evaluate MACD Signals and one of the most popular among traders is
observing the Convergence or Divergence between MACD and Price Action.
Trading with MACD on H1/H4 Time-Frames.

BUY after Signal Line POPS OUT of the Bearish Histogram, placing SL a few pips below the
Down Spike of the last Bearish Candlestick. Be vigilant till Signal Line touches the Bullish
Histogram and Bullish Momentum starts building up. STAY IN while Signal Line is running
UPwards inside the Bullish Histogram. EXIT when Signal Line POPS OUT of the Bullish
Histogram.

SELL after Signal Line POPS OUT of the Bullish Histogram, placing SL a few pips above the
Up Spike of the last Bullish Candlestick. Be vigilant till Signal Line touches the Bearish
Histogram and Bearish Momentum starts building up. STAY IN while Signal Line is running
DOWNwards inside the Bearish Histogram. EXIT when Signal Line POPS OUT of the Bearish
Histogram.

Chapter 21 : PSAR the “prudent”

“The parabolic SAR is a technical indicator that is used by many traders to determine the
direction of an asset's momentum and the point in time when this momentum has a higher-
than-normal probability of switching directions. Sometimes known as the "stop and reversal
system", the parabolic SAR was developed by the famous technician Welles Wilder, creator
of the relative strength index, and it is shown as a series of dots placed either above or below
an asset's price on a chart“
INVESTOPEDIA

It is extremely important for the trader, to catch a move early. For that to happen, move must be
young and strong. And there must be a way that trader knows previous move has Stopped and
Reversed.

What if I tell you that Stop & Reversal Signal in the form of a dot, is what PSAR (Parabolic Stop
& Reversal) Indicator gives us?
PSAR is a valuable tool to the trader but it has one disadvantage, it’s a lagging indicator. So I
designed two Strategies that turn this disadvantage into an advantage. One is using PSAR on 4
Time-Frames with Confirmation from RSI and the other is combining PSAR with RSI which I’m
presenting below. You’ll find the second strategy after RSI’s presentation.

PSAR 4 Time-Frames Strategy

This strategy is ideal for Trending Markets but can also be used effectively on Rangebound ones.

1. You want to see a 1st PSAR DOT to the highest Time-Frame. ( Up to 3 Fresh DOTS are
considered valid)
2. You want to see at least TRIPLE Number of DOTS to the same direction on the next
smaller Time-Frame.
3. You want to see at least TRIPLE Number of DOTS to the same direction on next smaller
Time-Frame.
4. On the 4th Time-Frame you FREEZE and WAIT for a Correction with as many opposite
PSAR DOTS as possible. After the Correction on 4th Time-Frame is over, Enter when
you see RSI crossing 50-level line confirming PSAR’s 1st DOT. Place your SL a few
pips below 1st DOT if you BUY or a few pips above 1st DOT if you SELL and trail it
following PSAR’s DOTS and keeping the pips distance fixed. EXIT when RSI crosses
50-level line to the opposite direction. If the price doesn’t reverse and you see it
continuing to the Correction’s direction, switch to the next smaller Time-Frame, WAIT to
 see a line of PSAR DOTS to the opposite direction of the one you want to join and Enter
from there after the 1st PSAR DOT to the direction you want to follow is confirmed by
RSI crossover with 50-level line.

The story of the Narcissus

“In Greek mythology, Narcissus (/nɑrˈsɪsəs/; Greek: Νάρκισσος, Narkissos) was a Hunter from
Thespiae in Boeotia who was known for his beauty. He was the son of the river god Cephissus and
nymph Liriope.[1] He was proud, in that he disdained those who loved him. Nemesis noticed this
behavior and attracted Narcissus to a pool, where he saw his own reflection in the water and fell in
love with it, not realizing it was merely an image. Unable to leave the beauty of his reflection,
Narcissus drowned. Narcissus is the origin of the term narcissism, a fixation with oneself and one's
physical appearance.”
WIKIPEDIA
 Narcissistic Personality Disorder is characterized by a long-standing pattern of grandiosity
(either in fantasy or actual behavior), an overwhelming need for admiration, and usually a
complete lack of empathy toward others. People with this disorder often believe they are of
primary importance in everybody’s life or to anyone they meet. While this pattern of behavior
may be appropriate for a king in 16th Century England, it is generally considered
inappropriate for most ordinary people today.

People with narcissistic personality disorder often display snobbish, disdainful, or

patronizing attitudes.

PsychCentral.com

-Have you ever met a narcissist?

-I’m sure you have. They probably are the most exciting people to meet and be around with. A
narcissist is so enchanting that you’re willing to be blindfolded to his/her extremely self-centered
attitude. Because of the fact that most narcissists fully backup their self-adoration, being top
achievers and perfectionists, it is hard for someone caught in the web of their charm to resist the
attraction. When such a brilliant person expresses their best intentions and give their outworldly
promises full of stardust, it feels like they’ve hacked your heart’s most well guarded secrets
before they possess it for good. The only side-effect to that, is that narcissists remain true only
to themselves and eventually -in most cases- they’ll only tell you what you want to hear in
order to stroke their ego and move on.

-Why am I talking about narcissists?

-Mainly because of my need to vent out part of my unpleasant personal experiences and because
if Technical Indicators were characters, RSI would be a narcissist.

Chapter 22 : RSI the “narcissist”

“DEFINITION of 'Relative Strength Index - RSI'

A technical momentum indicator that compares the magnitude of recent gains to recent
losses in an attempt to determine overbought and oversold conditions of an asset. It is
calculated using the following formula:
RSI = 100 - 100/(1 + RS*)
*Where RS = Average of x days' up closes / Average of x days' down closes.”
INVESTOPEDIA
Basically, RSI, the narcissist, is moving within a 0-100 range where its gorgeous line-body being
inside its own separate pane below price, reflects oversold Market when it’s moving below 30-
level line and overbought Market when it moves above 70-level line. RSI, the narcissist, indeed
gives BUY Signals when it makes upward angles below 50-level line and SELL Signals when it
makes downward angles above 50-level line, but because these angles don’t always have a
reliable degree of statistical significance, -they may reflect corrective moves- we better consider
valid BUY Signals the Bullish crossovers of RSI with 50-level line and valid SELL Signals the
Bearish crossovers of RSI and 50-level line. Remember, a narcissist’s intentions or promises are
just that...intentions and promises. Unless you see real actions -50 level line crossovers- don’t
bite the bait.

PSAR on the other hand is a “prudent princess” :)

Everytime RSI and PSAR meet, RSI will do his best to conquer PSAR’s heart, but she will give
her FIRST DOT of trust and closeness only after RSI has made a Crossover above/below 50-
level line.
When RSI and PSAR go UP but RSI has not crossed above 50-level line yet, this is possibly a
Correction, or the early stage of the Bullish Reversal so either trade it from smaller Time-Frame
or WAIT.

The exact same happens when RSI and PSAR go DOWN but RSI has not crossed below 50-level
line yet. This is possibly a Correction or the early stage of a Bearish Reversal so you should
either trade it from smaller Time-Frame where ALL Criteria are met, or WAIT.

The Narcissist and the Prudent Fresh-3 Strategy

We are looking for the highest Time-Frame where PSAR confirms a trend opposite that
Monthly’s. Then we want to see the same PSAR picture to the 2 lower Time-Frames. When all 3
Time-Frames show a FRESH New Trend to the opposite direction of Monthly, we WAIT for a
correction on the 3rd Time-Frame and we Enter from there when RSI makes a crossover with 50-
level line confirmed by PSAR’s 1st DOT.

Start from the highest Time-Frame (Monthly TF) and looking at PSAR determine the Trend. If
the Trend is the same on next smaller Time-Frame, go to even smaller. Slowly go down
gradually switching to the next smaller Time-Frame.

When you find a Time-Frame where the Trend is the opposite than Monthly TF, this is going to
be the 1st of the Fresh-3 Time-Frames. On the next smaller Time-Frame, you want to see the
same Trend. If it’s not there yet, WAIT. If it is, check this 2nd TF and switch to the next smaller,
which will be the 3rd TF of the strategy.

Here you WAIT patiently till you see a valid correction which means the first PSAR DOT to the
opposite direction. WAIT for the correction to finish and ENTER when you see an RSI/50-level
line crossover confirmed by the first PSAR DOT.

Place your SL a few pips below/above the first PSAR DOT and trail it keeping the same pips-
distance below each new PSAR DOT. EXIT when RSI crosses 50-level line to the opposite
direction.

Chapter 23 : Fibonacci Retracement Tool

DEFINITION of 'Fibonacci Retracement'

A term used in technical analysis that refers to areas of support (price stops going lower)
or resistance (price stops going higher). The Fibonacci retracement is the potential
retracement of a financial asset's original move in price. Fibonacci retracements use
horizontal lines to indicate areas of support or resistance at the key Fibonacci levels
before it continues in the original direction. These levels are created by drawing a
trendline between two extreme points and then dividing the vertical distance by the key
Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%.
 INVESTOPEDIA
I’m presenting a great Trading System using Fibonacci Retracement Tool and RSI on one of my
“KISS FOREX” Books.

The points I’d like to highlight here regarding Fibonacci Retracement tool are the following :

1. When the Market is trending, in most of the cases, Corrections happen primarily on 50.0
FIB Ratio, secondarily on 61.8 FIB Ratio and less often on 75.0 FIB Less often means
that the move may not finish as a Correction and continue as a Reversal breaking 100.0
FIB Level.
2. Fibonacci Retracement Tool gives excellent Signals combined with Trend-lines in case
you prefer clean Charts and Trendlines and in most cases it helps you place your Take-
Profit targets after Breakouts with its Extensions.
3. If you are trading from relatively higher Time-Frames using Trend Lines, FIB Ratios
combined with Candlesticks, optionally with PSAR or an oscillator such as RSI, MACD
or Stochastics, give you excellent confirmations as part of a confluence of Signals that
help you a lot with your Trading Decisions.

Using ICHIMOKU KINKO HYO, Fibonacci Retracement Tool comes handy, when waiting for
the correction on the 4th Time-Frame of my 4 Time-Frames Strategy, because it shows us that a
decent correction should reach at least 50.0 Fibonacci Level.

Applying Fibonacci again and again looking for the expected Correction level, my FXHOLICS
and I, noticed that Kijun Sen (ICHIMOKU Blue Line) was flat ALWAYS at that exact level. So
now we also had a visual representation of the middle level of a wave.

On my Strategy which uses Bollinger Bands and Stochastics on Daily Time-Frame, I use Kijun
Sen being FLAT as a confirmation Criterion that the previous move has stopped.

But FXHOLIC Roberto Parisi, took the study of ICHIMOKU in conjunction with Fibonacci
Ratios, even further, making incredible discoveries that give us privileged information about
Market’s intentions.
Because Kijun Sen turns FLAT before the move gets frozen and that means we may have 40, 70
or even 100+ pips candlesticks or spikes to that direction especially on higher Time-Frames such
as H4 or Daily, by applying Fibonacci Ratios on the last active Wave, superimposing 50.0 Level
on Kijun Sen Plateau, we can have a precise estimate of the END-POINT of the move, so we can
make our trading decisions and place our Stop-Loss as soon as Entry Criteria are met.

Chapter 24 : ADX
“DEFINITION of 'Average Directional Index - ADX'
An indicator used in technical analysis as an objective value for the strength of trend.
ADX is non-directional so it will quantify a trend's strength regardless of whether it is up
or down. ADX is usually plotted in a chart window along with two lines known as the
DMI (Directional Movement Indicators). ADX is derived from the relationship of the
DMI lines.”
INVESTOPEDIA
I find ADX a great tool to use on its own trading from H1, H4 or Daily Time-Frames mainly
looking for ADX “knees” which ALWAYS signal reversals.

PART 3 : The Driver (Your Trading Attitude)

Chapter 25 : Your Philosophy

“Where there’s a will there’s a way.”

Popular Saying

When it comes to taking action you have to pick your road. Is it going to be full of excuses or
full of results?

If you are determined to reach your goal taking action is the most essential part. But regarding
FOREX Trading I have noticed that there is one factor that makes a big qualitative and
eventually quantitative difference in terms of results and it’s not your Trading Style :)

Till recently I thought that there indeed exist different Trading Styles and actually I even
classified them into three categories : trend-following , swing trading and scalping. And yes, if
we’re talking about Trading Styles, these are the distinct Styles a trader may follow depending
on their trading skills level. Trend Following is the Style any beginner should adopt and stick
with till they feel confident enough to try Swing Trading actually a Market’s Surfing Style where
you follow price action on its Ups and Downs without any particular biases about it, doing it in
the course of a few days. As for Scalping, well it’s the sophisticated term for being a Market’s
Acrobat going for a handful of pips no matter which is the direction of price action, usually from
M15, M5 or even M1 Time-Frames.

But I believe that this approach of Trading Styles is totally wrong. The key-factor that makes the
big qualitative and quantitative difference is your core Philosophy in Life. You either are aware
of who you are and where you’re going, focus and have a plan to follow strictly the essential
few, shutting down all the noise that is not related to it, or you are trying to be everything to
everyone, constantly run and try harder and harder only to realize that your wheels are spinning
up in the air because you’ve stretched yourself thin, lost in the trivial many that drain away your
energy and leave you stressed and nervous.

My conclusion is that it’s not about Trading Style, it’s about Trading Attitude.

You can either be a Cool Trader, a Nervous Trader or a Market’s Tourist. It doesn’t depend on
your level of trading experience, as much as it depends on your core Life Philosophy.

In Life -and in Trading- there are extremely few things that really matter. Lost in the ocean of
trivial many, most of us tend to miss them, leading lives that struggle to adjust to others’
expectations and demands from us. We live our lives by default instead of living them by design.
Following our Life Philosophy’s pattern during our trading, we trade by default instead of
trading by design. We Enter instinctively, Exit instinctively and rely heavily on Ms Yellen’s or
Mr Draghi’s next statement. We’re afraid of doing anything different than what the vast majority
of traders do. But the vast majority of traders -up to a 95%- are losing money in the Markets.

Trading by Design means I am the BOSS of my trades. It means I FOCUS on the extremely few
essential elements that truly matter.

Here is a joke that illustrates the destructive results of losing Focus of the essential.

As Dave's company had achieved its best ever results, it was decided that the annual
conference would be held in Hawaii.
Soon after landing, Dave was sipping a margarita in the sunshine by the pool
overlooking the Pacific.
He then joined the rest of his colleagues at an introductory briefing.
"We've arrived in paradise on an all expenses paid jolly, so why Dave, do you look like
death warmed up?" asked Dave's colleague Simon.
 "Just as I was about to text my wife, I heard the call to attend the briefing, so I quickly
finished typing my text but didn't spell check it," replied Dave as he passed over his
phone to Simon, which read:
We've landed in paradise and are enjoying cocktails by the pool. Wish you were her.

In the joke, Dave lost his focus while he was texting his wife, probably the most important
person in his life, for the sake of a trivial distraction, a call related to the silly gathering for an
equally silly introductory briefing. Yes, it was great having achieved what they did and being
where they were but they could as well keep living their lives as happily without the briefing or
even without the Hawaii Conference. On the other hand, probably Dave’s life wouldn’t be as
happy as it used to be after having hurt his wife unintentionally and after having to explain in a
convincing manner what really happened. He would probably explain the typing error but how
would he ever be able to explain his false prioritization?

What I keep whispering to myself is :

❖ Be the BOSS of your trades ...ALWAYS
❖ FOCUS on one Pair. You don’t need more than one pair to make millions with FOREX.
❖ FOCUS on a strategy that will help you catch a move early when it’s “young and strong”.
❖ Be PATIENT and COOL till the trade matures. It’s at the beginning of a new strong
move that most fluctuation happens. Make sure you Enter with Confluence of multiple
criteria met and trust your Technical Analysis Tools.
❖ Let Market lead and you follow. Avoid predictions, prophecies, rumors, opinions, advice,
crystal ball readings and assumptions. Keep your mind immune to biases. Keep your
mind open to true Market’s intentions. Respect the Market.
❖ When you look at price action, think of PEOPLE behind it. ALWAYS expect a
Correction. People who pushed the price to one direction didn’t do it for the glory, they
did it for the profits. So when price hits extremes, get ready for an opposite move because
PEOPLE want to take their profits.
❖ Grow your positions and your equity with TURTLE’S Steps, unless you can do it even
slowlier.

Think of Warren Buffett, who has famously said, “Our investment philosophy borders on
lethargy.” What he means is that he and his firm make relatively few investments and
keep them for a long time. In The Tao of Warren Buffett, Mary Buffett and David Clark
explain: “Warren decided early in his career it would be impossible for him to make
hundreds of right investment decisions, so he decided that he would invest only in the
businesses that he was absolutely sure of, and then bet heavily on them. He owes 90% of
his wealth to just ten investments. Sometimes what you don’t do is just as important as
what you do.” In short, he makes big bets on the essential few investment opportunities
and says no to the many merely good ones.
 Greg Mckeown : “Essentialism”

I come from Greece and I believe that we all carry a piece of Greece inside us.

-Why?

Because probably one of Greece's biggest contributions to the world is philosophy. Philosophy
is a complex word made from "philos" which means "friend" and "sophia" which means wisdom.
Actually "philosophy" stands for "love for wisdom".

Philosophizing means freedom of thinking and constant pursuit of truth. But if you look at
philosophizing as an impractical, theoretical approach to life, you got it all wrongly.

Truth is like a diamond. It has as many facets as the angles from which light shines on it.

Philosophizing has the purpose of seeking YOUR truth shedding light to the facets that are of
essence to you and that means it's your guidance system towards spotting the best little choices
that make up your everyday course in Life.

Your philosophy filters the options you are DAILY presented with and the keyword here is
...DAILY.

Filtering your options and making choices is what pushes you UP to Success or DOWN to
Misery. Your Philosophy is your personal system of beliefs. It either makes you or breaks you.
If your Philosophy is in line with the instant gratification "trend" of our society, then you believe
in lottery-riches, you use microwaves to make your eggs faster than 5 minutes, you love instant
photos, instant coffee, instant relationships through instant messaging and always look for "push-
button" solutions to every imaginable issue.

You have the "million-philosophy".

You want millions and you want them NOW!

To you, wealthy people were either born with a silver spoon in their mouth, got extremely lucky
or hold super-natural powers in the forms of skills or talents. You believe in events instead of
processes. You see the magnificent oak-tree and ignore the fact it came from an acorn through a
process that took years.

But everything in Life is about cycles and processes.

If you have the "penny-philosophy" you know that it takes nine months of pregnancy for a baby
to come to life. You know that between sowing and reaping stands cultivation period and that
sun will set before rising again in 24 hours. You know you have to WAIT for the cycles of
events to be completed and the processes to lead to desirable results.
You know that it's the penny multiplied consistently that leads to true wealth and that you can go
from ground floor up to the twelfth story climbing one stair at a time, not flying like Super-Man.
Real Life's Super-Men and Super-Women reach the top step by step and they keep going till they
get there!

Success in Life and in everything you do -FOREX Trading included- lies in the process of small
incremental steps you make consistently every day...every day...every day…

Call them baby-steps, call them turtle-steps....They've got to be steady, easy and small and
they've got to be ON A DAILY BASIS!

If you have the million-philosophy you

believe that all you need to succeed is capital
because it will push you ahead of the lucky
ones who inherited wealth and will allow you
to compete with the intelligent ones by hiring
experts to show you the way.

That's what the Slot-Machines and the

Roulettes fans believe too. Feeding the Slot-Machine with coins seems insignificant compared
to the magnified expectations of a cash-shower. Blind to the sacrifice of his hard earned pennies,
the player lives for the excitement of a vague possibility. Instant money...no effort..no
progress....no process....pure luck!

This is the TRAP of GAMBLING. And most of us are guilty of gambling in every aspect of our
Lives. I told him I love him last summer....do I have to keep saying it every day? I paid the
monthly subscription to the Gym....do I have to go there more than three times per month? I had
a salad yesterday....having a hamburger now won't make any big difference.

Doing little things right every day means making small positive choices on a consistent basis.
These small choices are as easy and as insignificant as a penny is or as a pip in the FOREX
Markets. One penny up, one penny down doesn't make any difference at all. But this is totally
wrong!
You know already that one penny can turn into $10Million after 31 doublings. 31 Doublings
may not correspond to 31 days. They may correspond to 31 years but in all cases, when the
factor called TIME kicks in, the results can be dramatic.
As tiny little pennies are being wasted to the wrong direction over time, you end up old and
broke. The tiny insignificant wrong choices you were making every day regarding your health,
your self improvement and your relationships brought you 30-40 or even 50 years later into
being a total wreck.

On the other hand, if instead of gambling your hard earned money -your family's blood money-
without a Trading Plan, you start by respecting each of your pennies as if they were drops of
your blood -which they are- and push yourself to enter into a DAILY Routine of little disciplines
going for a few pips in FOREX and a few pips in every aspect of your life, TIME factor will
eventually kick in rewarding you with meteoric success and the Life of your Dreams.

All this just because you were going for a few pips per day with your trades, a few sweet words
and little actions per day with your relationships, a few right choices about your health per day, a
few pages of a self improvement book per day for your spiritual growth. And that's the true
essence of MIRACLES.

You can't WAIT! You want results and you want them at the blow of your fingers. An invisible
pistolero has put a gun to your head pushing you to be fast with your thoughts, with your
choices, with your life, so in most cases you first act and then ....think. And usually you
REGRET!

This pistolero is responsible for drawing your attention away from the idea of making 5pips per
day starting with a MICRO Account. This sounds so ridiculous you don't even want to think
about it. You and the 95% of Traders who end up losing ALL THEIR MONEY in less than 6
months. While Scrooge McDuck goes for those little 5pips per day and every night he's enjoying
one of his famous golden coins baths!

I truly believe that FOREX Trading helps us reach our full potential as persons, because it puts
into testing our core life-philosophy. If you have been misled to endorse the millions-
philosophy, I invite you to drop it right now and pick the penny-philosophy instead. If you do it,
soon will come the day you’ll be so successful in all aspects of your life and so happy, you’ll
forget to thank me :)

Recently, Maria, my ex husband’s youngest daughter got married to Christos, the love of her life.

I was 23 when I met my ex husband and Maria was 6 years old. Typically I was her second
mother -I don’t like the term “step mother” at all- but our relationship was that of sisters :)
I wanted to accompany my wedding gift to my precious Maria and her Christos, with a valuable
message which took me a lifetime to learn, so here is what I wrote on the gift-note :

“Maria and Christos,

happiness is the road you’ll walk hand in hand, not the destination.
Love is the acceptance of other person’s freedom of choice regarding what gives them joy.

Love and Joy!

Sofia ”

And then I realized that the same rules apply in FOREX. So re-writing the message for my
FXHOLICS, it would look like this :

“My FXHOLICS,

Success is the road you’ll walk consistently applying the System of making a handful of Pips
DAILY, not the destination.
Profit-Making is about the acceptance of Market’s freedom of choice regarding price action
direction.

Happy pips!

Sofia ”

And I suddenly realized that the same factors that make us fail in our relationships, also make us
fail with our FOREX Trading.

In our Relationships, we tend to love our significant other, the way WE want, not THEIR way.
We don’t get in their shoes, we don’t really acknowledge and respect their freedom of choice and
their right to be happy with or without us. We behave as little miserable insecure tyrants.
Without being aware of it, we lose all our true inner magnificence shine and to the eyes of our
loved one, we gradually turn into annoying buzzing flies.

In our Trading, we like the Markets ONLY when they behave the way WE expect. We place our
silly personal biases -either as they’re planted in our heads by media or by our limited perception
of reality- above everything else. We behave as “know it all” world class experts while we truly
act like little miserable insecure “world class idiots”. Without being aware of it, we turn into
blinded gamblers. We can’t WAIT to enter, so we jump in prematurely. We then get scared from
price’s fluctuations, we start jumping from higher time-frames to smaller ones like grasshoppers
and thinking we are smart, we tighten our Stop-Loss breaking all SL placement rules. When it’s
hit we instantly decide to jump in to the opposite direction disregarding all the opposite signs we
get from the candlesticks and the Indicators. We literally take the stupidity of messing up to a
new level. As our inflated EGO goes wild, we have absolutely no thought about respecting the
Market and letting it show us the way. Why? Because we know better. And because we should
take action fast instead of sitting there doing nothing. Who says so? Our “knowing it all” smart
EGO. Usually this is the kind of attitude that justifies the saying : “you can make a small
fortune in FOREX, if you start with a big one”.

Maybe what I described above doesn’t happen to any of you and I really wish so. That
possibility places me at the unpleasant position of having been -and occasionally repeating it - a
“world class idiot”. Well, if it makes any difference at all, I must say I’m truly ashamed of that
and struggle to get rid of my rotten EGO.

According to the Famous Pareto Principle, 20% of our efforts give us 80% of our results. I built
the whole FXHOLIC System around the core pursuit of those actions that correspond to the 20%
of Successful Traders’ efforts aiming to grow results exponentially. And these actions are what
I’m presenting next. Setting goals is nice but as Scott Adams puts it in his book “How to fail at
almost everything and still win big”, building Systems is even better, because till you reach a
goal you are at a “failure” mode and if you don’t reach it the sense of “failure” may hold you
from trying again, while if you reach it, unless you set a new higher goal, you may remain static
at best or fall back to square #1. When you have a System in place, you already have succeeded.
The System works for you every time you apply it. Achieving results anytime you want is a
matter of applying the System. The System is a set of predetermined and easy to repeat actions.
It’s simple but extremely difficult to shut down the noise, the distraction and all kinds of excuses
and just follow these actions. How do I know? I’ve been there :)

Chapter 26 : Duct-Tape, Lucky Charms and other superstitions

If A is success in life, then A equals X plus Y plus Z. Work is X; Y is play; and Z is keeping your
mouth shut.
Albert Einstein, Observer, Jan. 15, 1950

Keep your FOREX Trading Plan and achievements to yourself. Not only while you’re launching
your efforts embarking in the process, but as long as you’re actively in it. If you want to share
something, go ahead and share your profits. Share them with people you love, with people you
care for with people you want to help. Money is pure energy. It has value only when it circulates,
not when it sits still in a vault, beneath a mattress, or in a jar for years. Money matters when it
has a positive impact on people’s lives. Share the money, the fruits of your project, not the
TREE.

Keeping your FOREX Project a secret is not just a superstitious whim, it’s a security measure.
Protecting your Life-Changing Project from negative energy is a wise thing to do.

We all have the instincts of jealousy planted in our psyche as part of our survival mechanism.
When we recognize superiority signs to another person we feel threatened because
subconsciously we translate this into a decrease of our possibilities to survive. We want to negate
this threat either by eliminating it or by surpassing it.
From that point on there are two distinctively different action patterns we can follow.

One is originated by a cerebrum gland called amygdala and we have absolutely zero control over
it. It’s a circuit that bypasses conscious thinking and is also responsible for horrible crimes done
under the state of amok, crimes that happened while conscious mind was numb therefore they
were not registered in memory. This action pattern pushes us to put obstacles to the achiever, to
sabotage the achievements we feel threatened from. We have to pull the achiever down at least to
our own level of mediocrity. We will say and do anything to discourage her/him and convince
them to cancel their whole set of actions. We won’t rest unless they stop doing what makes them
superior to us.

Alternatively, the second pattern of reaction is in effect when we diffuse the first jealousy
reaction’s waves to our prefrontal lobes seeking ways of taking similar actions. We are in
competitive mode. This definitely is a healthier reaction than the blind sabotaging one, but it
takes a truly adamant character to manifest it. I don’t know about you but the adamant characters
I have met in my whole life aren’t more than three.

Now you realize why even your close family members may unknowingly turn against you
making your already challenging FOREX venture even more challenging if not impossible.

Don’t talk about your trades, your plans, your strategies, your profits, your losses. Don’t talk
about your FOREX Project to your colleagues, to your neighbors, to your friends, to your
siblings, to your parents. Don’t talk even to your spouse although there are some rare exceptions
here that confirm the silence rule. Don’t talk …Don’t talk… Don’t talk...
Many years ago I had watched a Chinese movie where the hero had to keep a very big secret
which was so overwhelming that was almost drowning him so when he felt the risk of sharing it
almost inevitable, he started running in the streets of the city, then out of it in the country,
through meadows and farms till finally he reached the woods up the hill. Then he found an old
oak tree with a huge hollow on its trunk. He took a deep breath and he confessed the Big Secret
in the tree’s hollow and left it there.

So if you need to talk about your FOREX Project go to the woods and seek for a tree’s hollow or
go to the beach and talk to the sea’s waves. Both ways work fine. Trust me.

I don’t believe in luck or coincidences. I believe in preparation, hard work and persistence. I
believe in the 10000 hours to world-class expertise status as Malcolm Gladwell describes it in his
amazing Book “Outliers : The Story of Success”. That’s what I believe in.

But if you ask me if there is a spiritual dimension to our Trading I will definitely agree. I
wouldn’t mind calling “luck” my higher self, the God’s power in me, my gratitude for all my
blessings, my positive energy resources, my optimism, my creative passion, my self confidence,
my eagerness to get out of my shell and leave a lasting love- impact to the world.

YES! This is PURE LUCK! This kind of luck comes from inside and floods the world around
us. If you don’t believe in abundance, in doing good and sharing beautiful emotions with people,
you’ll never have the chance to experience any of these in your reality. Abundance and wealth
are like a golden river of energy that flows through us. It’s mainly about our awareness of giving
and gratefully accepting.
Ancient Greeks had given
Luck the grace of a Goddess.

According to Hesiod’s
“Theogonia”, Goddess Luck
was Ocean’s and Tythea’s
daughter reflecting the fact
that sea-trade brings wealth
and great happiness to people.
Her statues usually show her
holding Amalthea’s horn, the
symbol of abundance and
baby-wealth or a scepter
because she was considered to
be a benevolent daemon who
was mediating between men
and Gods.

Even the Ancient Greek

Goddess of Luck represents
values you should have inside
you before seeking pleasant
surprises in your outer reality.

Chapter 27 : Loser’s ENEMY - Winner’s SECRET

“I don’t know what FOREX is but I know people talking about it in here are rich”.
INSTAGRAM User

It’s fascinating talking about others’ millions and billions but it has zero value to you unless you
model them. Yes, that’s right. Copy them. Step on their footprints. They probably are not
smarter or sexier than you. As far as I know, Warren Buffet’s, Bill Gates’ or Madonna’s day
has 24 hours, exactly as many as my day and your day has. I’m also sure they’re not little jelly
green creatures with weird antennas and three eyes on their forehead. What makes them part of a
tiny elite, is their different mindset and the speed of implementation when it comes to their
counterintuitive “out of the box” ideas. Furthermore, what makes them who they are is their
readiness to say NO to anything that is non essential and doesn’t serve their main purpose.

FOREX Trading is one of the many vehicles to success. It is not the tool or the way to success.
You will map the way to success using your mind as the tool. That means the journey must start
from within and you must be willing to make it.

Another trait that makes successful people who they are is their relationship with risk. They take
risks, -usually pre calculated risks - at a much higher frequency than most. Do they fear? Of
course they do, but they take the risks anyway. They don’t swim in a sea of excuses. They
actively pursue results.

Billionaires are determined to see themselves as extraordinary and everything they do is a

physical extension of their extraordinary self-image. They don’t care about other people’s
opinions when it comes to their WANTS and their SELF-IMAGE.

The bestselling author Terry Pratchett said, "The trouble with having an open mind, is that
people will insist on coming along and trying to put things in it."

Research by psychologist Dr. Travis Bradberry, shows that the greatest entrepreneurs, artists and
leaders have a closed mind when it comes to their work. No matter what people say about them
or their work, they are like a postage stamp and stick to it until they get there.

They don't let criticism and rejection devalue what they do. They realize that their value doesn't
decrease simply because of someone's inability to see what they're worth.

They’re not afraid of failure. Because they know that failure breeds success. It’s not how good
you are in avoiding to fall. It’s how fast you get up after a fall. Because WE ALL FALL. Fall is
not failure. Not getting up after the fall is.

With extremely rare exceptions, most billionaires were not born billionaires. And as Dan
Kennedy observes, common factor to the extra wealthy people’s route to success has been
bankruptcy. Another common factor is these people’s advanced ability to implement systems
with built in exponential growth parameters.

Chapter 28 : The Masochist Nervous Trader

After sharing all these ideas with you, I should probably have omitted painting the Nervous
Trader’s Profile, but doing that seems almost an emergency to me because I know that no matter
how many warnings I give you or how many efforts about re-programming your thinking I may
make, you’ll still go out there and break all the rules for the first few months. Don’t be surprised
or disappointed if it takes you 6 months to turn your $1000 into $2000.

It’s alright to be a Nervous Trader as you’re starting out but your ultimate goal should be to turn
into a Cool Trader. Some of the Trade Setups presented in this Series of Books will be a good fit
for Nervous Traders. It takes time and persistence to gradually transform your Trading attitude.

So how could I describe Nervous Trader? This kind of Trader has not broken loose from social
conditioning “chains”. Has not unlearned the toxic way of thinking that keeps her/him enslaved
to what others expect or think of her/him. The Nervous Trader is always in a hurry, always
overstressed , always has to prove to others that is busy working hard, earning their approval. To
the Nervous Trader it’s all about looking busy, looking a hard-worker, looking successful in the
eyes of others.

Usually a beginner is a Nervous Trader.

Scientists conducted an experiment in order to study the “dependent reflexes” on fleas, which
are insects with as tiny brains as a pin’s
head.

They put many fleas in a glass jar which they closed with a lid. As fleas were jumping inside the
jar, the sound of their heads tapping on the lid could be heard for a while. But shortly this sound
stopped. What happened? Fleas adjusted the height of their jump so they could avoid hitting their
heads against the lid. Next, scientists decided to remove the lid.

Can you guess what happened?

No flea jumped out of the jar. They all kept jumping at

the recently adjusted height as if the lid was still there.

This behavioral model stands true for us humans and

partly is described as the “social conditioning” effect upon
us.

If the anonymous and vague beast called “Society” wants

us to believe that great wealth is unattainable and
furthermore whenever we see it, it’s usually linked to “evil
money”, then it is more than certain that the majority of us will keep jumping up to the
theoretical level of the limitation-lid which never was there.

It takes the inner “leverage” of beliefs, attitude and courage to jump out of the jar harnessing the
power of the outer “leverage” offered as an infinite combination of opportunities. This way you
position yourself in the minority of systematic winners.

But if you are a Nervous Trader, you need security more than success. That’s why you place
more importance to the jar’s lid than to its total absence. And even if the lid had never been
there, you’d have invented it.

Nervous Trader doesn’t believe to himself much. That’s why he prefers to be a member of a
Group with many no matter if they all are ignorants or desperate. Group gives him a sense of
security. He doesn’t want a freedom overdose. He can’t handle it. And he doesn’t understand
how is it possible to turn $1000 into $1Million even if you show him the sequence of doublings
one hundred times.

He believes in the linear correlation of effort, time invested and results.

The Nervous Trader hasn’t replaced his false belief that the day has only as many working hours
and no matter how hard you work, there will always be a ceiling for the money you can make.
His subconscious mind can’t start working towards the realization of his dreams because his
conscious mind has failed to rationalize the scenario of making tenths of thousands of dollars
within a few hours of trading per day having a lot of free time in the day to think, play, relax and
enjoy life.

Nervous Trader feels guilty at the idea of not working physically hard somewhere, somehow,
probably for somebody else. This type of work is what he has modelled from his parents for
many years. It can’t be eradicated just like that.
For the majority of Nervous Traders, the first doubling of their $1000 Account will be so hard,
they may even exceed their tolerance limits and quit.

Actually, most nervous traders have subconsciously adopted the self-defeating pattern of a
victim and they repeatedly manifest a behavior that is based on selective blindness.

On one hand, they see what THEY want to see in the Market, they love to predict, to foresee and
to build up rigid sets of prophecies based on their personal biases. They don’t let the Market lead
because they don’t like waiting. They draw their sense of importance and achievement only
when they take action at their “pace”, not Market’s.
On the other hand, when they’re deep into losses, it’s everybody else’s fault but theirs. They’re
the victims of FEDERAL RESERVE BANK’s policy, of Currencies War, of their Broker’s
tricky software, of their traders-friends bad advice. They need to attract others’ sympathy and use
it as a justification for their poor choices’ catastrophic effects being selectively blind to the fact
that they lack proper education. They prefer to fool others and themselves acting as real fighters
who fight an unfair battle, while they refuse to open their eyes and see that they are starring in
their own masquerade in a fighter’s costume, using water-pistols.

Their Ego comes first. So if their Ego says they must enter a trade although a correction is in
progress, they’d rather take action, even if it proves to be a fatal move for their account, than
stay out and wait doing nothing. And after the loss, they’re ready to pamper their Ego with a
multitude of excuses.

Nervous Traders are extremely susceptible to the “EUPHORIA SYNDROME” as well. They are
not familiar with Technical Analysis enough to enter early in a Big Move, so they jump in almost
at the end of the Breakout just a bit before the move is exhausted and the reversal starts.

“Sciolism is worse than ignorance”

Ancient Greek saying

In most cases the Nervous Trader “knows it all” and “knows it better”. And that’s a major fallacy
that makes the backbone of his life-philosophy as well. If he’s lucky to empty his cup from
mixed up and conflicting misunderstood pieces of information, making space for true
knowledge, he has a chance in succeeding in life and trading. Otherwise he’ll remain a lost soul
and one more number on the endless list of trade losers.

The Nervous Trader fails to realize that Trading is a Solo Sport with no audience and no co-
athletes. Pretending you know something you hardly understand, when applied to FOREX
Trading, gives a new dimension to suicidal behavior.

-What makes you a Nervous Trader?

-Your choice to struggle to be someone else but YOU. Discovering yourself is a long journey
and takes a lot of dedication and persistence. Becoming a successful FOREX Trader,
presupposes that you have discovered YOURSELF. I didn’t say “improved yourself” because we
come to life in perfect form. Discovering your magnificent self, means you’ll have to break free
from the social matrix that wants you to “improve” in order to align with what the System wants
and expects from you.
 The saying "you should never buy
hair grower from a bald salesman"
reminds me of the magic bullets,
quick fixes and secret formulas that
are peddled by so many self-
appointed success gurus.

As someone once said, "The big

problem with self-help is that
there's usually too much help and
not enough self."
Research by Dr. Andrew Meltzoff,
Professor of Developmental
Psychology at The University of Washington, concludes that we humans are not born
with a clean slate. In fact, quite the opposite, we're born with all we need to live a happy
and fulfilled life. The problem Meltzoff says is that our innate tendency for self-discovery
is suppressed by society's mantra of self-improvement.
He argues that we are human beings and not human becomings, and that our focus
should be on self-discovery and not self-improvement.
In his book "The Scientist in the Crib", Meltzoff concludes that we should forget what
we've been taught, so we can remember what we already know and are born with.
Meltzoff's prescription for self-discovery, creativity and optimal living is to get back into
the spirit of the sandpit of our childhood, smell the crayons and do things which capture
our imagination and ignite our spirit.
As the French poet Charles Baudelaire said, "Genius is nothing more than childhood
recaptured at will."
..... now where are those crayons.
from Sunil Bali’s Newsletter
-Where should you start from while
discovering yourself as a person and as
a trader?
-Start from the humble stage of crawling
towards truth, then slowly standing up,
then walking and at the end running.
This is not an event that happens at the
snap of your fingers. It’s a long process
of transformation. Finally, the
caterpillar turns into a butterfly.

The butterfly potential has always been

in your genes, you just have to go
through the sequence of changes that lead to its realization. It is not easy and it is not fast. Easy
and fast is the plague of our high-tech era. We can’t wait for an egg to boil for a few minutes.
We have to use the microwaves to do this faster. Life is not a clickable link. We think that it’s
all about the end-result and we want it now, while the essence of things lies in the process. The
process of becoming your Butterfly version can’t be fast and easy.

Chapter 29 : The Noise

Successful people are a tiny elite. What makes them stand out from the crowds is their way of
thinking which leads to a totally different life-attitude.

Just like entropy is the force of nature that constantly tries to decompose things and bring them
in a random chaotic state of degraded energy level, NOISE is everyone and everything that fights
for your attention distracting you from what you should be doing and delaying you from getting
to your destination….most of the times also derailing you and pushing you to sink into a null
inertia forgetting even your name.

NOISE is everywhere. It’s so omnipotent, it actually reflects death’s will to pull you into non-
existence. You have to put systematic effort to resist it. You have to fight for your dreams with
all your strength. Staying focused to your plan means shutting down the NOISE.

Quantum Physics famous “double slit” experiment and Mathematics that go with it have proven
that OBSERVATION turns electrons from an omnipresent field of potentiality creating
interference wavy pattern, into individual matter particles. In other words, our focused attention
filters out countless possibilities materializing ONLY the ones we want. Our attention turns
energy into matter. Thought is a high form of energy. Focusing our attention to thoughts that
serve our purposes, we make them materialize. NOISE fights for our attention. NOISE is the
enemy.

NOISE comes from within in the form of little voices of temptation urging you to go out, do
something silly,do anything except what you are supposed to be doing, working for your
success..

NOISE also comes from people around you. It’s a strange phenomenon but even people who are
very close to you and truly love you, play major saboteurs’ roles regarding your choices to
exceed your limits and succeed. In fact, there is an explanation to this which may shock you.
One of our survival instincts is competition. The superior prevails. But there are two sides to the
superiority coin. One is putting the effort to become superior and the other is keeping the others
from becoming superior. It is pretty obvious that the vast majority of people will rather cut your
wings before you spread them wide open than work on strengthening their own wings.

The kind of NOISE these people create, poisons your mind with toxic negative thoughts. That’s
why I call them “Negators”. If you share with a “Negator” your dream of becoming a successful
FOREX Trader, you’ll instantly get bombarded with ironic comments and epic failure stories of
his/her own or people they know. They’ll step on your dreams and start jumping up and down till
they smash every little hope of yours to proceed with them. They’ll push all your sensitive
buttons stating that you should be in touch with reality, stick with your job, be wiser with your
paycheck money management than seeking alternative sources of income and in general you
should be as close to ordinary and average as any mediocre person can be. I know I’m repeating
myself, because I warned you about all this noise already with my “Duct-Tape” Chapter. But it
doesn’t hurt repeating the warning :)

The NOISE has the face of a pistolero who points a gun to your head.

The Pistolero pushes you to Enter a Trade prematurely. He urges you to ignore your Entry
Criteria, especially if only one is missing. He forces you to mess up with your trade when
Market is almost sleeping making you feel useless and a total idiot because of doing nothing.

Pistolero’s mission is to convince you that price’s fluctuation -especially to the opposite
direction of your position, is something you should act upon, trailing your SL with it even if you
see a reversal taking place which may kill your account. Pistolero makes you FREEZE till your
SL is hit or trail it ad infinitum instead of jumping out cutting your losses short in case of
sudden reversal.
Pistolero makes you place your SL to a breath’s distance from price action when it moves to
your favor, stopping you out from great trades.

Pistolero bullies you into jumping from Time-Frame to Time-Frame like a grasshopper, turning
you into the perfect “cat into tiger” effect’s victim, because what seems a minor fluctuation move
on H4 Time-Frame (cat) looks like a wild reversal on M5 (tiger) scaring the hell out of you and
making you react with stupid unnecessary actions that threaten your account. Pistolero makes
you open more positions on multiple pairs, increasing your risk exposure and eliminating your
control over your trades, when your existing open position is sinking deeper into losses. Pistolero
wants your permission to shoot you. Pistolero makes you act when you should WAIT doing
nothing and makes you freeze while you should JUMP OUT.

Shut down the NOISE. Kill the Pistolero. Be calm and patient staying totally focused to your
objectives. Being patient and cool is the only way to succeed in FOREX Trading.
Chapter 30 : Market’s Tourist

The Cool Trader doesn’t behave like a Market’s Tourist wandering around. Tourists visit and
see taking pictures of new places, spectacles and sceneries. They don’t focus on anything, they
just let the new impressions flood their brains. There is no reasoning for anything because there
is no other purpose than sightseeing.

Strangely, the vast majority of traders act like Market’s Tourists. I had been a Market’s Tourist
myself when I was a beginner, and believe me, this is a very expensive hobby. I wouldn’t refer
to this because I feel embarrassed to recall it, but the extremely high frequency of my Signals
Subscribers’ questions inside the WhatsApp Group
or via email, made me realize that most of them
suffer from Market’s Tourist Syndrome.

Looking at our Charts at any given moment no

matter what’s the Time-Frame, we actually get
bombarded by thousands of pieces of information.
Being passive observers of Market’s fireworks is not
just pointless, it’s a tremendous waste of time
because Market’s dynamics and our tendency to
observe the motions almost mesmerized, leads to a
distorted sense of time. This useless sightseeing may
go on

Looking at our Charts at any given moment no

matter what’s the Time-Frame, we actually get
bombarded by thousands of pieces of information.
Being passive observers of Market’s fireworks is not
just pointless, it’s a tremendous waste of time
because Market’s dynamics and our tendency to
observe the motions almost mesmerized, leads to a
distorted sense of time. This useless sightseeing may
go on
for hours, days, weeks without noticing its corrosive
effect on our psychology, let alone the negative
impact on our trading routine.

Observing price action and Signals given by Indicators sparingly here and there for the mere
sake of noticing them, is a self-destructive behavioral pattern for any trader.
The Cool Trader looks at the Charts seeking specific pieces of information related strictly to
Criteria and Rules.

Cool Trader zooms in the one piece of information that matters because it is in direct correlation
to his strategy and blurs everything else.

Chapter 31 : Roller Skates & Munehisa Homma

It’s crazy how much and how often we trick ourselves into believing that once we possess a tool
we also possess the end-results of its use. That’s why we buy books and 80% of us don’t even
reach the middle of their content. But we feel confident that now we own the book with the
solutions...therefore somehow we almost “own” the solutions too. We sign-up for an annual plan
to the gym and in a couple of weeks we start finding excuses about not going. But we feel great
about getting in shape because we already took the big step of paying for an annual membership
to the gym. So getting slimmer and perfectly toned is just a matter of time. Not going to the
gym is a tiny detail. We buy a treadmill and we end-up using it as a clothes rack. But we own
the treadmill so practically we feel like we “own” the results of walking on it daily. The fact that
we may even neglect to undust it every week is a detail. We tend to add magical properties to
the tools while it’s only us and our consistent effort using them that can truly bring the end
results. Without consistent use and effort, tools just occupy space.

This stands true for all kinds of tools including Software. And when it comes to FOREX
Trading, there are two huge bubbles I want to burst here because they get many new traders
confused.

● Bubble #1 : you can’t trade

successfully without using a
SOFTWARE.
Brain is the most
sophisticated and powerful
computer in the world and it
 comes in the form of a semi-liquid substance with unlimited capabilities. Munehisa
Homma, the “father” of Candlesticks, made his $10 Billions+ in Japan back in 1750 not
even having direct access to the Market’s data other than the chain of 100 people he hired
to pass him information from Osaka where Market was, 600 miles away, to Sakata, his
hometown. In short, you can be one of the top traders in the world without using any
Auto-Trading Robot.

● Bubble #2 : all you need is a Live Account and the SOFTWARE to make money.
Most Auto-Trading pieces of SOFTWARE are excellent but of no use if you don’t know
how they work in order to maximize their effectiveness and by that I don’t mean a
mechanical set of rules, I mean the principles their algorithms are based on. Which brings
us back to the point that you need to have proper Education on Technical Analysis. And
if you do have it, the use of an Auto-Trading SOFTWARE becomes optional.

Recently I received a message via LINKEDIN by an employee of a Trading Firm asking me if

I’m using SOFTWARE - ALGOTRADING - and how I determine funds allocation. When I
replied that I’m not using SOFTWARE, he got back to me saying that “Trading without
SOFTWARE is like participating in DAYTONA Rallycross with Roller Skates”.

His comment brought Munehisha Homma in my mind, who made his billions back in 1740
without internet connection, trading platforms or sophisticated SOFTWARE other than the most
powerful SOFTWARE in the world...his brain.

I believe that ALGOTRADING is not a bad option, on the condition you know its mechanics
and you have mastered the principles its functions are based upon.

An algorithm is a specific set of clearly defined instructions aimed to carry out a task or
process.
Algorithmic trading (automated trading, black-box trading, or simply algo-trading) is the
process of using computers programmed to follow a defined set of instructions for placing a
trade in order to generate profits at a speed and frequency that is impossible for a human
trader. The defined sets of rules are based on timing, price, quantity or any mathematical
model. Apart from profit opportunities for the trader, algo-trading makes markets more
liquid and makes trading more systematic by ruling out emotional human impacts on trading
activities.
Suppose a trader follows these simple trade criteria:
● Buy 50 shares of a stock when its 50-day moving average goes above the 200-day
moving average
● Sell shares of the stock when its 50-day moving average goes below the 200-day
moving average
Using this set of two simple instructions, it is easy to write a computer program which will
automatically monitor the stock price (and the moving average indicators) and place the buy
and sell orders when the defined conditions are met. The trader no longer needs to keep a
watch for live prices and graphs, or put in the orders manually. The algorithmic trading
system automatically does it for him, by correctly identifying the trading opportunity. (For
more on moving averages, see: Simple Moving Averages Make Trends Stand Out.)
Algo-trading provides the following benefits:
● Trades executed at the best possible prices
● Instant and accurate trade order placement (thereby high chances of execution at
desired levels)
● Trades timed correctly and instantly, to avoid significant price changes
● Reduced transaction costs (see the implementation shortfall example below)
● Simultaneous automated checks on multiple market conditions
● Reduced risk of manual errors in placing the trades
● Backtest the algorithm, based on available historical and real time data
● Reduced possibility of mistakes by human traders based on emotional and
psychological factors
The greatest portion of present day algo-trading is high frequency trading (HFT), which
attempts to capitalize on placing a large number of orders at very fast speeds across multiple
markets and multiple decision parameters, based on pre-programmed instructions. (For
more on high frequency trading, see: Strategies and Secrets of High Frequency Trading
(HFT) Firms)
Algo-trading is used in many forms of trading and investment activities, including:
● Mid to long term investors or buy side firms (pension funds, mutual funds, insurance
companies) who purchase in stocks in large quantities but do not want to influence
stocks prices with discrete, large-volume investments.
● Short term traders and sell side participants (market makers, speculators, and
arbitrageurs) benefit from automated trade execution; in addition, algo-trading aids
in creating sufficient liquidity for sellers in the market.
● Systematic traders (trend followers, pairs traders, hedge funds, etc.) find it much
more efficient to program their trading rules and let the program trade
automatically.
Algorithmic trading provides a more systematic approach to active trading than methods
based on a human trader's intuition or instinct.

Basics of Algorithmic Trading: Concepts and Examples | INVESTOPEDIA

Chapter 32 : One Pair ONLY!
During my early beginnings in trading FOREX and for quite a bit of time, I had the idea that
trading many pairs simultaneously was a smart way to diversify risk maximizing profitability
potential.

Multibillionaire Investor Warren Buffett famously said that "diversification is protection

against ignorance. It makes little sense if you know what you are doing."

Now I know he was absolutely right. My tendency to trade more than one pairs simultaneously,
was an impulsive reaction triggered by my fear of the unknown, because I was shooting in the
dark, having no actual knowledge of the Market and what I was supposed to be doing, let alone
why I should be doing it. That was a “gambler’s” attitude. I had been lucky with a couple of
trades and those random successes had led me think that this was a right thing to do, till this
“right thing” caused a chain reaction of epic losses killing my Account more times than I want to
remember.

When you know what you’re doing, you also know that you need no more than ONE PAIR to
make as much money as you want in FOREX. Staying focused on ONE PAIR you’re in control
of your Trade. If you want to maximize your profits, depending on your S/E Ratio or your
Account’s Margin Level, you may add positions, or you may choose to trade it to both directions
from a relatively high Time-Frame such as Daily or H4 or go scalping from M5/M15 Time-
Frames following the price action to its UPS and DOWNS taking advantage of the “Accordion
Effect”.

If you don’t want to stick to one pair and follow it forever, you can switch to as many as you
want, on the condition you trade ONLY ONE PAIR at a time.

Chapter 33 : Grasshopper’s Syndrome

Oups! You did it again!
➢ You entered prematurely before ALL Entry Criteria were met.
➢ You were not patient enough to WAIT for the H4 Candlestick to close -H4 being the
Time Frame where you monitor the trade from - and you jumped out with losses because
of an opposite move on M15 TF.
➢ You suddenly decided to jump in a totally different pair without any proper study or plan
and without WAITING for any specific Criteria. You just saw a strong move and
thought you should join.
 ➢ But right after you joined, you notice that the second pair moves against your position
and you instantly decide -well , instantly means 70 red pips later- that you should exit
that trade and go back to the first pair.
➢ But because you had already losses, you now want to get your REVENGE on the Market
so you open a double Size Position.
➢ Without giving your brain any time to evaluate the move which is a minor correction that
hasn’t been completed yet, you again are NOT patient enough to WAIT for it to end and
you certainly don’t want to stay there doing NOTHING for the next 2, 3, 4 or maybe 5
candlesticks of H4 Time-Frame. Instead of checking after 4hours and WAIT as much as
it takes for the price to resume its Main Trend going to the direction of your position, you
jump in the other pair opening twice the initial Size and 30 minutes later, because you’re
an Action -Person and not some lazy bone, you decide to do something about this mess -
being the smart trader you are- and you close all four positions with multiple losses, but
that’s part of the trade and you just cut your losses short, RIGHT?

-WRONG! You are a GRASSHOPPER and a filthy one.

The sooner you realize and accept it, the sooner you’ll STOP IT ! If you don’t, FOREX will
destroy you financially, socially and personally, in which case I doubt you’ll ever find the inner
strength to bring yourself back on your feet again.

The “Grasshopper’s Syndrome” as I like to call it, is the lethal combination of a New Trader’s
lack of knowledge, “knows it all” arrogance, gambling frenzy, insecurities about life, lack of
plan, lack of self control and sometimes also lack of self belief. Each one of these flaws can be
totally destructive, but their sum is a death sentence. Please don’t do this to yourself. Give
yourself a chance to learn FOREX Trading the right way. Be humble about your ignorance. Be
patient with your learning curve. Time is key in making progress. Time is also key in successful
trading. Jumping in and out of trades blindly at the speed and frequency of a grasshopper is
suicidal. STOP IT NOW!
Chapter 34 : Patient as a Rock!
Entering the Market’s battlefield have no illusion that you are any more powerful than a little
minnow swimming in an ocean full of sharks. That means you need an ally, which has to be an
invincible one giving you the “edge” that will allow you to not just stay alive but also prosper.
The only and the most powerful ally you can have is TIME.

Well, when I say that you should be “patient as a rock” I don’t mean just as a rock, I rather mean
to be “patient as a mountain”. Because you may see rocks moving or rolling but seeing a
mountain moving is highly unlikely … :)

Physicists on their way to study subatomic particles and going from atom to electrons and
quarks, were finally shocked to discover that the more they were dividing those particles hoping
to find matter, they found EMPTY SPACE, absolute NOTHINGNESS!

Mastering the art of WAITING and doing NOTHING is essential to the Trader who wants to
profit from price action which has a lot of similarities to electrons’ way of moving.

We are socially conditioned to believe that we must constantly do something in order to prove
we’re people of value as “nothingness” is associated with laziness.
But this is totally wrong when it comes to trading, because we have set the prerequisites to join a
very complicated and elaborated process which we must let evolve without being able to
influence it. That means, our actions have zero effect on the Market, therefore by taking action
instead of WAITING it is highly possible we’ll harm our account.

Before taking a trade, we have to WAIT for ALL our Entry Criteria to be filled.
Except two distinct moments, ENTRY and EXIT and possibly a few moments of trailing Stop-
Loss, we do nothing else but WAITING.

At the beginning of entering a trade we WAIT for it to mature. This is key because depending
on the Time-Frame we’re entering from, it may take from hours up to days for a strong move to
explode to the direction we expect it to go. I’m describing the mechanics of this “delay” on the
“Turning Point” paragraph in “MARKET’S CONDITIONS & PHYSIOLOGY” Chapter which
follows.
It is every trader’s ultimate goal to catch a move early while it is young and strong. But that
means a previous strong move must be stopped and negated and that is an extremely difficult and
time-consuming process.

And since I mentioned the term “time consuming”, let me ask you this.

-What do Candlesticks you see on your Charts represent?

-Time...you’ll answer. And that’s correct.
-But whose time?
-The answer is YOUR TIME. These Candlesticks are YOURS! Instead of watching them
formed staying glued to your monitor and feeling the irresistible urge to DO SOMETHING -
which most of the times results in messing up with your trade- go away and live your life. LIVE
YOUR CANDLESTICKS because Life is for Living. When you have to WAIT Patiently, do that
LIVING YOUR LIFE, not watching the candlesticks as if you’d be watching your Life’s
Hourglass.
There is nothing you can do other than watching the candlesticks or living your Life. Make
sure you pick the second option.

There is no way we can push the Market to go as fast as we want it to go.

Sometimes I receive pressing emails or text messages from my APP’s Users urging me to give
fresh Signals while the pairs are almost “sleeping” being in a consolidating mode moving
sideways or making corrections while my previous Signals’ Entries may have not been triggered
yet. Or my previous Signals’ Trade Setups may have just taken off.

I really feel bad afterwards but can’t hold myself replying that “Signals are not cookies I make in
my kitchen and that I can’t make the Market move faster”. And although it sounds a bit rude,
it’s the plain truth. I wish I could make my Users understand its importance.

And then, there is another paradox I would like to draw your attention to, which also requires a
lot of patience and self-discipline.
The paradox is, that after having waited for all the Entry Criteria to be met, you take a very
promising trade and while you’re in, price is moving sideways for endless hours while it seems
like most other pairs have gone wild giving hundreds of pips.

Be patient and WAIT for your trade’s conditions to mature, you’ll be handsomely rewarded
when your pair will explode and other pairs will fall asleep.

Chapter 35 : The Cool Trader and Monolithic Trading

It’s true that Sharks are moving the Market, not us minnows. And to give you the bigger picture,
think about two Groups of Sharks, -as I already mentioned when presenting the Turning Point
Pattern,- sometimes cooperating, sometimes being on opposite sides : GROUP A Sharks being
the Institutional Traders mainly representing BANKS and GROUP B Sharks being the
Independent FUNDS.

Since you don’t belong to any of these two Groups, you have no other option to survive and
thrive than being a MONOLITHIC TRADER standing out and far away from the crowd of
heavily manipulated and misled small traders that make the perfect prey for Sharks.

That means you have to rely on Technical Analysis tools and your logical thinking in order to
make your Trading decisions, while millions of small traders will be spoon-fed by the
Mainstream Financial MEDIA -owned by the Sharks- with the misleading info Sharks want them
to consume.

I know you may be tempted to pay attention to the MEDIA mainly because of their authority
status.

But, wait a minute!

What does authority mean? In this case, authority stands for the unquestioned credibility of
someone who is in power...specifically, money power.

But how much credibility would you assign to someone who owns trillions and at the same time
not only stands icy indifferent to the world’s poverty and misery -which is capable of eradicating
within months- but furthermore enhances it in ways for which the term “crimes against
humanity” is an understatement ?

Unless you live on a deserted island for the last few decades, you may have witnessed Banks’
role. So I will not dig any deeper here.

I just hope that you got my point why you should NEVER trust the information Banks want to
stuff your head with via their authority MEDIA. A safe way to understand where Markets are
really heading, is to assume that Markets want to move to the exact opposite direction from
where Bubble Currencies want to go.

To understand which are the Bubble Currencies, seek the living standards of people in
Currencies’ countries. If you find out that unemployment rates soar, homeless people increase,
people on food stamps increase, people committing suicide increase and multiple sources of
misery keep people sinking in a chaotic state of despair, then you’re looking at a country with a
Bubble Currency. Either stay away from it or get prepared to position yourself Short, Selling it.

FOREX Trading truly is a solo sport by default, but you must take it one step further being
monolithic in the way you interpret the Market and that means you must think for
yourself.
PART 4 : Driving Conditions (Market’s Conditions and
Strategies)

Chapter 36 : Market’s Conditions and Physiology

So what is a MARKET?

Market is the field where DEMAND meets SUPPLY.

Capital Market is the field where BUY Orders are being matched by SELL Orders.

For each BUY Order has to be an Equal SELL Order on the exact same financial instrument -
pair- for a transaction to go through. If there isn’t an equal and opposite matching order, there is
no Trade.

When you are a small Trader moving one Standard Lot here and one Standard Lot there, you’re
just another minnow in the ocean of the Marketplace while the big sharks placing orders for
thousands of Standard Lots, are the ones that make the Market move.

What do we mean when we say “the Markets” ?

Till a few years ago, I admit that I was blind to what “Markets” really are.
I thought governments and Central Banks were setting their long-term monetary policies and true
macro-economics were in play causing adjustments or corrections when necessary.

I thought that what we call “fundamentals” really existed and played a key-role to the dynamics
of the rates because they reflected valid figures related to unemployment, GDP, exports and
more, in the form of periodical reports, news releases and announcements through major
financial media.

Till I had the strangest nightmare ever, waking up to the conclusion that it was a reality-glimpse
behind a thoroughly elaborated facade.

In my sleep I saw people so evil that the way they carried their human bodies and faces looked
weird. They controlled TRILLIONS. Right. TRILLIONS. Money inherited or made mainly via
the most profitable business in the world ...WAR.

Of course they held their shares in major banks of the world, drugs, gaming and sex industries as
well but their core business was WAR. Governments were their puppets. Corrupted politicians
were willing to name the black white as long as their price-tags were justified.

And then, they used their Banks for the money-laundry process. Till they realized that their
Banks could become War-Machines causing a catastrophic domino-effect to any economies
they’d choose to enslave.

These humanoids’ worst enemy was boredom. Money in their hands was not a prosperity tool,
was a lethal weapon. They had exhausted the whole gamut of pleasures related to sex, they had
re-invented pedofilia and all kinds of perversion, but their hedone-sensors had become numb to
what once used to excite them.

Poisoning food with genetically mutant products distributed through their multinational
corporations, or playing with earth’s climate giving it the sophisticated name of “climatic
engineering” was no fun anymore.

Neither funding terrorists to sweep off whole villages in Africa or to “de-populate” selective
areas of countries that have no way to defend their rights was as much of a spectacle as it used to
be.

Now they needed to scale up the game.

So they would siphon up world’s liquidity endangering its own existence.

Waking up from that nightmare, the bitter realization that what I saw in my sleep was only the
surface of the daunting reality, forced me to connect the dots and view the whole picture.

Unfortunately, we live in a big LIE. These monstrous humanoids, have made a massive turn to
what seems to be a perpetual source of pleasure for them, the Capital Markets. Capital Markets
used to be a closed CLUB for the few and privileged before the Internet era’s dawn.

As Internet exploded, they decided that it wouldn’t be a bad idea to create their WEB in a high-
tech environment. Owning BANKS, corrupted Governments, Credit Rating Companies and
major Media, all they needed was “fresh blood”.

If Markets can be compared to an ocean, these humanoid monsters are the equivalent of the
sharks. Funds and speculators, large, medium sized and small sized are making the rest of the
“marine population”. Small traders -that’s us- are the little minnows swimming in this hostile
environment.

Sharks’ most burning problem is Liquidity. In order to fill their huge BUY orders, they’ll need a
huge volume of SELL orders to match them with. If everyone and their dog is positioned Long in
an extremely Bullish Environment, Sharks have a Big Issue. They can get their BUY Orders
filled by matching SELL Orders in two ways. Either by convincing the vast majority of traders -
the minnows- to open Short Positions, therefore placing SELL Orders, or they can cause a “lethal
spike” on a relatively small Time-Frame such as M5/M15 , hitting a massive number of Stop-
Loss Orders and SL Order on a Long Position is a SELL Order. The two ways are usually
combined and intertwined. In most cases, sharks may initiate the Spike, and then minnows after
having frozen watching their SL hit, they open Short Positions (SELL Orders) offering more of
their blood to the Sharks.

Fundamentals and the power of information - How the sharks mislead the minnows
After a thorough investigation, a rich gangster finds out that his bookkeeper has
cheated him out of $10 million. His bookkeeper is deaf. That was the reason he
got the job in the first place. It was assumed that a deaf bookkeeper would not
hear anything that he might have to testify about in court.
When the mobster goes to confront the bookkeeper about his missing $10 million,
he brings along his attorney, who knows sign language. The Godfather tells the
lawyer, "Ask him where the $10 million bucks he embezzled from me is?" The
attorney, using sign language, asks the bookkeeper: "Where's the money?"
The bookkeeper signs back, "I don't know what you're talking about". The
attorney tells the gangster: "He says he doesn't know what you're talking about."
The gangster pulls out a pistol, puts it to the bookkeeper's head and says, "Ask
him again!" The attorney signs to the bookkeeper, "He'll kill you if you don't tell
him!"
The bookkeeper signs back, "OK! OK! You win! The money is in a brown
briefcase, buried behind the shed in my cousin Enzo's backyard in Queens!"
The Godfather asks the attorney, "Well, what did he say?"
The attorney replies, "He says you don't have the guts to pull the trigger."

Are you getting your head overloaded with information that comes to you right from the
SHARKS? Do you unknowingly behave like a MINNOW?

-How do Sharks mislead the Minnows?

-Via the MEDIA which they control 1000% ...or maybe 1020% :)

The power of information, especially when its Source is considered valid, is tremendous.
Information can make you or break you. Especially if you are a Trader, basing your trading
decisions on it.

-What is the true meaning of fundamentals for traders?

-Traders, considering the Reports, the Releases and the Central Banks announcements come
straight from the “horse’s mouth”, have no second thoughts regarding their validity. In fact,
many investors are so addicted to the Mainstream Financial Media they actually feel disoriented
and frustrated should they ever have to think for themselves.
And that’s exactly what the sharks want.

They want you to rely on the information they’ll feed you with. Accredited analysts - sharks’
employees- have done such an excellent job presenting to you what has been done, what is
going on, what will happen next and why.

So even if you’d like to think a bit about the possible scenaria, they remove this necessity out of
your view. Suddenly you don’t question anything at all. Figures, rates, estimates, analyses, may
be pretty clear and pretty cooked at the same time but you don’t even dare to wonder. You just
swallow the information without chewing it. And then come multiple confirmations from
various “reliable” sources -all owned by the sharks- that make it practically impossible for you
to go against their core. It’s You against their firepower.

-What do sharks want so desperately?

-LIQUIDITY.

And now let’s dig a bit deeper to the story I already presented above about the TWO WAYS
sharks can suck minnows’ blood.

Sharks are extremely greedy. Their orders are tremendous and every time they want to join a
move, they pick strong trends, especially fresh ones. Usually strong trends have most investors
aligned to one direction. That’s what sharks want. With the right kind of misleading
information, they’ll cause spikes that will kill hundreds of thousands of accounts, giving them
the Liquidity they need to jump in.

Next time, you’ll be tempted to monitor a NFP report or any Central Bank’s release, think
twice...think S H A R K S ! Trusting them is like going to the war buying your weapons from
your enemy. Guess what sort of weapon you’ll get…
Manipulated or not, three are the main Market’s Conditions :

1. Trending : when price is clearly moving to one direction, UP or DOWN

2. Range Bound : when price is moving in a ZIG-ZAG mode within a range
3. Consolidating : when price is almost steady moving sideways

If you observe Market’s physiology studying its historical data on your Charts, you’ll notice that
after a strong trend, in most cases a range-bound phase follows during which, Market is trying to
negate price’s momentum with ZIG ZAG Moves that cancel each other and then comes
consolidation where price momentum has almost zeroed down because it moves sideways with
almost non existent volatility.
Imagine that price is a super fast TRAIN.

Would you ever expect this train to STOP at once after reaching the peak of its velocity to one
direction? That’s impossible. TRAIN will enter a ZIG ZAG route gradually cutting down its
speed and then will stop while its Drivers will decide which Itinerary to follow next at full speed.

Of course, this is not a rule and each pair maintains its own specific idiosyncrasy. Quite often
reversals happen so abruptly, even on relatively higher Time-Frames, that we may find it
difficult to adjust psychologically from an extremely Bullish Environment to an extremely
Bearish one.

The TRENDING - RANGEBOUND - CONSOLIDATING -TRENDING Market’s Physiology

Cycle is one we see in Financial Instruments that are not heavily manipulated.

During a Currencies-War like the one we’re witnessing the last couple of years and most
possibly for at least a couple more, the phenomenon of the “Knee-Jerk Reflex” as I like to call
it, prevails in Market’s Physiology, as Market is being heavily manipulated and after each
artificial move loses steam, it reacts aggressively to the opposite direction. Under such
conditions, be aware of the TURNING POINTS -we’ll study them shortly- on DAILY Time-
Frame and their mechanics.

What happened to the trend? When Bulls turn into Bears.

It took me quite a bit of time to familiarize myself with Market’s “slang language” using terms
like “bullish” or “bearish” in order to describe an upward or downward moving instrument.
And like most New Traders, I was shy to ask why were such terms used instead of plain words
like UP or DOWN. Eventually I found out that when Market moves aggressively UP it looks
like an attacking Bull who puts his head down and then strikes upwards with his mighty horns.

Behind a Bullish Market there is enthusiasm and greed. When you think Market, think people,
especially “sharks”. When they get the feeling that price is at relatively low levels, they pump it
up as high as it gets.

Usually though, UPward moves take more time to shift price to an equal pips-distance than
DOWNward ones. And except the few Bullish Breakout Candlesticks, we will see many small
Bullish as well as Bearish ones on price’s way to the next higher level. Depending on the Time-
Frame we’re viewing the Market from, we may even count more Bearish Candlesticks than
Bullish on a clearly UPward Wave.

This phenomenon may look weird at first glance, but there is nothing weird about Bulls wanting
to close some of their winning positions pocketing their profits while no one is looking :)
Market movers, -the “sharks”- behave like attacking Bears when they want to push price Down.
Bears stand up on their feet and fall against their prey. Usually a Bearish Market moves faster
than a Bullish one and also gives more profits. It seems like gravity is a Downward Move’s ally
and I’m giving an explanation to this repetitive pattern with one of my hypotheses regarding the
“Turning Point” Market’s behavior.

Indeed it is a far better option to align ourselves with the Bears than with the Bulls although it is
fear and panic that makes the price fall aggressively.

But apart from all these terms and interpretations, it’s all about the SAME PEOPLE who push
the price UP or DOWN depending on their best interests. Understanding their motives is of
essential importance for our successful trading because it goes without saying that we should
ALWAYS follow the “sharks”.

Shallow and Deep Corrections

The term “Correction” makes sense on Trending Markets, because when the Market is Ranging
we’re talking about price’s Zig-Zag Moves within a range possibly trying to balance after a big
move and when the Market is in Consolidation mode, we’re talking about Sideways Movement
of the price which practically stands still at the same level for as long as the Consolidation lasts.

Excluding Consolidation, which is easy to spot at a glance and also excluding Range-bound
Move which we can also identify with the assistance of Trendlines or Bollinger Bands,
especially after a Zig and a Zag have given us hints about the Upper and Lower Limit-Levels of
the Range, when Market is Trending, spotting or expecting Corrections is trader’s maker or
breaker.

Again, we have to get in the “sharks” shoes and I’m not being humorous here. There are two
categories of Traders in the Market at any given time: those who move the price -the ones I call
“sharks” because that’s what they are - and the rest of us who have zero influence on the price’s
behavior. “Sharks” are few but move tremendous volumes of money. The rest of us -let’s call us
“minnows” - move substantial volumes collectively but each one of us moves volumes that in
most cases are insignificant.

Using common sense which is extremely uncommon though, all we have to do is ...follow the
“sharks” and that requires a good understanding of their main concerns and intentions.
Unfortunately only 5% of the “minnows” get this right.

My hypothesis on that is that the vast majority of us that make the “minnows” population, react
intuitively and instinctively to the Market’s moves instead of using our brain to make simple
sequences of logical steps reaching conclusions that will position us on the right side of the trade.

We are conditioned since our early childhood to follow the majority and be with the majority for
whatever we are about to do. This concept is based on the fallacy that “so many can’t be
wrong”.

Tragically though, there is not a single trace of logic in a flock’s behavior other than the
imitation mania for the mere sake of imitating. And this fact is the backbone of our self
destructive life-attitude which leads us where the flock goes….down the drain with almost
everything we do. If the flock’s attitude was the right one, the whole planet’s main problem
would be boredom.

Now, if you’re concerned about breaking this “flock-attitude” thinking pattern -or should I say
non-thinking pattern?- because you may find it almost impossible, let me tell you that FOREX
Trading gives you the perfect excuse to practice getting rid of it. It’s simple but isn’t easy. All it
takes is some counter-intuitive thinking to the opposite direction of the majority, literally being
under sharks’ skin :)

The difficulties are that you have to think instead of letting yourself go with the flock, you have
to be patient instead of being restless and ready to jump in the trade at the blink of an eye and
you have to make disciplined effort to interpret what you see on the Charts instead of being
tempted to “bite” the MEDIA info-baits.
The benefits are many starting from the fact that you’ll be using your “brain muscle” which
catapults you to an elite of people from all walks of life, not just trading, who think for
themselves and don’t delegate their “thinking” business to others. Thinking is high frequency
pure energy and beats time twice because first you run faster than it when you think and second,
you manage it effectively being its master, therefore part of FOREX Trading excitement is the
result of the challenge that keeps us young and at the edge of advanced thinking. It’s excellent
practice of a principle we can apply on all fields of our lives where people are involved because
we’ll readily be able to get “under their skin” and interpret their intentions and actions looking
from the right angle. And of course we’ll make profits because instead of splashing in Market’s
uncharted waters without knowing where to look and what to expect, odds pile up to our favor.

Before we go to the Charts and look at the types of Correction, I’d like to suggest you refresh
your knowledge about FIBONACCI Retracement Tool because we’ll need to use it a lot and
very often when expecting or evaluating Corrections, mainly in conjunction with Bollinger
Bands and sometimes Stochastics too.

And here is the 1 Million Dollars question:

-Do you think sharks are in the trade for the glory or for the money?

-You’re right. They’re in it for the money.

 The opposite scenario makes excellent material for your
morning LAUGHTER -EXERCISE which I didn’t tell you
about because was afraid you’d think I’m crazy. Now that
you’ve read so far, you already know I’m crazy but you don’t
mind….and I LOVE YOU FOR THAT!

So yes, the sharks are in the trade for the money. I would do the
same if I were a shark but being a minnow doesn’t seem to
make me less money-oriented...hahahahaha! And although this is the healthy trading attitude,
95% of all minnows seem to ignore it and go for the glory till their Accounts get heroically killed
down to the last penny.

A simple rule you should keep in mind when looking at a trend, is that the price moves 2 Steps
UP/1 Step DOWN or 2 Steps DOWN/1 Step UP. That happens because sharks push the price
UP or DOWN and after a big wave, pocket around half of their profits closing around half of
their positions.

So if we see a big move which we missed joining and then a Correction which is not as deep as
almost half of the previous move, we should WAIT PATIENTLY for a proper -at least half deep
as the big move- Correction before we consider jumping in the trade to the direction of the big
move.
Roughly, the Proper Correction Rule most frequently applies at around 50.0 FIBONACCI Ratio,
next comes 61.8 and even 75.0

Regarding the Time-Frames, just

keep in mind that the Correction Rule
is attached to a phenomenon that
happens on ALL Time-Frames the
way each one is enveloped inside the
higher one.

So practically during a move, we see

a Correction happening for example
on M15 TF then price keeps going to
the direction of the main move, then a
proper correction happens on M30
TF , after that price keeps going and
eventually we see a correction on H1
or H4 probably going all the way to
DAILY TF depending on the magnitude of the main move.

Correction’s Physiology
Corrections usually happen in the form of Statistical Validation Moves to the Median Bollinger
Band which in most cases is pretty close to Kijun Sen Plateau (flat level).

-Should we trade the corrections or not?

-We can trade a Correction going 2 or 3 Time-Frames lower than the Main Time-Frame where
we’d consider joining the main move from. For instance, if we WAIT on H4 Time-Frame to
enter Short (SELL) after price makes a statistical validation move up to the Median Bollinger
Band, we can trade the Upward Correction, BUYING from M15 Time-Frame and using both
STAY IN /Exit and Stop-Loss Trailing Criteria.

-How do we trade the main move after the Correction?

-It is essential to trade the continuation of the move from the Time-Frame where the proper
Correction happened and Bollinger Bands are a very helpful tool for that because the highest
Time-Frame where Correction happened is the highest one where price interacted with the
Median Bollinger Band. So after we confirm which is the highest Time-Frame where Correction
is completed, we have to make sure that Correction is over and price has resumed its Main
Trend. For this purpose, we can use the Candlesticks, Bollinger Bands and Stochastics. After an
UPward Correction, if we see a Swing High above the Median Bollinger Band with a Bearish
candlestick closing or crossing below it - depending on the Time Frame - and Stochastics making
a Bearish Crossover preferably above 80-level Line, we know that Correction is over. Depending
on the Time-Frame, our risk management rules and the Strategy we apply, we may Enter or wait
for additional confirmations from ICHIMOKU or other tools. After a DOWNward Correction, if
we see a Swing Low below the Median Bollinger Band with a Bullish Candlestick closing or
crossing above it -depending on the Time Frame- and Stochastics making a Bullish Crossover
preferably below 20-level Line, we get the Signal that Downward Correction is over. You know
I put ICHIMOKU in my salad too, so please don’t laugh if I tell you that looking for a KUMO
Breakout -validated by Chikou Span - to the direction of the main trend on M5 Time Frame,
always helps :)

Checking for the highest Time Frame where a Pair uses to make its Corrections within a Big
Wave, touching the Median Bollinger Band, is also a way to set a Pair’s “Trading Profile” which
makes things a lot easier regarding our Entries, Exits and RE-Entries.
Spotting the Correction Pattern, is a very practical way to set our Take-Profit Targets keeping in
mind the 2 Steps UP/1 Step DOWN or 2 Steps DOWN / 1 Step UP high statistical occurrence
mode of price action and double-checking with the assistance of FIBONACCI Retracement
Tool.
Of course, when setting our TP in this case, we don’t have to go for the 100% of the pips of the
main move. You’ll realize that pocketing 3/4 of it are more than enough.

Correction Profile/Pattern
Behind Price Action there are people. And us, people, are creatures of habit, therefore we follow
certain behavioral patterns repeatedly. Those behavioral patterns appear on the Price Action and
although the Market Movers -big sharks- usually BUY or SELL on Turning Points which we’ll
study in one of the next chapters, Market Followers do leave their behavioral patterns marks on
the Price Action in a certain manner. That’s why “pattern recognition” is an essential skill for
the trader.

There are no patterns to look for in a Rangebound Market Condition or in a Consolidation.

The Pattern we’ll study here is apparent in Trending Market’s Condition and I call it “Correction
Pattern” or “Correction Profile” of the pair.

As we already saw when studying candlesticks and price action, the definition of UPTREND is
that “the pair is making higher highs and higher lows” while in DOWNTREND “it is making
lower lows and lower highs”.

Using Bollinger Bands and Fractals as our guide, we’re looking to find the Time-Frame which
can be Daily, H4 or lower, on which, price is touching the Median Bollinger Band making a
correction and then it continues to the direction of the main trend.

Correction will be highlighted by a Fractal at the top of a Swing High above Median Bollinger
Band or at the bottom of a Swing Low below it. Spotting the Time-Frame where this happens
frequently in a similar manner, will help us a lot with our Trade Setups .

Usually, the pair manifests its Correction Profile on the same Time-Frame for both its Uptrends
and Downtrends. And eventually there may be a slight shift to another Time-Frame but it may
happen after many months and also the pair may return to its previous Correction Profile Time-
Frame after a little while.

Recognizing the Correction Pattern that makes up the Correction Profile of a pair is very useful
in order to design Trade Setups that require minimum monitoring on our side, either Trading the
Corrections or the Continuations of the move.

When trading a correction, we enter from M5 Time-Frame after a candlestick closes

above/below both Tenkan Sen and Kijun Sen with BOTH lines and Median Bollinger Band
sloping to the direction of the correction. We place our Stop Loss below the last Low or above
the last High on Correction Profile Time Frame and our Take Profit Target at the level of the
Median Bollinger Band where a vertical line placed on the candlestick where Stochastics made
the cross to the direction of the correction, crosses Median Bollinger Band.
When trading the Continuation, we enter from M5 Time-Frame after a KUMO Breakout to the
direction of the main move, validated by Chikou Span. We place our Stop Loss above the Swing
High above Median Bollinger Band or below the Swing Low below Median Bollinger Band and
our Take Profit Target at the 3/4 of the continuation move which usually is double amount of
pips than average correction.

EURUSD Correction Profile

GBPUSD Correction Profile
AUDUSD Correction Profile
USDJPY Correction Profile
EURCAD Correction Profile
XAUUSD (GOLD) Correction Profile
End of Correction Confirmation
Being a big fan of simplicity, I’ll give you one “End of Correction” Indication which has worked
miracles for me and I’m sure you’ll love it too : KUMO BREAKOUT on M5 Time-Frame,
validated by Chikou Span, to the direction of the main trend. End of story.

Now I have an issue filling up this Chapter with some blah-blah that will make it look more
important. So here it is : blah blah blah blah blah blah …..hahahahahahaha!

Profit Taking
I can’t stress enough the most important fact you have to keep in mind regarding the Market and
price’s moves : people behind the moves.

And to help you even more, I’ll use my favorite term for market-movers : S H A R K S!
Sharks move the price UP or DOWN. Little fish either follow the Sharks or get slaughtered.

Also keep in mind that pips have ZERO VALUE unless they can turn into money and that
happens when a CLOSE Trade Order is successfully filled.

That means if Sharks pushed price 500pips up with their BUY Orders, in order for them to turn
the pips into money and stack it to their Bank Accounts, they have to be able to CLOSE their
Long Positions. And here is where Sharks’ drama begins.
If you are a Minnow and want to close your 1 Standard LOT Long Position which made 500pips,
you’re only one click away from transforming your winning pips into cash.

But if you are a shark who wants to close a Long Position of 10000 Standard LOTS, your click
will get a “Sorry, your Order can’t be filled right now...please try later” or even an UN-
Responsive SERVER’s BUZZ sound. That makes you a shark who has made a ton of UN-happy
and totally useless pips that can’t exchange with real money.

For this reason, sharks usually cause two kinds of Price-Fluctuations :

a. Profit Taking minor moves on a candlestick -per-candlestick basis, which we often see on
XAUUSD (GOLD) and high volatility/high leverage pairs.
b. Proper Corrections at 50.0 or 61.8 FIBONACCI Ratio SMOOTH with a strong Reversal
Candlestick Pattern like Double Top or Double Bottom or TRICKY with TURNING
POINT Pattern at their beginning.
Turning Point

The TURNING POINT Pattern is probably the greatest source of confusion for the majority of
traders, almost a paradox that can even skew the readings of Technical Analysis Indicators but
can’t trick the most powerful Software in the world, human brain.

Why does it take endless trading days for a trade to mature especially when a Big Move is at its
beginning? Why is it that at the TURNING POINT after a strong UP or DOWN Move,
especially on higher Time-Frames like H4 or DAILY, do we see so many Spikes and so many
candlesticks cancelling each other?

I thought a lot about the best way to present the TURNING POINT Pattern to you and decided to
do it candlestick-per-candlestick on Charts for as many pairs as possible, till the picture and its
mechanics get imprinted in your mind.

Let’s start from the “making” of the MARKET.

There are two kinds of successful Traders in the Market, the Market Movers and the Market
Followers. These two kinds constitute less than 5% of all those who call themselves “Traders”.

Market Movers are the ones I use to call “SHARKS” and there are two types of them. Sharks
from Group A are Institutional Traders representing Central BANKS and Currencies Proprietors
(most Currencies are owned by Private Entities). Sharks from Group B are Independent FUNDS.
The two Groups of Funds may seem to cooperate at times, but quite often have conflicting
interests. To the small traders, it doesn’t make any difference if a Big Move is the result of
Sharks A manipulation or Sharks B orchestration.

The vast majority of small Traders are not Market Followers, they are MEDIA Followers. Sharks
control the MEDIA, therefore they make the perfect “blood source” for them.

In order to be a Successful Trader, you have to be a Market Follower and for that reason, getting
into Market Movers’ minds is of key importance.

First of all you must note that Market Movers BUY and SELL on Turning Points mainly from
DAILY Time Frame. They are not the ones responsible for minor fluctuations on smaller Time-
Frames. Profit Taking and Trend Following is taking place there, both actions originating from
small Traders.

The constant problem Sharks have, has a name…LIQUIDITY.

As we see at the Daily Chart of NZDUSD, Sharks that BOUGHT Low, pushing the price 600+
pips UP, have now only USELESS PIPS in their hands which must turn into money by all
means.

To do that, they have to CLOSE their BUY Positions. Closing the BUY Positions, they’ll be
giving SELL Orders. But if their SELL Orders can’t be filled by matching BUY Orders, they
won’t be able to turn their earned pips into cash.

And because finding a huge volume of BUY Orders available when price is already at a peak
level is next to surrealistic, their Odyssey - which we, small Traders experience as TURNING
POINT Pattern- begins.

Sharks need to trick, to fool, to scare and to force small Traders to BUY from the Top of the
Upper Bollinger Band on Daily. I know it is ridiculous and no trader with a minimum level of
common sense would ever fall in this trap.

But as they say, “common sense is more rare than blue diamonds”.

Sharks count on that.

First, they’ll order the army of the Mainstream MEDIA journalists -who are their employees
because they own the MEDIA- to post articles with opinions, analyses, predictions,
assumptions, theories, conclusions, rumors, suggestions, expectations, crystal ball readings, and
of course Reports –all of them fabricated- to generate a BUYING Climate.

This climate will have two immediate effects :

1. Many small traders who were out of the Market, will BUY.
2. Many small traders who were positioned SHORT (SELL) will get scared and close their
SELL Positions

In both cases, Sharks will get some “blood” in the form of BUY Orders that will fill their SELL
Orders.

But probably, they won’t be able to fill all their orders, because 600+ pips move is not just any
move.

Let’s see what actually happens during a TURNING POINT PATTERN Candlestick by
Candlestick.
Our Conclusions after studying the Turning Point Pattern are the following :
1. Trading from the Daily Time Frame offers excellent trades but there is the Turning Point
TRAP which we should be aware of and avoid as much as possible.
2. To avoid Turning Point Pattern, we should take from Daily Time Frame, trades that give
us no more than 300-330pips. If we see that the previous move was an Upwad or a
Downward Mammoth Move of 500, 600, 800 or more pips, we should be prepared for a
merciless Turning Point Pattern aiming to kill our account in order for the Sharks to
resolve their Liquidity issue.
3. If we are determined to trade from Daily Time Frame anyway, we must make sure the
previous move has finished, we must place our SL below the down Spike or below the
Lower Bollinger Band when BUYING, -whichever is lower- or above the up Spike or
above the Upper Bollinger Band when SELLING -whichever is higher- and NOT Trail it
at all till our Take-Profit gets hit.

Chapter 37 : Trading Strategies

Trading Strategies are like recipes. There are as many effective strategies as successful traders
and even more. You may even develop your own as your experience grows. It’s not the Strategy
that makes the winner, it’s his/her brain.

I believe that an excellent way to classify strategies is by the Market’s Condition they apply to.
When you think about Market’s Conditions and suitable strategies, think about road conditions
and suitable cars. You can’t use an agricultural tractor to go shopping downtown, you’ll use a
city-car. You can’t use a fancy sedan at a dirt road, you’ll use a jeep. On the other hand, a
roadster is ideal for a high-speed highway.

● Trending Market
○ ICHIMOKU Trading
You’ll find various Strategies using ICHIMOKU, in chapter 15 where I presented the System.
Below please find ICHIMOKU 4 Time-Frames Strategy’s Table.
 ○ Bollinger Bands + Stochastics on DAILY TF

Applying the Bollinger Bands + Stochastics Strategy on DAILY Time-Frame when Market is
trending means that we can have TWO Scenaria per Trend : a) Correction or b) Continuation
Vectors -see relevant chapter- will help us estimate the length of the expected move.

When there has been a strong UPtrend, we may see a Bearish Reversal Candlestick pattern
forming on the Upper Bollinger Band, accompanied by a Bearish Stochastics Crossover. In this
case, Both Median and Upper Bollinger Bands may be sloping UPwards, while Lower Bollinger
Band is Curved UP. It is important to see a previous FUNNEL broken by one of the two
Bollinger Bands, or if the Upper and Lower Bollinger Bands were both going UP, we want to see
one of the two being parallel or curved at the point it touches the vertical line placed on the
current candlestick. Furthermore, we want to see Kijun Sen, the Blue Line of ICHIMOKU being
Flat -forming a Plateau- which will mean that the previous strong UPtrend has stopped and we
also want to see FIBONACCI 50.0 Ratio coincide with Kijun Sen Plateau if we draw
FIBONACCI Retracement Tool from the Bottom up to the Top of the previous strong UPward
move. If FIB 50.0 falls exactly on Kijun Sen Plateau, it means the previous wave has been
completed and price will not go higher for now.

We are looking to enter Short (SELL) trading the Correction, which stands for a statistical
validation plunge down to the Median Bollinger Band.

After price touches the Median Bollinger Band, if we see it forming a Swing Low below it,
confirmed by a Bullish Crossover of the Stochastics, we can place a BUY Order trading the
Continuation of the UPward Trend. The EXACT Opposite sequence of Signals happens after a
strong DOWNtrend. The correction is up to the median BBAND and then price makes a Swing
High above it and continues falling lower.

IMPORTANT TIP : Stochastics’ Crossovers are VALID only when price is interacting with one
of the three Bollinger Bands.

Let’s assume that we have entered Short (SELL) on the Upper Bollinger Band after a Bearish
Crossover of the Stochastics, have placed our TP at the Median Bollinger Band level, but before
price approaches the Median Bollinger Band, Stochastics make a Bullish Crossover. This
crossover is INVALID and we should ignore it.

Another rule we should always check before we Enter from the Median Bollinger Band
regarding Stochastics, is related to the completion of the previous move’s cycle with valid
crossover. A proper Price Action Cycle starts with Stochastics making a Bullish Crossover
inside the Oversold Zone -below 20 level line- and ends with Stochastics making a Bearish
Crossover inside Overbought Zone - above 80 level line- or the exact opposite, from overbought
to oversold. And of course the Oversold/Overbought Zones Crossovers happen while price
interacts with one of the three Bollinger Bands. Knowing this, we avoid exiting with FAKE
Crossovers and we avoid Entering without the previous FULL Circle having been completed.
On the particular trade on GOLD, at 16/10/15, we’re looking at 3000+ gold-pips (300+forex
pips), as soon as price touches the Median Bollinger Band, assuming we Entered now and not as
soon as our Entry Criteria were met.
○ Bollinger Bands - Fractals - Alligator
○ Bollinger Bands - MACD -PSAR on H4 TF
○ “Catching the Bus”
Would you ever chase a running Bus if you wanted to catch it?
You’d definitely wait for the next one at the BUS Station. But that’s not what the majority of
traders do. They get blinded by the “euphoria syndrome” and jump in a move unfortunately
right before its end in most of the cases and because they are not patient enough -or their account
can’t tolerate the risk- they exit with losses as soon as correction starts.

The “Catching the BUS” Trading Strategy applies ONLY on Trending Markets. Ideally, we
want to see either trend continuation on DAILY Time-Frame, or a clear ZIG ZAG Action within
a Wide Range in Progress again on DAILY Time Frame, with all three Bollinger Bands parallel
and preferably flat. When we see one of the two Market’s Conditions on DAILY Time-Frame,
we use the “Catching the Bus” Strategy trading from M30, H1 or H4 Time-Frames. Identifying
pair’s Correction Profile is of key-importance towards picking the Time-Frame we’ll trade from.

Using this Strategy, we want to “Catch the Trend’s Bus” from the Bus Stops on Median
Bollinger Band. We can use only Bollinger Bands, we can add Fractals because they give us
visual representation of Swing Highs and Swing Lows, we can add ICHIMOKU to get extra
confirmation regarding price’s momentum by Tenkan Sen, Kijun Sen , Chikou Span and Leading
KUMO , we can use Stochastics again as an extra confirmation when they make a crossover
after a Swing High or Swing Low are completed, we can alternatively use Alligator in
conjunction with Bollinger Bands and Fractals so that its lines give us a visual signal of price’s
momentum and any directional change intentions. The basic Indicator we use for the strategy is
Bollinger Bands System and we can combine it with one or more tools that enhance its signals.

○ On a proper trend : WAIT for the Correction

WAITING is the hardest part in Trading but practicing patience will be extremely rewarding.
Most new traders are eager to jump in a trade even if it is a minor correction which may not even
have enough strength to reach the Median Bollinger Band in case we expect it to go there.
Although it may seem like a tempting 30-40pips move, I suggest you ignore it and not even
consider trading it from M5 Time-Frame. WAITING for the Correction means we WAIT for the
“Bus” - Price Action- to slow down and make a STOP at the Median Bollinger Band, so we can
jump in safely taking a nice and worthy ride following the main move. When is correction over?
Theoretically, when a candlestick completes the Swing High above the Median Bollinger Band
closing below it or the Swing Low below the Median Bollinger Band closing above it on the
Correction Profile Time-Frame. But actually, you can “cheat” a bit and check the immediately
lower Time-Frame looking for a candlestick closing below or above Tenkan Sen there with
Tenkan Sen sloping to the Direction of the main move.
Unless if you prefer to use some ICHIMOKU Magic, going down to M5 Time-Frame and
waiting for a KUMO Breakout there to the direction of the Main Move, validated by Chikou
Span which must be above past price action and above past KUMO in case of Bullish Breakout
or below past price action and below past KUMO in case of a Bearish Breakout. Once
Correction is over, we place our Entry Order with SL being above the last Swing High or above
KUMO if possible, in case we enter Short (SELL) or below last Swing Low or below KUMO if
possible, in case we enter Long (BUY).
○ After a Breakout : FOLLOW the Correction from TF to TF
The “moral” of the trade is that instead of following the correction/reversal starting from M5 TF
as it evolved, we could have stayed out instead , WAITING for the price’s interaction with the
Median Bollinger Band on pair’s Correction Profile Time Frame -which is H1 TF for now- to
finish and jump in with momentum from H1 TF when all Entry Criteria were met. And we had a
very explosive “BOTTLENECK & FUNNEL” Bullish Pattern which is being studied in
following chapters.

● Scalping from M15 with Bollinger Bands, ICHIMOKU and Stochastics

The concept of SCALPING is about the Trading methodology followed when the Trader is only
aiming at making 10, 20 up to 40 pips per trade, make them fast and get out, regardless of the
Main Trend and Market’s Medium of Long Term intentions. Actually, most Scalpers go for a
handful of trades (SCALPS) per Day -maybe less than 3- pocketing 10-20 pips on each one.

SCALPING is not suitable to every Trader because it requires focused attention for as long as it
takes place, advanced Trading Skills and Iron Discipline.

The Scalping Strategy I’m presenting here, is based on the Condition that there is a Trending or
Ranging Market on the Daily Time Frame and that price is moving close to one of the three
Bollinger Bands on H4 Time Frame.

Having a Trending Market’s Condition on Daily Time Frame, we expect to see clear Upward or
Downward Moves with Momentum on a much smaller Time-Frame like M15 and we’ll
definitely have the opportunity to take advantage of the “Accordion Effect” which will unfold in
front of our eyes multiple SCALPS per Day.

When price is moving within a Range on Daily Time Frame in a ZIG-ZAG mode, we can draw
colorful shapes on our Charts, guiding our Trades within the ZONE either trading the ZIG or the
ZAG.

Using the H4 Time Frame Condition regarding price’s Relationship with one of the three
Bollinger Bands, we pinpoint our Entry on a Statistically Significant Price Action Turning Point,
at the beginning of a new Move inside the Bigger Trend, looking to enter with momentum. This
way, we can avoid false entries or entries to unworthy trades -minor corrective moves- having
the advantage of the ideal timing.

We use candlestick patterns, Stochastics crossover and additionally Kijun Sen being Flat as our
confirmations that price wants to move towards the next Bollinger Band on H4 Time Frame. We
check for a valid KUMO Breakout on M5 Time Frame giving us the “green light” to enter from
M15 Time Frame and on M15 Time Frame, we want to catch the new move early with
momentum.

It helps a lot, if we have already identified pair’s Correction Profile because we can make quite
accurate estimates regarding a safe Stop Loss Placement and a reasonable and achievable Take
Profit Target Placement.

SCALPING AUDUSD
SCALPING EURUSD
SCALPING GBPJPY
Range-Bound Market
○ Bollinger Bands & Stochastics on Daily TF
Applying the BBANDS+Stochastics Strategy on DAILY Time-Frame when Market is
Rangebound, actually means that all three Bollinger Bands are almost FLAT and parallel to each
other. If the range is relatively wide, you’re in for AMAZING TRADES where each move starts
from the Upper Bollinger Band all the way to the Lower and vice versa. Do yourself a big favor
and ...chase them.
 ○ Bollinger Bands - MACD -PSAR on H4 TF if Range-Bound Market on
DAILY TF

Consolidating Market
○ Bottlenecks and Funnels

Practically, “BOTTLENECKS & FUNNELS” is the most powerful strategy you can learn about
trading the breakouts and breakouts are every trader’s dream.

It’s based on Bollinger Bands and the principle that Consolidation is followed by Breakout,
Stasis is followed by Explosive Volatility, Sideways Movement is followed by Extremely Strong
Move to one direction. Since Bollinger Bands are price action “containers” reflecting volatility
cycles, they make the perfect tool for spotting a Breakout early and that’s how I’m using them on
this Strategy.

Although “BOTTLENECKS & FUNNELS” Strategy is based on Bollinger Bands and can be
effectively applied using only Bollinger Bands, being the deeply insecure woman I am, I like to
add all my favorite Indicators to my Chart so that I can get as many extra confirmations as
possible from multiple tools. I’ll also share with you some variations using different sets of
tools.

The 4 Stages of B&F (Bottlenecks & Funnels)

1. Upper and Lower Bollinger Bands’ CONVERGENCE
2. Narrow BOTTLENECK Formation
3. Median Bollinger Band is forming a “KNEE”
4. Upper/Lower Bollinger Bands edges turned outwards forming a “FUNNEL”
STAGE #1 : Bollinger Bands CONVERGENCE. When Upper and Lower Bollinger Bands
come close to each other, it means that price’s volatility decreases therefore it will be moving
within a narrower zone for now. Price Action is an extremely dynamic phenomenon, therefore
Bollinger Bands adjust their elasticity to its behavioral patterns and in the case of Upper/Lower
Bollinger Bands CONVERGENCE, imagine a coil-spring being pressed from both edges.
STAGE #2 : Bollinger Bands form a narrow zone which looks like a BOTTLENECK. After
Upper and Lower Bollinger Bands having converged, all three become parallel to each other.
The BOTTLENECK has three properties :
● height : The smaller the height the stronger the Breakout that will follow. An extremely
narrow BOTTLENECK, signifies almost non existent volatility, price is moving
sideways, candlesticks have very small bodies, each new candlestick almost cancels the
previous one and quite often we see big spikes. If the height of the BOTTLENECK is just
a little smaller than the distance between the Upper and the Lower Bollinger Bands
before their CONVERGENCE, then we’re not seeing a BOTTLENECK, we see a
RANGE and if all three Bollinger Bands are parallel to each other and almost flat, we
should expect a ZIG ZAG Range-bound kind of Price Action which leads to extremely
profitable trades if seen on Daily Time-Frame or higher- sometimes on H4 Time-Frame
too-.
● length : The length of the BOTTLENECK varies from a Spot Bottleneck -where we just
see one small body candlestick signifying both Convergence and Bottleneck at the same
time, followed by the Breakout Candlesticks,- to a Long Train Bottleneck where
sideways movement seems to last forever. In both cases, breakouts that happen next, can
be explosive.
● inclination : The BOTTLENECK may be flat, but things get tricky when it slopes up or
down. Of course, we never make our trading decisions at the stage of the bottleneck, but
inclination of the three Bollinger Bands to one direction may create false biases in our
mind. Why? Because in most cases when we see the bottleneck sloping to one direction,
we’re prone to enter to that direction while breakout happens to the opposite one. To
understand the mechanics of this weird price action behavior, I want you to close your
eyes and remember when we were kids competing running. Were we jumping forth at
once? No. We were stepping or swinging backwards gathering momentum before rushing
forwards. And that’s exactly what price is doing when we see a narrow bottleneck
sloping to one direction. Price accumulates energy in order to shoot to the opposite
direction.
STAGE #3 : Median Bollinger Band changes direction forming a KNEE. This Stage is very
crucial because although we’re not making any trading decision here, we now know the direction
of the Breakout, because Median Bollinger Band is a very reliable indicator for that purpose. In
the majority of the cases, when we see the BOTTLENECKS & FUNNELS Pattern, Median
Bollinger Band does form a KNEE at the turning point of the move, but there are some
exceptions where Median Bollinger Band keeps sloping to the previous direction or its “KNEE”
is so subtle we can hardly notice it. I suggest switching to the smaller Time-Frame looking for a
clearer KNEE of the Median Bollinger Band there, although the last Stage where the FUNNEL
opens, leaves no space for doubt.

STAGE #4 : Upper and Lower Bollinger Bands Edges turn outwards forming a FUNNEL. The
formation of the FUNNEL reflects the explosive increase of volatility due to which, the elastic
Bollinger Bands get transformed in order to be able to contain the extreme price action that is
expected. FUNNEL is the 4th Stage of the “BOTTLENECKS & FUNNELS” Pattern and the
one that signals our Entry on the condition a Candlestick CLOSES above the Upper Bollinger
Band in case of UPward -Bullish- Breakout or below the Lower Bollinger Band in case of
DOWNward -Bearish- Breakout.

Using only Bollinger Bands we BUY when a Bullish Candlestick closes above Upper Bollinger
Band after Median Bollinger Band has formed an UPward KNEE and FUNNEL has opened. We
SELL when a Bearish Candlestick closes below Lower Bollinger Band after Median Bollinger
Band has formed a DOWNward KNEE and FUNNEL has opened.

Although the 4 Stages and the Entry Criteria I mentioned above, are more than enough for
extremely successful trade setups, I like to add ICHIMOKU, Fractals and Stochastics to my
Chart, seeking multiple confirmations for my Entries.
Using Bollinger Bands, ICHIMOKU KINKO HYO, Fractals and Stochastics, here are the Lists
of BUY and SELL Entry Criteria :
BUY
1. Median Bollinger Band has formed an UPward KNEE
2. Upper/Lower Bollinger Bands Edges are turned outwards forming a FUNNEL
3. A Bullish Candlestick has closed above Tenkan Sen (ICHIMOKU Red Line) and Kijun
Sen (ICHIMOKU Blue Line)
4. Both Tenkan Sen and Kijun Sen are sloping UPwards
5. A Bullish Candlestick has closed above Upper Bollinger Band, or a Bullish Breakout
Candlestick -with bigger body than the last 10 candlesticks, moving only UPwards-
moves above Upper Bollinger Band
6. The most recent Fractal formed in the BOTTLENECK was a Down Fractal below
Median Bollinger Band and ideally below Lower Bollinger Band too.
7. Chikou Span (ICHIMOKU Green Line) has crossed above past price action going UP.
8. Stochastics go UP
9. The Edge of the Leading KUMO showing Bullish Momentum increasing. If it is a
Bearish KUMO, we want to see the Upper and Lower Edges getting closer to each other
so they eventually cross giving birth to a Bullish KUMO. If it is a Bullish KUMO, we
want to see the Upper Border forming a sharp edge pointing UPwards while the Lower
Border is curved/sloping UPwards.

ICHIMOKU related TIP* :

● Usually a strong Bullish Breakout will follow if the Bottleneck has been formed on
FLAT KUMO or below FLAT KUMO with leading KUMO being thin and Bearish

Let me see if we have enough Entry Criteria already...well...it would be ideal if our neighbor’s
dog barked too...hahahahahaha!
SELL
1. Median Bollinger Band has formed a DOWNward KNEE
2. Upper/Lower Bollinger Bands Edges are turned outwards forming a FUNNEL
3. A Bearish Candlestick has closed below Tenkan Sen (ICHIMOKU Red Line) and Kijun
Sen (ICHIMOKU Blue Line)
4. Both Tenkan Sen and Kijun Sen are sloping DOWNwards
5. A Bearish Candlestick has closed below Lower Bollinger Band, or a Bearish Breakout
Candlestick -with bigger body than the last 10 candlesticks, moving only DOWNwards-
moves below Lower Bollinger Band
6. The most recent Fractal formed in the BOTTLENECK was an UP Fractal above Median
Bollinger Band and ideally above Upper Bollinger Band too.
7. Chikou Span (ICHIMOKU Green Line) has crossed below past price action going
DOWN.
8. Stochastics go DOWN
9. The Edge of the Leading KUMO showing Bearish Momentum increasing. If it is a
Bullish KUMO, we want to see the Upper and Lower Edges getting closer to each other
so they eventually cross giving birth to a Bearish KUMO. If it is a Bearish KUMO, we
want to see the Lower Border forming a sharp edge pointing DOWNwards while the
Upper Border is curved/sloping DOWNwards.

ICHIMOKU related TIP* :

 ● Usually a strong Bearish Breakout will follow if the Bottleneck has been formed on
FLAT KUMO or above FLAT KUMO with leading KUMO being thin and Bullish.

Now please pay close attention. Because Breakouts happen suddenly and the moves are literally
explosive, being FOCUSED makes all the difference in the world. I didn’t give you these long
lists of Entry Criteria to distract you, but to help you stay out from fake Breakouts. All these
multiple confirmations can be checked at one glance which takes milliseconds. Your eyes must
be FOCUSED on the candlestick that crosses above Upper Bollinger Band on a Bullish Breakout
or below Lower Bollinger Band on a Bearish Breakout. Move may be extremely speedy and
many times -especially if we are monitoring the trade from H1 Time-Frame or higher, 60% of
the move or more takes place on the first couple of candlesticks. That means we don’t have the
luxury of WAITING and double/triple checking. We must jump in fast. The keyword here is
“SPEED”. If the candlestick that crosses Upper/Lower Bollinger Band moves relatively slowly,
WAIT for it to close having checked of course all the other Criteria. But if it is exploding, just
check all the other Criteria instantly and JUMP IN without waiting for the candlestick to close.

Before we discuss the Stop-Loss Placement and Trailing as well as the STAY IN/EXIT Criteria
for the pattern, please note that the strategy can be used to any Time-Frame but it yields much
better results when applied on Time-Frames higher than M30 and it is more easily manageable.
STOP- LOSS Placement for “BOTTLENECKS & FUNNELS”
Our main concern when placing our STOP-LOSS Order, is to find the a price level which is
practically immune to price fluctuations against our position and at the same time its distance
from our Entry doesn’t exceed our RISK tolerance limits.

BOTTLENECK which “contains” the sideways price action, in case of a Downward Breakout,
defines the zone above it as IMMUNE to UPward Spikes and in case of an UPward Breakout,
defines the zone below it as IMMUNE to DOWNward Spikes.

And because BOTTLENECK is by default a narrow strip within which price has been
consolidating, “BOTTLENECKS & FUNNELS” is a pattern that enables us to take wildly
profitable trades from relatively high Time-Frames with minimum risk by placing our STOP-
LOSS above or below the BOTTLENECK.

Entering Short (SELLING) after the 4th Stage and the confirmations of a DOWNward Breakout,
we are looking to place our SL above the Upper Bollinger Band where BOTTLENECK is,
making sure it is a few pips above the highest UP Spike of the BOTTLENECK if there is any.

Conversely, entering Long (BUYING) after the 4th Stage and the confirmations of an UPward
Breakout, we are looking to place our SL below the Lower Bollinger Band where
BOTTLENECK is, making sure it is a few pips below the lowest DOWN Spike of the
BOTTLENECK if there is any.

STOP- LOSS Trailing for “BOTTLENECKS & FUNNELS”

STOP-LOSS Trailing aims primarily at protecting our position from sudden Market’s Reversals
that might kill our Account and secondarily at “locking” our pips.

If we only use Bollinger Bands, then Median Bollinger Band makes a good guide which we can
follow trailing our SL a few pips above it on a Downward Breakout or a few pips below it on an
Upward Breakout. That means, we “milk” the trade while Median Bollinger Band is sloping and
we may be stopped out as soon as it turns flat. But it will definitely be a nice ride.

An indicator which is a very helpful tool when it comes to SL Trailing, is Parabolic SAR
(PSAR). So if we only use Bollinger Bands, we may trail our SL a couple of pips above PSAR
Dots on a Downtrend or below PSAR Dots on an Uptrend.
If we use ICHIMOKU KINKO HYO along with Bollinger Bands, Fractals and Stochastics,
trailing our SL a few pips above Kijun Sen plateaus when price is falling or a few pips below
Kijun Sen Plateaus when price is going up is a wise strategy.

STAY IN/EXIT Criteria for “BOTTLENECKS & FUNNELS”

The SETS of STAY IN and EXIT Criteria are actually the two sides of the same coin. Each
STAY IN Criterion becomes an EXIT Criterion when it is breached/reversed.

We discussed all possible alternative SETS of STAY IN/EXIT Criteria with my FXHOLICS
when trading the “BOTTLENECKS & FUNNELS” Pattern and here are our conclusions :

1. We can use our STOP-LOSS Trailing as our STAY IN/EXIT Criterion, which means we
TRAIL our SL either following Median Bollinger Band, Kijun Sen Plateaus or PSAR
Dots and EXIT when our SL is hit.
2. We can STAY IN as Median Bollinger Band is sloping and EXIT when it turns flat, even
if our SL is not hit.
3. We can STAY IN as candlesticks are closing below Tenkan Sen on a Downtrend or as
candlesticks are closing above Tenkan Sen on an Uptrend and EXIT when a candlestick
closes after it crosses Tenkan Sen to the opposite direction.
4. We can STAY IN following the morphology of the Lower Bollinger Band on a
Downtrend or the Upper Bollinger Band on an Uptrend and candlesticks’ relationship
with the band. That means we stay in Short (SELL) as Lower Bollinger Band goes
straight Down and candlesticks close below it or remain attached to it and EXIT when it
starts becoming slightly curved upwards with candlesticks moving away from it.
Conversely, we stay in Long (BUY) as Upper Bollinger Band goes straight Up and
candlesticks close above it or remain attached to it and EXIT when it starts becoming
slightly curved downwards with candlesticks moving away from it.
5. We can STAY IN as Stochastics go UP on an Upward Breakout and EXIT when
Stochastics make a Bearish Crossover above 80 -Level Line. We can STAY IN as
Stochastics go DOWN on a Downward Breakout and EXIT when Stochastics make a
Bullish Crossover below 20-Level Line.

BELL

BOTTLENECK & FUNNEL Pattern is a very powerful one and the only Bollinger Bands
pattern which is stronger than this, usually many times stronger, is BELL.
BELL follows the FUNNEL and as its name implies, while FUNNEL is about Upper and Lower
Bollinger Bands Edges turned outwards after a narrow Bottleneck, BELL is about Upper and
Lower Bollinger Bands Edges turned outwards after a wide Range.

The only TRAP you should be aware of, is that many times, price is making a FUNNEL to one
direction followed shortly after, by a BELL to the opposite direction. Depending on the Time-
Frame you trade the FUNNEL from, you can AVOID THE TRAP by EXITING as soon as you
get confirmations from Upper/Lower Bollinger Bands Edges Correlations -Broken Funnel- from
Stochastics and from Kijun Sen of ICHIMOKU -which turns FLAT- that price wants to move
towards the Median Bollinger Band.

When FUNNEL is real, price does not touch the Median Bollinger Band till it gets
HORIZONTAL.

When FUNNEL is fake and will most possibly be followed by an opposite BELL,price crosses
the Median Bollinger Band while it is sloping.
FAKE FUNNEL AVOIDANCE.

If you have entered a FUNNEL Trade, lookout for the following early warnings of FUNNEL
being FAKE so you can avoid having your SL hit although you entered with Low Risk.
 1. Candlesticks show signs of weakness (spikes) and reversal
2. The Upper/Lower Bollinger Bands Edges show a BROKEN FUNNEL CORRELATION
Pattern.
3. Stochastics make a Crossover opposite to the direction you have entered.
4. Kijun Sen has turned FLAT.
5. A Fractal appears before price crosses trending Median Bollinger Band.

TIPS ON THE STRATEGY

● Because we are using the strategy to trade a Breakout after Market’s Consolidation, our
primary goal is to KEEP as many pips as possible, FAST. We can always re-enter if this
is going to be a long-term move but there is no point in staying in for endless hours or
days as soon as volatility zeroes down again. And because this is what happens in the
majority of the Breakouts that follow Consolidation, it makes no point looking for a
Take-Profit Target Placement. But if you are a Conservative Trader, having my respect
for that, here is a trick you can use in case you are going to trade “BOTTLENECKS &
FUNNELS” from H1 TF and higher. As soon as it starts and you are in, go to DAILY
Time-Frame and see which is the next Bollinger Band price is heading to. Estimate
roughly the distance from your entry to the Bollinger Band and place your TP Target at
the ¾ of it. A more sophisticated TP Target placement method is again from DAILY
Time-Frame using Bollinger Bands and Stochastics. If the Breakout is a bullish one and
price in moving at the Lower Bollinger Band, we place a vertical Line on the candlestick
which corresponds to Stochastics Bullish Crossover and the point where this vertical live
crosses Median Bollinger Band is our Take-Profit Target level. Of course we may shift it
a few pips lower if we see possible strong resistance levels there such as the body of a
KUMO.
● Keep in mind that whenever you see a long narrow BOTTLENECK on a relatively small
Time-Frame like M15, you should ALWAYS look for a BOTTLENECK one or more
Time-Frames higher and disregard the small Time-Frame. Why? Because it may be
misleading. I can’t stress enough how important it is to trade the B&F Pattern from the
HIGHEST POSSIBLE TF!!! Even if you have to WAIT for hours. I guarantee you’ll be
rewarded either with a truly big move or avoiding a Fake Breakout.
● When you see “TURNING POINT” Pattern on DAILY Time-Frame, look for a B&F
Pattern on H4 Time-Frame getting ready to be positioned for a Breakout to the Direction
of the Turning Point and NOT to the opposite direction even if a FUNNEL opens to that
direction. In most cases it is a FAKE FUNNEL followed by a BELL to the direction of
the DAILY Time-Frame TURNING POINT.
Chapter 38: What’s the best Strategy?

This is a question I get very often, especially from beginners. The answer is simple. When you’re
starting out, it is impossible to feel comfortable and confident with all Market’s Conditions and
all strategies. So I suggest you focus on ONE Market’s Condition or ONE Time-Frame or ONE
Strategy only at the beginning.

In case you focus on one Market’s Condition, -for example Consolidation - and practice trading
the Breakouts when you see “BOTTLENECK & FUNNEL” Patterns you’ll make great progress
which will boost your confidence and bring you one step further with your trading.

Or you may choose to learn ONE Strategy very well, such as ICHIMOKU 4 Time-Frames
Strategy and expand your trading “preferences” practicing one more, probably on a different
Market’s Condition with time.
Alternatively, you may pick DAILY Time-Frame only, for at least six months till you feel
confident enough to start trading from smaller Time-Frames. You can use the Bollinger Bands
and Stochastics Strategy to trade from Daily.

After all, the best Strategy is the one you feel most confident using.

Chapter 39 : Currencies Strength Ranking and Currency Pairs Correlations

The Financial Instruments we’re trading in FOREX are currency pairs and the price we actually
speculate upon is their rate. There are two kinds of rankings that help us trade the pairs having a
sort of “edge” compared to other traders :

1. Their Strength Ranking

Secret?! What is the secret to making a lot of money

in forex?
- First it is to identify the currency that has the
biggest chance to appreciate.
- Second it is to identify the currency that has the
biggest chance to depreciate.
- Third is to match those two.
ForexPeaceArmy.com

You can use the FOREX Relative Currency

Strength Calculator online at ForexPeaceArmy.com
which can give you valuable estimates about pairs’
rankings within the Time-Period you select.

2. Their Mathematical Correlation

Let’s say that we have EURUSD going up which means that right now, EUR is stronger than
USD.

This fact gives us the useful conclusion that EURJPY will go UP compared to USDJPY which
should go down.
There are two pairs, both Commodity Pairs, which are MIRROR-OPPOSITE to each other and
they are AUDUSD and USDCAD. Below view their Weekly Time Frames.
AUD is a commodity currency related to Gold, while CAD is a commodity currency related to
Oil. When USD gets stronger, they both fall and when it gets weaker, they rise.

Then, I have noticed that AUD and JPY move in a parallel fashion. So when I see AUDUSD
going up, I expect to see JPY pairs fall.
A simple but powerful fact to always keep in mind is that USD being the Denominator of many
Currency Pairs or the Numerator of others, can lead us to logical assumptions about a pair’s
moves depending on its strength.
When USD goes UP, Currency Pairs that have it as their Denominator, FALL : EURUSD,
AUDUSD, GBPUSD, NZDUSD etc At the same time, Currency Pairs that have USD as their
Numerator, RISE : USDCAD, USDJPY, USDCHF etc

There are many observations that can help you get a better feeling of currencies strength
correlations, leading you to better trading decisions.

Chapter 40 : Trader’s Choices and Trading Styles

Till recently, I thought that there were different Trading Styles mainly based on a Trader’s skills
and temperament but I was wrong. It’s not about “style” it’s about “attitude” and the variables
are at least four as you can see on the following table.

In fact, there is a logical sequence in your Progress and you should rather start Trend-following
for a couple of years before you go Swing-Trading for another couple of years till you upgrade
your trading to Scalping.
But there is a tool called SMARTPHONE, which acts as the absolute Equalizer in terms of Time
Availability at least to the degree of how often you can check or monitor your trade. There truly
is a Hybrid Category of Traders who should be called SMARTPHONE TRADERS. My opinion
is, you should start from the Category that best suits you now and postpone your wild
Smartphone Trading Dreams for a later phase in your life when you’ll be absolutely flexible with
your time-schedule.

Going to the toilet only in order to check your losing position with your Smartphone, or throwing
sneaky glances at your Smartphone’s charts while in the middle of a meeting, does not do you
any good regarding your job or business and your health. It is a catastrophic habit with corrosive
effect on your trading too.

I’m a big proponent of doing things right from the beginning at the proper pace and at the right
time-sequence. Scaling up, leveraging and accelerating will come on its own as a result of your
progress if you stick to your Trading Plan and your Daily Pips Routine religiously.

○ Daily Time-Frame Trader

Being a Daily TF Trader, means you have not much time to monitor your trades. Checking a
couple of times per day is the optimum tracking frequency for you. Furthermore, you go for big
moves but you are willing -or forced - to be extremely patient letting the price fluctuate within its
vital zone till it hits your Take Profit Target.

You are aware of the Turning Point Pattern caused by Sharks when they face limited Liquidity
issues and can’t fill their orders closing winning positions. So you avoid entering trades when
the previous move is bigger than 300-330 pips.

You hate placing your Stop-Loss too far away from your Entry, but you know that this way you
practically maximize your profitability potential, minimizing the risk of having your SL hit by
manipulation Spikes.

You prefer being conservative about your Take-Profit Target Placement going from one
Bollinger Band to the next, aiming to get your reasonable share of profits within a few trading
days, rather than chasing huge moves that may trap you in the trade for weeks.

Remember that for us humans, willpower is a resource that comes extremely limited. For that
reason, it is imperative to not depend your trading on your willpower. Therefore, you have to
automate the whole trading process, making it part of your daily routine, so you don’t have to
think and decide about it every day.
 ○ 7 Steps Checklist Trader
We’ll discuss the 7 Steps Checklist in following chapters but I had to make a reference here, to
the specific Trading Attitude that is based on it.

The 7 Steps Checklist Trader, may be a total Beginner with a MICRO Account of a couple of
hundred Dollars, extremely low Risk Tolerance and non-Existent Confidence.

Having this profile as a Trader doesn’t mean that you can’t turn your $200 into $1Million in less
than two years. On the contrary, being the smart person you are, you can transform your
resources disadvantage into a learning advantage because my FXHOLIC System -the Equation,
the Trading Plan and the Strategies- shows you how to become a KILLER Trader by adopting a
Fail-Proof 7 Steps Routine till it becomes a second nature to you.

That’s why you should NEVER compare yourself to any other trader. You are unique in terms of
abilities and potential. The only person who can put obstacles and limitations to you is yourself.
But you’re not going to do that. Are you?
I designed FXHOLIC Program and FXholic’s BUDDY exclusively for the Total Beginner and I
take pride at my work towards helping you discover your super powers as a person and as a
trader, achieving the financial status you’re dreaming of and re-designing your life the way you
want and deserve it.

7 Steps Checklist is the absolute GUIDE to everything that is being presented here, helping you
set your Trading Plan, adjust the FXHOLIC’s Equation to your own specific resources and
needs, pick a pair with cheap margin and a nice return potential, evaluate Market’s Condition,
pick Time-Frame where you’ll trade from as well as Strategy, estimate the Risk and the Reward
of the trade deciding if it is worth taking, pinpoint your Entry, have your Stop Loss placement
and Trailing Criteria handy, place your Take Profit Target with confidence and knowing exactly
which are your Stay In/Exit Criteria. It’s not a bad idea using 7 Steps Checklist till you make
your 1st Million USD. After having doubled your initial baby capital of $100 fourteen times or
after having doubled your initial $1000 ten times, the basic rules and criteria of the RICHEST
GAME IN THE WORLD, will have been rooted in your subconscious mind and Trading will
feel like a natural reflex of your brain’s “muscle”.

○ BUY/SELL Scenarios Trader

The BUY/SELL Scenarios Trading Attitude can literally keep you out of trouble leading to great
trades in most of the cases, if you choose to abide by its rules. The Scenarios Trader is actually a
bit “lazy” to go through detailed and deep analyses on pair’s higher Time Frames such as
Monthly, Weekly or even Daily.

This type of Trader, prefers to trade from H4 or H1 Time Frames, looking to BUY after big
Downward Moves or to Sell after big Upward Rallies or looking to jump in a strong trend after a
Correction “Catching the Bus” at the “Bus Stop”.

The Scenarios Trader, has BOTH BUY and SELL Scenarios planned and marked on the Chart.
Looking to Enter early when price changes direction with Indicators confirming the statistical
significance of the change and increasing momentum, Scenarios Trader makes sure the Entry,
Stop Loss and Take Profit Target Placement are estimated way ahead, no matter whether the
price decides to go UP or DOWN, giving her/him the edge and a sense of absolute confidence
over the trade. The Stay in/EXIT and Stop Loss Trailing Criteria are also crystal clear, so the
only thing for the Trader to do is WAIT for one of the two Scenarios to be triggered. It may take
7, 8 or even 15 H4 Candlesticks for one of the Scenarios to be activated, corresponding to days
of Trader’s inactivity, staying out and just waiting, but that doesn’t make any point of concern to
the Scenarios Trader, because in most of the cases, after a big waiting phase comes a wildly
profitable trade.
When you are a Scenarios Trader, you use the Mathematics Power of Symmetry to your favor.
You’re not going to Enter at the earliest point of a price action directional change but at the point
of the highest statistical significance about price really intending to change direction where all
your Technical Analysis Tools are in Confluence telling you so. You don’t care if waiting for the
6th Entry Criterion to be met you’re “losing” 20 pips. You focus on entering with 1000%
certainty rather than catching the exact beginning of the move.

Scenarios Trader focuses on Main Moves and their Continuations, ignoring Minor Corrections.

That’s why a Scenarios Trader is looking for a proper “KNEE” formed by the Median Bollinger
Band instead of paying attention to candlestick patterns and Stochastics Crossovers on Upper or
Lower Bollinger Bands.

A Trend-Follower is pretty much a BUY/SELL SCENARIOS Trader and may as well be an

ICHIMOKU Trader.
 ○ Correction Profile Trader

The Trader who likes to trade from the pair’s Correction Profile Time-Frame, is actually a
Bollinger Bands Trader.
Correction Profile Trader may behave as a Scalper - taking Short Term Trades- or as a Long
Term Trader riding the trend for as long as the Market wants to sustain it.

The basic concept of Correction Profile Trading is that if the pair is making frequent statistical
validation moves to the Median Bollinger Band on its way UP or on its way DOWN, from a
Time Frame as small as M30, we trade ONLY the Continuation Moves. If the Correction Profile
Time-Frame is higher than H1 TF, we trade the Continuation moves from Correction Time-
Frame and Correction Moves from M15 Time-Frame.

When Trading the Corrections, we ALWAYS set the Take Profit Target at the Median Bollinger
Band of the Correction Time-Frame. When Trading the Continuation, we may want to go for a
nice SCALP of as many pips as the ¾ of the previous Continuation Move or we may be more
ambitious -depending on the pair’s picture we see on Monthly, Weekly and Daily Time Frames-
going for the next Bollinger Band on Daily or even Weekly Time Frames basically
“FOLLOWING THE BONE” which means following Median Bollinger Band on Correction
Time Frame as it slopes clearly to the direction of the main trend and exiting when it turns Flat.
 ○ Scalper
-What is SCALPING?
-”Scalping” is a term broadly used in trading to describe the Trading Style which is about taking
brief trades going for a few pips on each one.

The Scalper doesn’t care about Market’s intentions and main trends. Is only after a certain
amount of pips. Once profits are locked, Scalper jumps out without being concerned about
money left on the table.

I know that “Scalping” is very popular among new Traders, mainly because it stimulates the
imagination with incredible achievements of the fast and furious young multimillionaires traders
who like to call themselves Scalpers. This trading attitude has a lot of advantages but also
hidden traps for those who are unaware of the inner mechanics and the psychological substratum
of Aggressive Trading. Below I’ll try to highlight its main parameters.

· In terms of Profits pursued, Scalping is the epitome of frugality. Scalps can be

marginally above Broker’s Spread up to 20pips with 40pips being more in the sphere of
conventional trading rather than Scalping. Going for 10-20pips per day is also FXholic
System’s Golden Rule, but if you break it once, making 30 or 40 pips in less than 30
minutes, you get addicted to higher expectations and that makes your discipline gradually
weaker, till you no longer follow the strict rules of Scalping.
· In terms of Time availed, Scalping requires a brief but intense time-window and that
means you can’t properly Scalp through your Smartphone when you are supposed to be
“unavailable” for trading either because you are busy at work or at your own business.
You are doomed to fail at one of the two and in most cases you fail in both.
· In terms of Attention required, Scalping needs your undivided attention and being a
Multitasker -which actually is a self destructive pattern you should get rid of- doesn’t
make any difference in this case. You see Scalping uses pure Brain Energy in order to
give you great results. Unlike most low-risk/low-reward tasks, that require only your
physical presence, Scalping is about thinking and acting on steroids.
· In terms of Time-Frames preferred, M15, M5 and quite often even M1 are Scapers’
most favorite Time Frames. That’s why I suggest you go Scalping only after you have
successfully doubled your Capital 4 times.
· In terms of Trading Techniques applied, it is essential to Enter with momentum and
exit fast using the most sensitive Indicators’ signals.
PART 5 : The Road (Reward Assessment - Risk Management)

So far we have made our plan knowing that a handful of pips per day or accumulative per week
or month, are more than enough to reach any goal, any time. We have familiarized ourselves
with candlesticks and Indicators. And now it’s time for action. We have to open the charts and
go for the real thing. Isn’t that exciting?

Chapter 41: Price Action CYCLES and VECTORS

Bollinger Bands are a fantastic tool that helps us estimate roughly the width of the range within
which the price is moving because the 3 Bollinger Bands are PRICE ACTION CONTAINERS
with the Upper and the Lower defining the extreme boundaries or price action at a given time
point.

Price action has a cyclical “structure” which is defined by the Bollinger Bands on each Time-
Frame and expands on higher Time-Frames,
There are the following types of Price Action Cycles -which we’ll call VECTORS- we may
observe on every Time-Frame starting from Monthly and going down to Weekly, Daily, H4, H1
etc but it is quite practical to use the DAILY as our Time-Frame of reference:

1. Price moving from the Lower Bollinger Band to the Median (LBB-MBB Vector) and
then from the Median Bollinger Band all the way Up to the Upper Bollinger Band
(MBB-UBB Vector)
2. Price moving from the Lower Bollinger Band to the Median (LBB-MBB Vector) and
then back to the Lower Bollinger Band (MBB-LBB Vector)
3. Price Moving from the Upper Bollinger Band to the Median (UBB-MBB Vector) and
then from the Median Bollinger Band all the way Down to the Lower Bollinger Band
(MBB-LBB Vector)
4. Price Moving from the Upper Bollinger Band to the Median (UBB -MBB Vector) and
then back to the Upper Bollinger Band (MBB - UBB Vector)

Because the distance between Lower Bollinger Band and Upper Bollinger Band makes a full
RANGE, I’d like to call the LBB - MBB (Lower Bollinger Band to Median Bollinger Band), the
MBB - LBB (Median Bollinger Band to Lower Bollinger Band), the UBB -MBB (Upper
Bollinger Band to Median Bollinger Band) and the MBB - LBB (Median Bollinger Band to
Lower Bollinger Band) moves VECTORS, each Vector representing price’s move within HALF
RANGE having a specific direction.
A Vector starts from one Bollinger Band and ends to the next having a clear direction.

It is VALID, when the Upper/Lower Bollinger Bands Edges’ Correlation Pattern confirms its
direction, and price has moved covering at least 25% of its length to this direction.

Vectors help us draw Colored Shapes on our Charts determining the Bullish or Bearish Price
Action Dynamic Zones.

It is important to draw an UPward Shape towards the End of a Specific Time-Frame’s UPward
Vector starting from a Bullish Candlestick and ending to the Median or Upper Bollinger Band or
conversely to draw a DOWNward Shape towards the End of a Specific Time-Frame’s
DOWNward Vector starting from a Bearish Candlestick and ending to the Median or Lower
Bollinger Band.
Chapter 42 : Estimating Reward
The easiest way to make the reward assessment, is when price is moving after the first quarter of
a VECTOR.
Let’s see some examples below.
If the price on Daily Time Frame is moving on one of the extreme Bollinger Bands, Upper or
Lower, we check the Correlation Pattern of the Edges of the Upper/Lower Bollinger Bands to see
if the price wants to continue moving to the same direction or to reverse.

If there is a Reversal Upper/Lower Bollinger Bands Edges Correlation Pattern, confirmed by

Stochastics and Fractal, it means we can WAIT for the 25% of the Vector to be valid till we
make our Reward Assessment for the remaining move to the Median Bollinger Band.

If there is a Continuation Upper/Lower Bollinger Bands Edges Correlation Pattern, we check the
Vector on the Weekly and make our assessment based on the remaining part of the move on
Weekly.
● Spike UP -Spike DOWN : The Law of Symmetry
An observation I have made, which helps me a lot with Reward Assessment, is the fact that price
seems to move in a symmetrical fashion regarding the Upper and Lower Bollinger Bands
“borders” when Spikes are formed.

You’ll notice that on any Time Frame, when an UP Spike appears above the Upper Bollinger
Band, price will make sure it negates it with an equal pips-value DOWN Spike below the Lower
Bollinger Band before continuing higher and vice versa.

I like to call this phenomenon “Spike UP -Spike DOWN” , it happens on all Time Frames and
it’s extremely useful when estimating Reward from Daily Time-Frame or higher using Vectors,
because those extra pips of the expected Spikes can make a big difference.

“Spike UP -Spike DOWN” can also be used as a guidance tool when we have missed a strong
move and want to trade the move to the opposite direction following Munehisha Homma’s
advice :)
Chapter 43 : Picking Trade
Probably the most important decision to make before taking a trade, is whether it is worth taking
the trade or not.

Again, having Criteria makes you stand out from the crowd of “gamblers” in the Capital Markets
arena.

Having made the Reward Assessment using the Vectors on Daily Time Frame, now you know
how many pips move you should expect and to which direction. The next step is to see if the
following three basic Criteria are ALL met. If they’re met, you can take the trade. If not, you
drop it.

a : Risk/Reward Ratio
When we are trading, by default we acknowledge that the instrument we “bet” on is in a constant
fluctuation state, therefore the RISK OF LOSING MONEY IS HIGH AND PREVALENT.
When we are about to take a trade after having made the Reward Assessment, our top priority is
to determine if the Risk associated with the potential Trade, is a Risk we can take with high
possibility to turn the odds to our favor and eventually eliminate and avoid it altogether. Profits
is our second though after we have made sure that we pre-calculated Risk and are in total control
of it.

After using the FXHOLIC Equation, we have already determined the Risk we can take per trade
and it is no more than 3% of our Account’s Equity which means, if we trade a Mini Account
with $1000 Equity (Trading Capital), on the condition our Account’s Leverage does not exceed
100:1, each mini pip equals $1 therefore if the maximum Risk we can take is $30 (3% of our
Account’s Equity), it equals 30 mini pips and that leads us to the conclusion that our RISK can’t
be higher than 30pips.

For a trade to be worth taking, the RISK/REWARD Ratio should be 1:2 MAXIMUM. That
means we want to take trades where the Reward is at least Double our Risk.

In the case of the $1000 mini account’s example, since our RISK can’t exceed 30pips,
REWARD should be 60pips or higher. In any other case, we drop the trade.

b : Daily Pips/Reward Ratio

The second Criterion which will determine if we’re going to take a trade or not, is the Daily
Pips/Reward Ratio. It is of essential importance to pick trades where the Reward is at least 3-4
times as much as our Daily Pips Target. And the GOLDEN IDEAL for Daily Pips Target is
20pips, although you can set this target to any number of pips that reflects your trading ability
and suits your Trading Plan.

So if we use the previous example of a $1000 Mini Account and if our Daily Pips Target is
20pips, the Reward should be at least 60-80pips in order to decide to take the trade. Otherwise,
we should drop it.

c : Trade Management Availability

There will be many cases of trades where minimum time availability and input in terms of
monitoring will be required, such as “Set It and Forget It” type of Trades where you’ll only have
to make a proper study before your Entry and when your Entry Criteria are met, it will only take
you a few minutes to set your Entry, Stop-Loss and Take-Profit Target Orders and then leave the
Trade alone. But after the Reward Assessment, you may see that the Entry Criteria might be
met after a certain amount of time and at the time you should be absolutely available to pinpoint
your Entry , you just can’t be. Or there may be a type of quick profits trade which may require
your constant monitoring for about two hours non stop and you can’t be there to do it.

FOREX Trading is the culmination of skills coordination being a totally mental activity and a
high maintenance “game”.
The reality traps, inconveniences and occurrences may cost you dearly if you have not factored
them upfront to your set of Criteria.

PART 6 : Driving the Car ( Trade Management)

Chapter 44 : Picking Time-Frame
So far we have set our Trading Plan using FXHOLIC’s Equation, determined our RISK , DAILY
PIPS TARGET and we also know our D, the number of Trading Days we need to DOUBLE our
Account’s Equity having also set our milestones on our Calendar.

Right now, we have already made the Reward Assessment using Vectors and we checked with
our Criteria whether the Reward is at least Double our Risk and Triple our Daily Pips Target in
order to take the Trade and we decided it’s worth taking.

Next, we’ll go to the Charts and look for the best Time-Frame to take the Trade from.

Once we have made the Reward Assessment, it is extremely helpful to draw a Shape, -using
METATRADER’s tool- with a color we’ll choose to symbolize the direction of the move we
expect to trade, so that we have a Visual Guide on our Chart.

Then, -unless we decide to take the Trade from Daily Time Frame- we go down to smaller
Time-Frames looking for a Low-Risk Entry to the highest possible Time-Frame with ALL Entry
Criteria met, setting our Take Profit Target at the ¾ of the Reward we have assessed and have
drawn the colored shape on.
Chapter 45 : FOCUS on ONE Thing at a time

“ We are unprepared in part because, for the first time, the preponderance of
choice has overwhelmed our ability to manage it. We have lost our ability to filter
what is important and what isn’t. Psychologists call this “decision fatigue”: the
more choices we are forced to make, the more the quality of our decisions
deteriorates.
TOO MUCH SOCIAL PRESSURE
It is not just the number of choices that has increased exponentially, it is also the
strength and number of outside influences on our decisions that has increased.
While much has been said and written about how hyperconnected we now are and
how distracting this information overload can be, the larger issue is how our
connectedness has increased the strength of social pressure. Today, technology
has lowered the barrier for others to share their opinion about what we should be
focusing on. It is not just information overload; it is opinion overload.”
Greg McKeown, “Essentialism: The Disciplined Pursuit of Less”

Information overload or opinion overload as Greg McKeown puts it, have already
conditioned us on a subliminal level, so that distraction and confusion constantly make us
lose focus and feel overwhelmed about the plethora of options we’re exposed to.

Trading is no exception. So you definitely have to control your multitasking or

“Market’s Tourist” attitude in order to avoid devastating losses.

Staying FOCUSED as a Trader is essential to your survival and to your success.

Before we discuss the ENTRY, SL Placement/Trailing, TP Placement, Stay In/EXIT

Criteria, I’d like to remind you the following :

1. Trade ONLY ONE PAIR at a time.

2. Respect your Trading Plan, your RISK Management Rules, your DAILY Pips
Target and your Time Availability.
3. Make your Reward Assessment carefully without rush.
4. Pick the Time-Frame that meets your requirements.
5. Lay down if possible BOTH BUY and SELL Scenarios with all their Criteria and
Rules so you avoid getting caught into the psychological trap of your personal
biases.
6. WAIT for ALL your Criteria to be met before you Enter.
7. BEFORE you Enter, Focus on ONE BY ONE of the missing Criteria till ALL are
met.
 8. ONCE IN THE TRADE, if it is a “Set It and Forget It” type of Trade where you
have done your study thoroughly and placed an Entry, a Stop Loss and a Take
Profit Target Order, leave it alone and don’t be tempted to mess up with it.
9. ONCE IN THE TRADE, if it needs to be monitored, monitor it from the Set Up
Time Frame, checking it every time a candlestick has closed. For instance, if your
Set Up Time-Frame is H1, you should check the trade every time an H1
Candlestick closes.
10. Monitoring an open trade is not a vague process. You should Focus on the Stay
In/Exit/SL Trailing Criteria when each Candlestick closes. Are they met?

Chapter 46 : Entry Criteria & the Tools of my Choice

When I had my very first acquaintance with FOREX Trading, the thought spinning again and
again in my mind was “If I only knew when to Enter and when to Exit, I’d become the richest
woman in the world!”

It seemed so simple but most of the Systems I read books or viewed Videos about, lacked
consistency. Increased my confusion, instead of making things clearer for me.

So I decided to observe, study and experiment on my own using a simple thinking pattern based
on logical assumptions such as :

1. To make profits, we must trade a move which has a clear trend

2. We have to catch the move early
3. To catch it early, we must ENTER at the “turning point” of a correction or reversal to a
new direction
4. We need to know that the previous move has stopped
5. We need to know that the move we’re going to trade is :
● young : which means it has just changed direction
● strong : which means that momentum to the new direction is increasing
6. We must enter with momentum
7. We must enter with confluence of signals (get as many confirmations as possible that
price is now changing direction with true conviction and increasing momentum)

My limited knowledge on candlesticks -which I keep building upon on a continuing basis-

pushed me to seek the Tool or Combination of Tools that could give me statistically significant,
precise and reliable indications/signals answering my 7 Questions regarding my Entry.

Below please find how Technical Analysis Tools are giving us valuable Signals regarding each
one of the 7 Questions before we Enter. My favorite set of Tools includes ICHIMOKU KINKO
HYO, Bollinger Bands, Fractals (Bill Williams Indicator) and Stochastics. These tools are
featured in bold fonts below.

1. To make profits, we must trade a move which has a clear trend

➢ ICHIMOKU helps us see a clear trend depending on price being above or below
the KUMO and the order of its Lines.
➢ Bollinger Bands help us make sure that there is an Uptrend when Price is moving
above the Median Bollinger Band and Median Bollinger Band is sloping UPwards
or that there is a Downtrend when Price is moving below the Median Bollinger
Band and Median Bollinger Band is sloping DOWNwards.
➢ Up Fractal at the top of an UPward Move tells us that price will not go higher for
now and a DOWNward move is starting while Down Fractal at the bottom of a
DOWNward Move tells us that price will not fall lower for now and an UPward
Move is starting
➢ Stochastics, when making a Bearish Crossover above the 80-Level Line after
price has made an UPward Move, tell us that a DOWNward Move is starting and
they tell us the opposite when they make a Bullish Crossover below 20-Level
Line after price has made a DOWNward Move.
➢ PARABOLIC SAR (PSAR) is giving us the first Bullish Dot below a Bullish
Candlestick when price changes direction after a fall and starts going UP, while it
is giving us the first Bearish Dot above a Bearish Candlestick when price changes
direction after an upward move and starts going DOWN.
➢ MACD Signal Line pops out of a Bullish Histogram after price has been going
UP, signaling the beginning of a DOWNward Move, while it pops out of a
Bearish Histogram after price has been FALLING, signaling the beginning of an
UPward Move.
➢ FIBONACCI give us a BUY Signal after price has retraced inside the 38.2-61.8
Ratios Zone, and a whole bullish candlestick closes above the 75.0 Ratio, while
they give us a SELL Signal when a whole bearish candlestick closes below 23.6
Ratio.
➢ ADX tells us that price wants to change direction when it forms a “KNEE” after a
strong UPward or DOWNward move. ADX Directional Indices tell us that price
which was FALLING wants to go UP when they make a Bullish Crossover and
they tell us that price which was going UP wants to go DOWN when they make a
Bearish Crossover.
➢ Trend-Lines tell us that price wants to change direction when they’re broken by a
big body candlestick after a big move.
➢ RSI tells us that price wants to change direction when it crosses above or below
the 50 level.
2. We have to catch the move early
➢ ICHIMOKU gives us its earliest Signal when a candlestick closes above or
below Tenkan Sen, the Red Line of ICHIMOKU KINKO HYO System that
represents the first level of Resistance when price is falling and the first level of
Support when price is going up. Seeing this Signal on the Time-Frame we are
looking to Enter from, confirmed by a strong KUMO Breakout on M5 Time-
Frame validated by Chikou Span, triggers a statistically safe early Entry to the
direction of a fresh move.
➢ For the Bollinger Bands System, early sign of price’s change of direction is
indicated by the Median Bollinger Band forming a “knee” towards the new
direction.
➢ Fractals give early signals of price change of direction in conjunction with
Bollinger Bands. So an UP Fractal on the Upper Bollinger Band is an early sign
that price wants to fall after an upward move. When the Up Fractal appears above
the Median Bollinger Band, it’s an early sign that price finished its upward -
apparently corrective- move to the Median Bollinger Band and wants to continue
its fall. Conversely, a DOWN Fractal on the Lower Bollinger Band is an early
sign that price wants to go up after a downward move. When the Down Fractal
appears below the Median Bollinger Band, it’s an early sign that price finished its
downward - apparently corrective- move to the Median Bollinger Band and wants
to continue going up.
➢ Stochastics give their statistically significant Signals in two steps that -according
to my observations - carry 50% of validity each : a) their bullish or bearish
crossover b) their cross above 20-level line after the bullish crossover, or their
cross below the 80-level line after a bearish crossover. The early sign we get is
the first 50% of Stochastics Signals. So when we see Stochastics making a
Bullish Crossover below 20 -level line, we get an early sign that price wants to
start going up after a big fall and when we see Stochastics making a Bearish
Crossover above 80-level line, we get an early sign that price wants to start falling
after a big upward move.
➢ PARABOLIC SAR (PSAR) gives an early sign of price’s change of direction
with the appearance of the first DOT below a Bullish Candlestick or above a
Bearish Candlestick. And since we’re looking for an early sign that price wants to
change direction, seeing the FIRST PSAR DOT on the lower Time-Frame than
the one we intend to take the trade from, making sure that there is a relatively big
distance between the DOT and the price, is an excellent precursor to seeing the
sign on the higher Time-Frame as well.
➢ Seeing MACD Signal Line popping out of the Bearish or Bullish Histogram, one
Time-Frame lower than the one we’re monitoring looking to take the Trade from,
makes it an even earlier sign of price’s intentions to change direction.
 ➢ FIBONACCI gives us an even earlier sign of price’s intentions towards changing
direction if we switch to the next lower Time- Frame looking either for the whole
body of a bullish candlestick being above 75.0 Ratio -after price has retraced
inside the 38.2-61.8 Ratios Zone- or being below the 23.6 Ratio.
➢ ADX gives an early sign of price’s change of direction when the two DI’s are
converging on the Time-Frame we want to enter from or when we see ADX
forming a “knee” on the next lower Time-Frame.
➢ Trend-Lines that are broken by a big-body candlestick on the next lower Time-
Frame of the one we’re considering taking the trade from, give us an even earlier
sign that price wants to change direction.
➢ RSI also gives an earlier sign of potential change of price’s direction on the Time-
Frame we’re looking to Enter from, if we notice RSI crossing below or above 50
level on the next lower Time-Frame.

3. To catch it early, we must ENTER at the “turning point” of a correction or reversal to a

new direction
➢ ICHIMOKU gives us a high statistical significance early sign of price being at a
“turning point” with a true intention to change direction when :
○ A bullish candlestick closes above BOTH Tenkan Sen and Kijun Sen or a
bearish candlestick closes below BOTH Tenkan Sen and Kijun Sen.
○ Tenkan Sen is sloping UP after a bullish candlestick has closed above it or
it’s sloping DOWN after a bearish candlestick has closed below it.
○ Chikou Span -ICHIMOKU Green Line which is current price action clone
shifted in the past- has crossed above past price going straight UP or
below past price going straight DOWN.
○ Leading KUMO showing decreasing Bearish Momentum and increasing
Bullish Momentum in case price wants to go UP, or decreasing Bullish
Momentum and increasing Bearish Momentum in case price wants to go
down. If price wants to go up and leading KUMO is Bullish, we want to
see its Upper Edge being sharp pointing Upwards and its Lower Edge
being sloping or curved Upwards, if price wants to go up and leading
KUMO is Bearish, we want to see its Upper and Lower Edges converging,
usually a process starting by the Lower Edge being curved upwards and
eventually seeing the leading Bearish KUMO getting thinner, followed by
a Bullish Senkou Span A/B Cross giving birth to a Bullish KUMO. If
price wants to go down and leading KUMO is Bearish, we want to see its
Lower Edge being sharp pointing Downwards and its Upper Edge being
sloping or curved Downwards, if price wants to go down and leading
KUMO is Bullish, we want to see its Upper and Lower Edges converging,
usually a process starting by the Upper Edge being curved downwards and
 eventually seeing the leading Bullish KUMO getting thinner, followed by
a Bearish Senkou Span A/B Cross giving birth to a Bearish KUMO.
➢ Bollinger Bands give us Correction “Turning Point” signs when Median
Bollinger Band keeps going to the same direction but the Upper and Lower
Bollinger Bands Edges give Correlation Patterns to the opposite direction. And
we get Reversal “Turning Point” signs when Median Bollinger Band turns
forming a “knee” and Upper/Lower Bollinger Bands edges show correlation
patterns that confirm the new direction move either being a Funnel , Bell or a
Parallel correlation to the same direction as Median Bollinger Band.
➢ Fractals indicate “turning point” when more than one are present at the same
price level.
➢ Stochastics signal a “turning point” of price action when they both cross above
20-level line after a bullish crossover or below 80-level line after a bearish
crossover.
➢ PARABOLIC SAR (PSAR) signals “turning point” when the last Dots to the
previous direction when sloping steeply having a proper distance between each
other and the First Dot to the new direction has a big distance from the
candlestick.
➢ MACD signals a “turning point” when the vertical line of the Histogram at the
point where Signal Line pops out is significantly smaller than the previous one.
➢ ADX signals “turning point” when it is above 27 level and DI’s Convergence
happens with one of the two being at 27 level or above it.

4. We need to know that the previous move has stopped

➢ ICHIMOKU tells us that previous move has stopped at least for now, with its
line I like to call “BRAKE” when it turns flat and that is Kijun Sen, ICHIMOKU
Blue Line. Kijun Sen turning horizontal -flat- means that the price stopped
moving to the previous direction for now and will either move sideways before
continuing to the same direction or will move sideways and then change direction.
➢ Bollinger Bands signal previous move’s stop by the Correlation Patterns of
Upper/Lower Bollinger Bands Edges. In general when the two edges are not
parallel or turned outwards, that means volatility to the previous direction is
decreasing. When one of the two is horizontal or curved or they are converging,
previous move has stopped.
➢ FIBONACCI Retracement Tool helps us see if the previous move has stopped
and price won’t fall lower or won’t go higher, if applying them from the top to the
bottom of the last move, 50.0 FIB Ratio coincides with ICHIMOKU Kijun Sen
Plateau (Flat Level) and this incredibly valuable observation was shared by
Roberto Parisi, one of my FXHOLICS during our live Workshops.
5. We need to know that the move we’re going to trade is :
a. young : which means it has just changed direction
➢ ICHIMOKU tells us that a move is young when Kijun Sen has changed
direction.
➢ Bollinger Bands tell us that a move is young when Upper/Lower Bollinger Bands
Edges Correlation Patterns show change of price direction.
b. strong : which means that momentum to the new direction is increasing
➢ ICHIMOKU tells us that a move is strong when we have a fresh and valid
KUMO Breakout.
➢ Bollinger Bands tell us a move is strong when Median Bollinger Band has
formed a “knee” and Upper/Lower Bollinger Bands Edges are turned out forming
a Funnel.

6. We must enter with momentum

➢ ICHIMOKU helps us enter with Bullish momentum if a bullish candlestick has
closed above both Tenkan Sen and Kijun Sen with BOTH Lines sloping
UPwards, Chikou Span having crossed above past price action -ideally also above
past Tenkan Sen and past Kijun Sen- going Up and leading KUMO showing
Bullish Momentum increasing which means, if leading KUMO is Bullish, its
upper Edge should be sharp pointing Upwards and its lower Edge should be
curved/sloping Upwards and if leading KUMO is Bearish, its Upper and Lower
Borders should converge and this is a process usually starting by the lower edge
being curved upwards till the two borders, Senkou Span A and B make a Bullish
Crossover giving birth to a Bullish KUMO. It helps us enter with Bearish
momentum if a bearish candlestick has closed below both Tenkan Sen and Kijun
Sen with BOTH Lines sloping DOWNwards, Chikou Span having crossed below
past price action - ideally also below past Tenkan Sen and past Kijun Sen- going
Down and leading KUMO showing Bearish Momentum increasing which means,
if leading KUMO is Bearish, its lower Edge should be sharp pointing Downwards
and its upper Edge should be curved/sloping Downwards and if leading KUMO is
Bullish, its Upper and Lower Borders should converge and this is a process
usually starting by the upper edge being curved downwards till the two borders,
Senkou Span A and B make a Bearish Crossover giving birth to a Bearish
KUMO.
➢ Bollinger Bands reflect price’s volatility which is the result of increased
momentum to one or the other direction. We enter with increased momentum
when Upper and Lower Bollinger Bands’ Edges turn outwards forming a Funnel,
after a narrow Bottleneck.
 ➢ Fractals reflect increasing momentum when the next candlestick after the Down
Fractal has a big down spike or the next candlestick after the Up Fractal has a big
up spike.
➢ Stochastics show high momentum when the angle they form upwards or
downwards is steep and their position is almost vertical.
➢ MACD shows increasing momentum at the moment we enter -just after Signal
Line pops out of the Histogram- if the next Histogram line is clearly smaller than
the previous one. So if the Signal Line just popped out of a Bearish Histogram
and the next Histogram line is clearly smaller than the previous, we know this is
an excellent BUY Signal as Bullish Momentum is increasing because Bearish
Momentum is decreasing. If the Signal Line just popped out of a Bullish
Histogram and the next Histogram line is clearly smaller than the previous, this
gives us an excellent SELL Signal as Bearish Momentum is increasing because
Bullish Momentum is decreasing.
➢ When we use PARABOLIC SAR (PSAR), indicative of momentum are two of its
features :
○ the vertical distance between PSAR Dots and candlesticks : the bigger the
distance, the higher the Momentum.
○ the inclination of the Dots Line : the bigger the inclination, the higher the
Momentum.

7. We must enter with confluence of signals (get as many confirmations as possible that
price is now changing direction with true conviction and increasing momentum) .

I had received a message on one of my YouTube VIDEOS saying that my Charts are
cluttered because I’m using too many Indicators at the same time. Although the person
who sent me that message has a point, because ICHIMOKU KINKO HYO on its own is a
super efficient System to use along with candlesticks -if you are not knowledgeable
enough to rely on “naked charts” with candlesticks only- I consider confidence the most
important psychological booster for a trader and having my Systems giving me multiple
confirmation at the same time before I make a trading decision, is essential to me at least
at my present stage of experience and trading ability. Perhaps, many years from now, I’ll
be using “naked charts” and will be laughing whenever thinking back of my humble
times when my charts were “cluttered”. Remember, that FOREX Trading is a Solo Sport
and if you prefer to look at it as a Game, that’s fine too, but in this Game you can either
make or lose money and there is nothing in between. So you set the rules towards
bending the odds to your favor and nobody else’s opinion matters when it comes to your
confidence and your money. Period.
My favorite set of Tools -as you have noticed by now if you have got any of my Signals-
includes ICHIMOKU, Bollinger Bands, Fractals and Stochastics. It doesn’t mean that
other tools are not great or that there aren’t other Sets of Tools equally great. The
Combinations are countless. And I believe that the Sets of Tools we choose to use have
something from our personality and our attitude towards Life and towards Trading.
Once you know what you’re looking for before ENTERING a Trade and by that I mean
the seven points I listed above, it doesn’t really make any difference which Tools and
how many you use looking for their Signals.

But you definitely have to formulate a set of ENTRY CRITERIA using the Statistically
Significant Signals you get from your favorite Tools and base your Entries
EXCLUSIVELY to those Entry Criteria on the condition they’re ALL met.

Below please find the ENTRY CRITERIA I formulated using my favorite Set of Tools
and you are very welcome to adopt them till you find yourself in position to pick your
favorite Set of Tools and formulate the ENTRY CRITERIA derived from them.

BUY CRITERIA
➢ A Bullish Candlestick closes above Tenkan Sen and ideally above Kijun Sen too.
➢ Tenkan Sen is sloping UPwards
➢ Kijun Sen ideally is sloping UPwards too
➢ Chikou Span has crossed above past price action - ideally above past Tenkan Sen
and past Kijun Sen- going straight UP
➢ The Edge of the Leading KUMO is showing Bullish Momentum increasing which
means, if leading KUMO is Bullish, its upper Edge should be sharp pointing
Upwards and its lower Edge should be curved/sloping Upwards and if leading
KUMO is Bearish, its Upper and Lower Borders should converge and this is a
process usually starting by the lower edge being curved upwards till the two
borders, Senkou Span A and B make a Bullish Crossover giving birth to a Bullish
KUMO.
➢ Strong Bullish KUMO Breakout on M5 Time-Frame, validated by Chikou Span
which has crossed above past price action and above past KUMO on M5 Time
Frame
➢ Price is either above Median Bollinger Band and Median Bollinger Band is
forming a “knee” curved UPwards with Upper/Lower Bollinger Bands Edges
turned outwards forming a FUNNEL or price is above the Lower Bollinger Band
and Upper/Lower Bollinger Bands Edges Correlation Pattern showing that
previous Downward move is over and price wants to go UP.
➢ There is a Valid Down Fractal below or at the Lower Bollinger Band or below
the Median Bollinger Band (Swing Low)
 ➢ Stochastics made a Bullish Crossover below the 20-level line then BOTH crossed
above it going straight UP

SELL CRITERIA
➢ A Bearish Candlestick closes below Tenkan Sen and ideally below Kijun Sen too.
➢ Tenkan Sen is sloping DOWNwards
➢ Kijun Sen ideally is sloping DOWNwards too
➢ Chikou Span has crossed below past price action - ideally below past Tenkan Sen
and past Kijun Sen- going straight DOWN
➢ The Edge of the Leading KUMO is showing Bearish Momentum increasing
which means, if leading KUMO is Bearish, its lower Edge should be sharp
pointing Downwards and its upper Edge should be curved/sloping Downwards
and if leading KUMO is Bullish, its Upper and Lower Borders should converge
and this is a process usually starting by the upper edge being curved downwards
till the two borders, Senkou Span A and B make a Bearish Crossover giving birth
to a Bearish KUMO.
➢ Strong Bearish KUMO Breakout on M5 Time-Frame, validated by Chikou Span
which has crossed below past price action and below past KUMO on M5 Time
Frame
➢ Price is either below Median Bollinger Band and Median Bollinger Band is
forming a “knee” curved DOWNwards with Upper/Lower Bollinger Bands Edges
turned outwards forming a FUNNEL or price is below the Upper Bollinger Band
and Upper/Lower Bollinger Bands Edges Correlation Pattern showing that
previous Upward move is over and price wants to go DOWN.
➢ There is a Valid Up Fractal above or at the Upper Bollinger Band or above the
Median Bollinger Band (Swing High)
➢ Stochastics made a Bearish Crossover above the 80-level line then BOTH crossed
below it going straight DOWN

Depending on Market’s Conditions, the Time-Frame we’re going to Enter from, and whether
we’ll be trading a Correction or the Continuation of the main trend, some of the Criteria may be
optional.

Chapter 47 : SL Placement & Flames

“Madam, there are a few things you need to know before you start trading” the young operator
who was my Account’s Manager since a few minutes ago when I opened a LIVE Account with
the new Broker and funded it with my 5000eur, was saying over the phone with a tone of
someone who is trying to hold you back while you’re heading at the edge of the cliff.

“I know what I need to know and I’m going to be fine” I replied to him abruptly feeling annoyed
by his unsolicited assistance. After all, who was he to tell me what to do and what not to do with
MY damn Account?

“Madam, there are certain types of Orders you can give and..”

“Just tell me which button I have to click on, to BUY the EURUSD…will you?” I was losing
my patience with this person.

“Madam, do you believe BUYING the EURUSD is a good idea?” he softly interrupted.

“Of course!” I replied. “I can sense where the pair wants to go. Don’t worry that I’m irrelevant
like possibly most of your clients. Let’s say that I’m just not like most of your clients.” I was
really in awe of myself! The authority tone of my voice and this electrified sequence of
statements must have knocked him out thinking that he probably had a genius on the other end of
the line…

“And what about your Stop Loss Madam?”

“What is that?”

“You have to place a Stop Loss Order to protect your Account in case the pair moves to the
opposite direction”

“Come on! Are you joking? I’ll be here all the time watching it and I’ll get out if I see anything
wrong happening. I don’t think I’ll use a Stop-Loss.” He was getting on my nerves.
Adrenaline rush had already smoke coming out of my ears, I had this unstoppable urge to jump
in and make money being the extremely smart individual I was, among an endless herd of idiots
and this operator was delaying me? I just had discovered another version of envy. He was
jealous of me, my account and most of all, of my potential.

“Just in case you decide to use a Stop-Loss order Madam, please make sure it is at least 20 pips
away from your Entry.”

He was using terminology unknown to me just to intimidate me and make me feel inferior
although it was obvious to me that he was extremely insecure and quite jealous of my status and
my confidence. For the next couple of minutes, I told him whatever he wanted to hear trying to
get rid of him and his kind services. And within the next couple of hours I lost all my 5000euros.

Today, I truly believe this person would have fairly been at the verge of bursting out into
paroxysms of laughter or shutting up his mouth as soon as he realized -and I believe that took
him less than a minute- that he had an arrogant, stupid and totally ignorant woman on the phone
who additionally had the self-destructive blindness of a serial gambler.

I wish I could apologize to that person for my rude attitude but mainly, I wish I could apologize
to myself at that time, for having been so superficial and impetuous. I wish I could guide myself
through the right attitude, philosophy and thinking process about trading. I can’t do that to my
old self, but I can definitely do that to you.

So, don’t be quick to reject my suggestions, the rules and the criteria I’m presenting to you. I’m
sure there are much better Systems than mine out there and probably you will develop the best of
all some day. But for now, you need a Blueprint, a Guide to follow. That’s what I’m giving
you here.

Trading is nothing but pure gambling unless you use Technical Analysis which helps you take
pre-calculated Risk, manage the Risk towards eliminating it and bending the odds to your favor.
And because this process must be a repeatable and scalable one, it can’t be executed unless you
have a Set of Criteria you follow religiously for everything you do from the moment you Enter a
Trade till the moment you Exit it.

Stop-Loss is about the Risk you are willing to take on a trade -which by the way should not
exceed 3% of your Account’s Equity- but it doesn’t mean you actually have to take it.

It is my opinion, that even when you are taking extremely low risk trades from very small Time-
Frames being actively there and monitoring with your finger on the mouse ready to close
position, or when you’re taking trades from a relatively high Time-Frame such as Daily, with
odds already looking good, being tempted to not place any Stop-Loss till the “Turning Point”
Pattern subsides, ALWAYS, ALWAYS ,ALWAYS place a Stop-Loss even for psychological
purposes.

I believe it is extremely important to be prepared for the worst case scenario before you Enter
and have a solid CONTINGENCY PLAN for it.

The worst case Scenario is simply about price moving against your position going to hit your
Stop-Loss.
CONTINGENCY PLAN should include immediate actions to be taken :

A. We let out SL hit :

a. either because we can’t take a bigger Risk trailing it further than Entry
b. either because we can’t monitor the trade and Trail SL or Hedge the Trade
c. either because we don’t know how to Hedge
d. or because we believe our initial Entry was to the wrong direction and a Big
opposite move is starting
B. We trail our SL further from Entry :
a. either because we believe we were very conservative during the SL Placement
and didn’t allow to price enough space to fluctuate freely
b. either because we were fast to Enter not having Waited for ALL our Entry
Criteria to be met and now we see that price wants to make a correction -or
complete a half progressed one- before going to the direction we expect it to go
c. or we decided we can or want to monitor the Trade from a higher Time-Frame
C. We Hedge position cancelling the SL :
a. either because we want to stop Account’s bleeding limiting it to the
predetermined Risk, till the price returns moving to the expected direction
b. or because we want profit trading to both directions using the predetermined Risk
as “neutral zone”

Except Contingency Plan C, the other two Plans entail losses therefore we have to study the
Stop-Loss placement and build a Set of SL Placement Criteria so robust, that we practically
minimize or even eliminate the possibility of such losses.

Price is a varying value which is in constant move. It’s like FIRE fueled by demand and supply.
Its flames although may have a specific main direction, can burn you if you get too close.
Your primary goal should be to place your Stop-Loss as far away from Price Action FLAMES as
possible choosing to only have your Take Profit Target touched by them.

The basic principle of Stop-Loss placement when we BUY is to pick a level where the
possibilities for the FLAMES to touch it are slim to none. Therefore when we BUY we look for
a strong Support Level to place our SL below it.

STOP-LOSS Placement Criteria when BUYING

● Using ICHIMOKU KINKO HYO we know that the very first level of Support below
price, is Tenkan Sen. But because it is a very sensitive line and we run the risk of getting
our SL easily hit especially on small Time Frames, we avoid using Tenkan Sen as a SL
Placement level.
○ Below Last Kijun Sen Plateau : Next Support Level, much stronger than Tenkan
Sen, is Kijun Sen and it makes the ideal SL Placement level of reference
especially if we pick the latest Kijun Sen Plateau. If we Enter following ALL the
Criteria, that means Kijun Sen will be sloping UP apparently after going down
and therefore the last plateau will be followed by the slope forming an “inverted
table”. So now we know that placing our SL below last Kijun Sen Plateau will
keep it safe from price’s FLAMES. But how many pips below Kijun Sen Plateau
should we place it? I have found out empirically that if we measure how many
pips long is the biggest down Spike of the last 10 Candlesticks we can use it as a
guide for the pips distance of our SL below Kijun Sen Plateau adding 2-5 extra
pips.
○ Below KUMO on the highest Time-Frame we can take the Risk from :
KUMO represents the ultimate Support Level on ICHIMOKU KINKO HYO. So
if we’re BUYING from H4 Time Frame for example, it would be ideal if we
 could place our SL below the KUMO on H4 TF without exceeding the Risk we
can take, thus keeping our Account on the safe side. If this is a Risk much higher
than we can take, we go down to H1 Time Frame looking to place our SL below
the KUMO on that Time-Frame.
● Using Bollinger Bands and Fractals, we place our SL :
○ Below the last valid Down Fractal or below the Lower Bollinger Band,
whichever is lower, if we BUY from the Lower Bollinger Band.
○ Below the last valid Down Fractal below the Median Bollinger Band if a
bullish candlestick has closed above it and it’s sloping UPwards, or below the
Lower Bollinger Band, whichever is safer.
● Using PARABOLIC SAR (PSAR), we place our SL below the first Bullish PSAR Dot
on the next smaller Time-Frame from the one we’re taking the trade. If for example
we’re taking the trade from H1 Time-Frame, we place our SL below the first Bullish
PSAR Dot on M30 Time-Frame.

Conversely, when Selling, we’re looking for strong Resistance Levels to place our Stop-Loss
above them.

STOP-LOSS Placement Criteria when SELLING

● Using ICHIMOKU KINKO HYO we know that the very first level of Resistance above
price, is Tenkan Sen. But because it is a very sensitive line and we run the risk of getting
our SL easily hit especially on small Time Frames, we avoid using Tenkan Sen as a SL
Placement level.
○ Above Last Kijun Sen Plateau : Next Resistance Level, much stronger than
Tenkan Sen, is Kijun Sen and it makes the ideal SL Placement level of reference
especially if we pick the latest Kijun Sen Plateau. If we Enter following ALL the
Criteria, that means Kijun Sen will be sloping DOWN apparently after going up
and therefore the last plateau will be followed by the slope forming a “table”. So
now we know that placing our SL above last Kijun Sen Plateau will keep it safe
from price’s FLAMES. But how many pips above Kijun Sen Plateau should we
place it? I have found out empirically that if we measure how many pips long is
the biggest up Spike of the last 10 Candlesticks we can use it as a guide for the
pips distance of our SL above Kijun Sen Plateau adding 2-5 extra pips.
○ Above KUMO on the highest Time-Frame we can take the Risk from :
KUMO represents the ultimate Resistance Level on ICHIMOKU KINKO HYO.
So if we’re SELLING from H4 Time Frame for example, it would be ideal if we
could place our SL above the KUMO on H4 TF without exceeding the Risk we
can take, thus keeping our Account on the safe side. If this is a Risk much higher
than we can take, we go down to H1 Time Frame looking to place our SL above
the KUMO on that Time-Frame.
 ● Using Bollinger Bands and Fractals, we place our SL :
○ Above the last valid Up Fractal or above the Upper Bollinger Band,
whichever is higher, if we SELL from the Upper Bollinger Band.
○ Above the last valid Up Fractal above the Median Bollinger Band if a bearish
candlestick has closed below it and it’s sloping DOWNwards, or above the
Upper Bollinger Band, whichever is safer.
● Using PARABOLIC SAR (PSAR), we place our SL above the first Bearish PSAR Dot
on the next smaller Time-Frame from the one we’re taking the trade. If for example
we’re taking the trade from H1 Time-Frame, we place our SL above the first Bearish
PSAR Dot on M30 Time-Frame.

There are also two different approaches to Stop-Loss Placement :

A. FIXED SL : when our Risk determines whether we’ll take a trade or not. For example, if
the maximum RISK I can take is 30pips, and find out that I can place my SL at a safe 30
pips distance on M15 Time-Frame but Market’s Conditions don’t look ideal even if my
Entry Criteria are met, I will NOT take the trade. I’ll keep searching for a trade from the
highest possible Time-Frame with a very low risk of 30 pips at a safe level where I can
place my SL.
B. PER STRATEGY : I use the SL Placement Criteria of the Specific Strategy I’m applying
being a bit flexible regarding my Risk.

Chapter 48 : SL Trailing

Trailing our Stop-Loss as price is moving to the desired direction, can give us great benefits if
applied on a trending Market in a way that respects price’s freedom to fluctuate within its vital
zone.

To trail our Stop-Loss there must be a clear trend UPwards or DOWNwards.

Stop-Loss Trailing is optional after Breakouts, especially traded with “Bottleneck & Funnel”
Pattern’s Criteria.

DO NOT Trail your Stop-Loss when trading from the Daily Time Frame because Daily
Candlesticks may appear cancelling each other with their bodies or spikes although the move
may finally end up to the initially estimated direction and level.

Even when price is clearly trending, I’m in fact a bit skeptical about Trailing Stop-Loss because
we may lose money or lose a fantastic trade just because of a lethal spike and 2 pips of missing
distance from our Trailed SL. It is far more profitable to be conservative with your Take-Profit
Target placement going for a few pips per day -exactly as your Trading Plan dictates- than being
conservative with your SL Trailing.

Since SL Trailing needs to be applied when price is trending, and we know that by definition
when price is trending UPwards it makes Higher Highs and Higher Lows while it makes Lower
Lows and Lower Highs when trending DOWNwards, it’s evident that we must trail our SL
following price’s trending pattern and that means we must keep SL safe below/above previous
correction when price is making the new one and trail it below/above the new correction after
price has started making the next.

ICHIMOKU helps us Trail our SL by following Kijun Sen stairs made from Plateaus (Flat
Levels) when price is making its corrections and sloping segments as price is continuing higher
or lower.

Trailing the SL following Kijun Sen is not a bad idea but there is one even better and that’s
trailing SL below/above the KUMO.
Bollinger Bands help us Trail our SL by following the Swing Lows below the Median Bollinger
Band or the Swing Highs above the Median Bollinger Band, on the condition Median Bollinger
Band is sloping UPwards or DOWNwards respectively.

Trailing the SL below/above the Median Bollinger Band is quite practical, but trailing it above
the Upper BB or below the Lower BB, keeps it safer and allows price to move freely within its
zone.

An excellent Tool that helps us Trail our SL with optimum efficacy, is PARABOLIC SAR
(PSAR). Actually sometimes I feel like this tool has been invented with the sole purpose to help
the trader trail the SL. Trailing SL below PSAR Dots on an UPward Trade and below PSAR
Dots on a DOWNward Trade, especially when we trade from H1, H4 Time Frames or Daily,
makes our trading a “breeze” because it gives us an exact visual guide of placing our SL after
each candlestick closes, taking the guessing away from the mind.

Let the Median Bollinger Band help you determine whether you’ll trail your SL below/above the
PSAR Dots of the Time-Frame you’ve taken the trade from or from the next smaller one.
A practical tip is to trail your SL below PSAR Dots on the next smaller Time-Frame when you
have taken a Long (BUY) Trade with a steep Median BBAND inclination or above PSAR Dots
on the next smaller Time-Frame when you have taken a Short (SELL) Trade with a steep Median
BBAND inclination.

Stop-Loss Trailing has also its philosophical analogue in Life because if we are fans of
essentialism, every time we cut out the noise and proceed according to our plan regardless of the
circumstances, we actually are trailing our Stop-Loss keeping only what matters and stepping on
the essentials to make further progress.

● Priorities and SL Trailing

Theoretically and for educational purposes in a Trading GUIDE like this, I have to place Risk
Elimination as the TOP PRIORITY in Trade Management, then Locking Daily Pips and then
Maximizing Profits. But I don’t write this Book based on what you expect to be the best
practice in theory. I write it based on REAL LIFE, REAL TRADES, REAL PROFITS. So
please pay very close attention here. I will actually highlight this paragraph risking to make my
Book look ugly but I don’t care. I only want to make sure you get my point and benefit from it.

Your TOP-OF-THE-TOP Priority is to lock your Daily Pips.

-Why?
-Because it is as close as it gets to Insanity, to have set a Trading Plan, to have made a
thorough study of the Market, to have chosen a Trade based on precise Criteria and then
see the price moving into the Green Zone, giving you your DAILY PIPS, but instead of
closing the position and cashing out your pips, stay there and WAIT to trail your SL
closer to your Entry and then into the Green Zone.

Let me ask you something.

-Setting the Trading Plan and estimating Leverage, Size of Lots, Daily Pips Target and
number of Trading Days, don’t you have already a “rough” -if not “precise”- idea about
how soon you’ll turn your $1000 into $1Million?

-I’m sure you answered YES!

-And don’t you think that turning $1000 into $1Million is a miraculous achievement?

-You definitely said YES again!

-And haven’t you estimated the DAILY BABY STEPS that will lead you to the miracle by
determining your DAILY PIPS TARGET?

-I know it’s a YES again!

-Then why on earth would you ignore those GREEN DAILY PIPS once the Market is
giving them to you? Do you think anyone will judge you or criticize you for abandoning
a 200 “potential” pips trade for just a handful of “real” pips? Do you think you are
obliged for some vague reason to slave yourself in front of your monitor for 26hours per
day? I’m not joking...most traders have extended day’s hours so they can watch the
candlesticks dancing...most of the time eating up their capital.

Do you think the image of a wildly successful trader is that of a super active freak sitting
in front of an 8 monitors Trade-Station day in and day out? Is staying glued to an array
of screens what your eyes are made for? Is this what the life of your dreams should look
like?
Sitting in front of 8 monitors doesn’t make you a successful trader, it makes you the
“Master of Distraction” with permanent “tempest in skull” to say the least :)

Do you think you should explain to anyone why you are sticking to your Trading Plan
instead of going for the glory of the trade? Do you think you are a bad or even a stupid
trader grabbing only your Daily Pips out of a huge pile of pips that other traders might
make from the same move?

The KEY WORD here is CONSISTENCY.

It’s not how many pips you MAKE, but how many pips your KEEP ...FAST. The truly
successful Trader is the one who consistently KEEPS her/his Daily Pips staying as
little time as possible in a trade.

The vast majority of the traders who chase the 200 pips trades, unfortunately are not
disciplined enough to exit when correction starts and being hit by the “Euphoria
Syndrome”, in most of the cases lose all their profits and even part of their capital if
they’re not patient enough to WAIT for the price to resume its previous trend. But to my
opinion, their biggest loss is not the money-loss because money supply can be
replenished. Their biggest loss is TIME which can’t be replenished in any way.

When I say that the truly successful Trader is the one who consistently keeps the Daily
Pips FAST, I’m not talking about Scalping. Scalping is just a method. I’m talking about
your overall philosophy and attitude as a Trader. To be more specific, I’m talking about
the FXHOLIC Trader’s Attitude.
The FXHOLIC is focusing on the DAILY PIPS TARGET and nothing else. The
FXHOLIC is not the victim of Market’s Intentions or circumstances, but the BOSS of
her/his Trades and the one who determines the rules of the Game which is about
HITTING THE DAILY PIPS TARGET CONSISTENTLY.

You may wonder why do I say that since my Studies, Strategies and Signals are aiming to
making tenths even hundreds of pips per trade. Let me put this straight here. My Studies,
Strategies and Signals aim at increasing the ODDS to LOCK your DAILY PIPS FAST.
Period.

My advice regarding Trade Management is this :

1. After thorough study and when your ENTRY CRITERIA are ALL met, place an
Entry Order.
2. Place your SL according to the Market’s Conditions and your Risk Management
Rules allowing for Double Risk. (be generous with your SL)
3. Place your Take-Profit Target at your DAILY PIPS TARGET Plus Broker’s
Spread. (be stingy with your TP)
4. RINSE & REPEAT the next day.

I know it doesn’t sound sexy at all. And it isn’t. In fact, it’s quite boring.

Success in FOREX Trading is a boring process of doing again and again what’s
working. In other words, it’s all about making a handful of pips per day...EVERY
DAY!

Well, if not for the scope of turning your $1000 into $1Million after 10 Doublings, at
least try the DAILY PIPS TARGET Option I suggest for educational and practicing
purposes.

Yes, you can stay tuned to your Trading Plan going for 20 pips per day not necessarily
locking your Daily Pips every day but taking a Trade that will give you let’s say 200 pips
in 10 trading Days. Theoretically, you’ll be on track with your Trading Plan and
everything will look fine. But there is a HUGE DIFFERENCE between a Trader who
went through the 7 Steps Checklist every day for 10 Days and the one who did it only
once.

Setting your DAILY PIPS TARGET as your TOP PRIORITY, and if your D (number of
trading days you need to Double your Account’s Equity) is 50, by the time you’ll reach
 the $1Million Milestone, you’ll have repeated the process at least 500 times. That fact
alone will catapult you to the Elite of the Elite of world’s best Traders and you won’t
need anyone’s recognition for that.

So when you are in the Trade, don’t allow the “SHOULDA, WOULDA, COULDA” noise
of a potentially huge move distract you from your ONE AND ONLY PURPOSE to make
your DAILY PIPS. And once you make them, go away and do whatever else you want to
do with your day, ideally enjoying life. DON’T RE-ENTER.
And now back to Theory :)
■ Risk Elimination : The distance between our Entry and our SL
Placement represents RISK and it shouldn’t be higher than 3% of our
Account’s Equity. Our first priority is to Trail our SL in a manner that lets
price breathe and slowly allows us to bring it to our Entry level. From that
point afterwards, we will be trading with ZERO RISK and that means a lot
to our psychology and overall success rate.
■ Locking Daily Pips : This happens when trailing our SL it reaches the
level of our Daily Pips Target. From that point on, we know that no
matter how does the trade want to evolve, we not only have eliminated
risk, but also secured our Daily Pips Target in absolute accordance with
our Trading Plan.
■ Maximizing Profits : Although maximizing profits is the happy task of
“milking the trade”, very few traders do it right. If you survived the price
fluctuations till trade matured, and then went the extra mile of waiting
patiently till your SL was gradually trailed to your Entry Level -instead of
grabbing your daily pips, closing position and running for the hills not
looking back ...hahahahaha- don’t you think it’s a pity to suddenly “kill” a
high potential trade by suddenly becoming stingy with your SL Trailing
criteria, moving your SL too close to price-action flames? You already are
a Winner and if you consider the pips you locked not a big deal, let me
remind you about checking how many years would take for your money
sitting in a BANK Account for a BANK to give you these pips equal
amount of money as interest...how many YEARS? So if you’re tempted
to place your SL too tight, it means you’re tired of monitoring the trade or
you just don’t feel confident that the trade will hold strong for much
longer. In both cases you should minimize your input in terms of time and
attention so here are my suggestions :
● Close position. You’re a Winner. Celebrate it regardless of pips
made :)
● Keep trailing your SL following strictly the Criteria you followed
so far.
 ● Trail your Take -Profit Target to the next level of
Support/Resistance on the Trade Setup Time Frame of higher.
● Follow the same SL Trailing Criteria from the next higher Time
Frame.
● Change SL Trailing Criteria into less “risk averse” ones, so if you
were for example following Kijun Sen Plateaus, switch to
following the KUMO or trailing SL from one Tenkan Sen/Kijun
Sen crossover to the next etc

○ Adding Positions
■ We never add positions when the first one is still in red zone (losing
money)
■ According to our Trading Plan and FXHOLIC’s Equation, we double
positions when we have doubled our Equity. For example, if my account’s
leverage is 100:1 and my Equity is $1000, I can trade mini lots and
according to my Risk Management Rules, I will be trading 1Mini Lot
(V=0.1 or Size=0.1) per $1000. That means, I will add one more mini lot
only as soon as my Equity grows to $2000 and when it becomes $3000 I
may add a third Mini Lot.
■ But if we want to add position during a very profitable trade, we can do
that on the condition that our Margin Level% has increased at least 50%.
Margin Level % is our Equity divided by the Margin of the pair we’re
trading and then the quotient we find is multiplied by 100. For example, if
we have an account with 100:1 leverage,our Equity is $1000 and the
margin of the pair we’re trading is $50, then by trading 1 Mini Lot of it (
Volume = 0.1 or Size=0.1) our account’s Margin Level % is (1000/50) x
100 = 2000% According to FXHOLIC’S Equation we should add 1 more
mini lot if the Margin Level % goes up to 4000%. But we’ll add half
mini lot (V=0.05 OR S= 0.05) when Margin Level % becomes 3000%.
■ RISK/PROFITS Units 1:3 : a FOOL-PROOF way to add positions is by
using a golden ratio. When we place our SL at a certain distance from our
Entry Level, this pips distance represents the RISK we can take and I will
call it a RISK-UNIT. When price moves into the Profits Zone to our
favor, we trail our SL following the SL Trailing Rules of our choice.
When SL is trailed to our Entry Level, our RISK is ZERO, because price
has moved inside the Profits Zone by an almost equal amount of pips
which I’ll call PROFITS-UNIT. When the RISK/PROFIT Units ratio is
1:1 we trade with ZERO RISK but also have ZERO PROFITS locked. As
price moves further into the Profits Zone, when we trail our SL for one
more PROFITS UNIT, we now trade with 1 PROFIT UNIT and no RISK
 UNITS. When we trail our SL one more PROFIT UNIT into the Profits
Zone, we now trade with 2 PROFIT UNITS and no RISK UNITS. As
soon as we lock 3 PROFIT UNITS, we can consider ADDING ONE
POSITION placing its SL ONE RISK UNIT away from its Entry. We
now trade with a 1:3 RISK/PROFIT UNITS Ratio. Worst case Scenario is
for the 2nd Position’s SL to get hit. n that case, we’ll be left with 2 NET
PROFIT UNITS which means AT LEAST DOUBLE OUR DAILY PIPS
TARGET because our RISK is usually higher than our DAILY PIPS
TARGET. For example, if our RISK is 30pips and our DAILY PIPS
TARGET is 20pips, we should add one more position when we have
locked 90pips (3 PROFIT UNITS) in profits by trailing our SL. Worst
case scenario is that our 2nd Position’s SL gets hit and if that happens,
we’ll EXIT the Trade with 2 PROFIT UNITS in our pocket which means
60pips three times as much as our DAILY PIPS TARGET. Making a note
of the Margin Level % before we add the position and after we add it, will
help us a lot automate the process in case of a big trade.

Chapter 49 : Take-Profit Target Placement

My opinion regarding Take-Profit Target Placement has already been highlighted above. I will
just repeat here that focusing on your DAILY PIPS TARGET and placing your TP at your Daily
Pips Target plus Broker’s Spread, there will come the day when you’ll be taking a Trade chasing
your Daily Pips with 100 STANDARD LOTS and if your Daily Pips Target is 20 and your
Account’s Leverage is 100:1, then price hitting your Daily Pips Target will translate into $20K
for you because your Trading Plan has the scaling up potential -in the form of geometric
progression- already built in it. So if you ask me, I vote for the “Daily Pips Target plus Broker’s
Spread” TP Placement option.
○ Fixed : we can place our TP at a fixed distance which can be a fixed amount of
pips (our Daily Pips Target + Broker’s Spread) or a Ratio such as the ⅔ of
Reward - Reward Assessment is a study we have made already before taking the
trade- which is an excellent alternative to the Daily Pips Target or the ¾ of the
Reward which scratches the borderline of greed.
■ Daily Pips Target + Broker’s Spread
■ ⅔ of Reward
■ ¾ of Reward
○ Per Strategy : each Strategy, uses a tool or a set of tools that help us estimate
the Turning Points of price action. Actually the turning points, are the levels at
 which price changes direction either because it wants to make a correction -small
fish’ profit taking move- or a big reversal -sharks’ move- and these are
Resistance Levels if price was going up previously or Support Levels, if price was
falling previously. If for instance we trade using a BUY Scenario from H4 Time-
Frame, we can place our Take-Profit Target at the Upper Bollinger Band of H4
Time-Frame, or at the Median Bollinger Band on Daily TF or even at the Upper
Bollinger Band of DAILY TF. If we see Confluence on any of these levels of
Resistance by another tool such as ICHIMOKU in the form of a Kijun Sen
Plateau or a Bearish KUMO, we place our TP at the level where tools confirm
each other because there is higher Statistical Significance for the price to change
direction as soon as it reaches that level.
○ Roberto’s TP Placement Method : Roberto Parisi’s method is an excellent
choice for TP Placement when using ICHIMOKU KINKO HYO alone or
combined with other tools. It’s based on the fact that Chikou Span, -the Green
Line of ICHIMOKU moving in the past, which is the clone of current price action
in Linear Form instead of Candlesticks,- is creating Support and Resistance
levels whenever it becomes horizontal moving in a zig zag sideways manner, or
makes strong angles pointing downwards or upwards. Placing our TP at these
horizontal levels or angles of Chikou Span on the Time Frame we’re trading from
or on the higher ones, is an amazingly powerful option.

Chapter 50 : Stay In / Exit Criteria

Before we take a trade we must have the Stay In/Exit Criteria in our mind with the absolute
certainty that they will keep us in a profitable trade and trigger our exit the right moment.

Actually Stay In/Exit Criteria are the two sides of the same coin because while Stay In Criteria
are met and when they’re not met any more, we Exit.
We don’t use Stay In/Exit Criteria with “Set It and Forget It” types of Trades where we place our
Entry, Stop-Loss, Take-Profit Orders and leave the trade alone.

Depending on Market’s Conditions and after making the Reward Assessment and picking Time-
Frame, if we don’t want to set our Take-Profit Target at our Daily Pips Target + Broker’s
Spread, we have the option to :

1) Either Use a Laser Sharp “Knife” to cut the trade like Stochastics Crossover or Kijun Sen
turning flat after being sloping on the same Time-Frame or first opposite PSAR Dot , or
candlestick closing Below/above Tenkan Sen, or MACD Signal Line popping out of
Histogram on smaller Time-Frame…usually applicable on strong Breakouts
2) Either use the Strict Stay In/Exit Criteria of the Specific Strategy we’re using being
extremely conservative and considering Re-Entering in case we’re stopped out
 3) Or follow the Trend either by just following Median Bollinger Band from “Knee” to
“Knee” or going from Tenkan Sen/Kijun Sen Crossover to Tenkan Sen/Kijun Sen
Crossover, or following Kijun Sen from the beginning of its course to one direction till
the change of direction.

There is a kind of Obsession during Trade Management that is “benign” because it can literally
protect you from sudden opposite moves and that is “Obsession with Correction”. Once you
are in the trade, rather than looking for profits, look for the possibility of a sudden opposite
move.

Another Rule that can really save your account from impetuous wrong decisions, is the “Wait 10
Candlesticks after you EXIT” Rule. After you EXIT with profits, you are at a state of
EUPHORIA and you are susceptible to Enter Again while price is now starting to reverse. You
are “drunk” from the excitement and the adrenaline rush of the trade and want to go for more
pips HOPING you’ll make them. A way to avoid devastating losses from BAD TIMING
ENTRY is either to WAIT for 10 Candlesticks or to trade another Pair with which you are NOT
“emotionally attached” and you’ll make logical decisions about.
PART 7 : The 7 Steps Checklist

❏ Step #1 : Trading Plan | 10 Doublings Calendar

Setting our Trading Plan before we go to the Charts and start trading is of essential importance.
Our Trading Plan is about GOAL SETTING using our available resources in terms of equity,
ability and time.

Our Trading Plan is about determining how fast we can double our Equity given our account's
Leverage, specifying the position size per pair, and going for a handful of pips per day making
the task absolutely achievable and within our current ability so that it can easily become a
DAILY HABIT.

We'll have to use FXHOLIC'S Equation : s X L/10R X p X d = e

s = lot's size (i.e. for 1 micro lot s = 0.01, for 1 mini lot s = 0.1, for 1 standard lot s = 1.0)
L = leverage (i.e. for an account with 100 :1 Leverage, L=100)
R= the quotient of 1 divided by denominator currency's rate with USD (i.e. for /USD pairs R=1
for non /USD pairs R equals the quotient between 1 and denominator currency's rate against
USD for example on GBPJPY R = 1/USDJPY )
p = daily pips target (ideally it should not be higher than 20)
d = number of trading days it will take us in order to Double our equity
e = equity in USD (starting out with no more than $1000, we'll need 10 Doublings to reach
$1Million)

***Important TIP : Margin is the cost of trading a lot of a specific pair and each Broker have
their own Price-List (margins) for the financial instruments they avail for trading. Spread is the
amount of pips a Broker gets as a commission per Trade or per volume of Lots traded. It varies
per pair and per session as well as on special Market's Conditions when big events take place.

Next, we'll have to set the dates and the amounts of our Doublings on our Calendar.

STEP #1 Rules :
❏ In FOREX, we don’t need millions to make millions.
❏ We start with capital we can afford to lose and don’t trade more than $1000 of it till we
double our Equity at least twice.

❏ Step #2 : S/E Ratio | Daily Pips Target / Calculating Risk

Keeping the S/E Ratio fixed is KEY to the success of FXHOLIC System which is applying the
geometric progression/compound effect which catapults our $1000 up to $1Million. That
means, if I trade 1 Mini Lot (s=0.1) per $1000, S/E = 0.1/1000 and if I double my Equity up to
$2000 , I can double the mini lots I trade to 2 so now trading 2 Mini Lots (s=0.2) , S/E =
0.2/2000 therefore the Ratio remains unaltered.

Daily Pips Target ideally should be no more than 20pips for two reasons. First because going
after 20pips makes our life easier because it is an achievable task and second because even if the
body of a Daily Candlestick is not bigger than 20 pips, the Accordion Effect is in full play if we
switch to M15 with its 96 Candlesticks and on average 3 or more moves of 30-40pips each
within a day.

RISK is the pips-distance between our Entry and our Stop-Loss and it corresponds to the
maximum loss we can afford per trade. It has been statistically estimated that if RISK is less
than 3% of Equity, Account is safe. Therefore for an Account with $1000 Equity, I can't take
more than $30 RISK which reflects to 30mini pips if my Account's Leverage is 100:1.

STEP #2 Rules :
❏ Trade ONLY ONE PAIR at a time. Actually, trade ONLY ONE PAIR every time for the
first 117 Years. You don’t need more than ONE PAIR to build true wealth with FOREX
Trading, because price never stops moving and while it’s moving you can make money
no matter if it goes UP or DOWN. Babies have a weird phobia. When their mother
 leaves the room they think she left forever and cry. Don’t be like babies. Just because
you closed a position, it doesn’t mean Pair stopped moving and just because you don’t
monitor a Pair, it doesn’t mean Pair doesn’t exist or can’t give you nice money.
❏ Daily pips target should be no more than 20 as we’re starting out. When we build
confidence after at least 3 Doublings, we can increase our Daily Pips Target.
❏ Positive Psychology in Trading is KEY. So it is more important to FEEL like a winner
than to reach certain numerical milestones. That means, it is better to go for 20pips per
day and make 30 than go for 50pips per day and make 30. The amount of pips we make
is the same, but psychology is totally different. When I go for 20pips and make 30 I feel
like being at the top of the world. When I go for 50pips and make 30 I feel like a failure,
I lose self esteem and I also lose focus. I either run the risk to start chasing trades with the
sole purpose to make those extra pips, ignoring the rules and criteria and acting like a
gambler, or to quit feeling frustrated and inadequate.
❏ Going for 20pips per day doesn’t mean that we should trade every day. We may have to
WAIT 3 trading days for a trade that may give us 120pips in two days. That means we
made 120pips in 5 trading days, therefore we’re 20pips ahead of our goal for the week.
Our calendar serves as a point of reference, not as a decree.
❏ If our SL gets hit and we lose 30pips one day, we don’t take another trade that day and
we don’t chase 50pips next day. This is gambler’s attitude and we’re not gamblers. By
sticking to the rules and the criteria, we’ll find out that Market gives us way more than
20pips per trade in at least two out of every three trades we take. So losses will take care
of themselves.

❏ Step #3 : M/W Overview | Reward Assessment on DAILY TF

Monthly & Weekly Time-Frames Overview : looking at our Charts we want to see the following
:

#1 : The idiosyncrasy of the pair

#2 : If the move is young and strong
#3 : If there is a Reversal in progress

Going down to DAILY Time-Frame, using ICHIMOKU, BBands, Fractals and Stochastics, we
can evaluate price action direction regarding the half cycle it is moving on and here are the
HALF CYCLES SCENARIA :

1. Price moving from Lower BBand UP to the Median BBand

2. Price moving from Median BBand UP to the Upper BBand .......OR.....DOWN to the Lower
BBand
3. Price moving from Upper BBand DOWN to the Median BBand
4. Price moving from Median BBand DOWN to the Lower BBand .......OR.....UP to the Upper
BBand

Using ALL our tools, we can make the assessment of move's pips-value and this is the
REWARD.

If the REWARD is TWICE as much as our RISK and 3-4 TIMES our Daily Pips Target, we
take the trade. Otherwise we drop it. For example, if the REWARD is 80pips, it is more than
TWICE our 30pips RISK and 4 Times our 20pips Daily Target, so we will take this trade. If the
REWARD is 50pips, it is less than TWICE our RISK so we drop this trade.

Conclusively, at this step, we find out which is the main trend on higher Time-Frames and
whether the move on Daily is following the main trend or is a correction and how much of it
remains till the next BBand. We also determine the direction of the Trade we'll take and whether
it is worth taking or not.

STEP #3 Rules :
❏ Market doesn’t move as fast as we want. It moves as fast or as slow as it wants. That’s
why WAITING for ALL our Criteria to be met is GOLD.
❏ Market is an Ocean of Opportunities and just like the Ocean never runs out of water,
Market never runs out of Opportunities either. So if we miss a nice Trade, there will be at
least ten more waiting out there.
❏ We never stress about Trades we might have taken but didn’t. We use REAL Time,
REAL Tools, REAL Criteria, not wishes, assumptions, opinions and hypotheses.
❏ We Enter SLOW, we Exit FAST. That means we study ALL our Entry Criteria and
check if they are ALL met before we Enter but we only need to see our Exit Criterion met
to jump out and save our pips.
❏ Being the BOSS of our Trades, we are in absolute control of them. There is no Stress and
no Rush. And if the Market’s Pistolero points his gun to our head pushing us to jump in a
trade fast, we get rid of him IMMEDIATELY even if we have to shoot him :)

❏ Step #4 : Market’s Condition | Picking Time-Frame

So far we know the DIRECTION of the Price Action and have estimated the REWARD it
represents.

Now we want to determine Market's Condition so we can use the right Trading Strategy for it
and we also want to find the Highest Time-Frame we can Enter from, placing our Stop-Loss at a
level which is immune to spikes and also keeps the RISK as low as we can take it. So our RISK
determines the Time-Frame we will Enter from. The reason we want to enter from the highest
possible Time-Frame with the lowest possible Risk, is that higher Time-Frames are more
reliable.

***Important TIP to remember regarding the choice of Time-Frame : we start from DAILY TF
and go down first checking which is the ideal SL placement level depending on the Significant
Support/Resistance Levels and then measuring the pips-distance and checking if it is equal or
lower than the Risk we can take. It's NEVER the other way around !

Below are the Market's Conditions we may see on DAILY TF :

#1 Range-Bound Market : when price is moving in a ZIG-ZAG MODE within a Range

#2 Trending Market : when price is moving UP making Higher Highs and Higher Lows or
DOWN making Lower Lows and Lower Highs

#3 Consolidating Market : when price is in a stasis moving sideways in a horizontal mode

maintaining the same price level

STEP #4 Rules :
❏ Ideally we want to enter from the highest Time-Frame where we can place our SL
without exceeding our RISK limits. So going down to smaller Time-Frames till we spot
the one where we can enter from with minimum RISK looks good but isn’t the best
practice because smaller Time-Frames have lower reliability and higher volatility
especially the kind of unexpected Spikes that can hit our SL. So it is preferable to not
take a trade at all and check another pair, if we can’t spot a nice Entry on a relatively
High Time-Frame.
❏ When looking for our SL placement in order to determine if we can take the trade from a
Time-Frame or not, our RISK is the last thought that should cross our mind. FIRST come
Market’s dynamics and price action fluctuation. Then comes the measurement of the
RISK. If it is within our limits, we take the trade. If it is higher, we drop it without second
thought.
❏ A trick we can use in order to enter from a higher Time-Frame -such as Daily-
minimizing RISK, is the candlestick-per-candlestick approach. We want to ENTER with
explosive momentum. That means, we want to see a strong candlestick to the new
direction and the next one opening to the same direction with all our tools confirming it.
We place our SL just below/above the opening of the strong candlestick and ENTER
when the next opens.

❏ Step #5 : Picking Strategy

Depending on the Market's Condition we currently see on DAILY Time-Frame we pick the
appropriate Trading Strategy that goes with it . Below are a few Strategies we can use per
Market's Condition. For the FXHOLIC Trader, Strategy is the ONE WAY FXholic System
using Vectors to determine the SCALP that will secure the Daily Pips -no more than 20- plus
Broker’s Spread and then we use ENTRY Criteria from a relatively smaller Time-Frame
pinpointing our Entry with higher precision applying ICHIMOKU, Bollinger Bands, Fractals and
Stochastics.

#1 Range-Bound Market : when price is moving in a ZIG-ZAG MODE within a Range

1a. Trading the Zig-Zag Daily to H1 TF
1b. Trading the Zig-Zag H4 TF to M15 TF
1c. Bollinger Bands + Stochastics on Daily TF
1d. Bollinger Bands - MACD -PSAR
1e. Bollinger Bands -Heiken Ashi - ADX

#2 Trending Market : when price is moving UP making Higher Highs and Higher Lows or
DOWN making Lower Lows and Lower Highs
2a. ICHIMOKU 4 Time-Frames
2b. Bollinger Bands - Fractals - Alligator
2c.“Catching the Bus”
2d. Fibonacci Retracement Tool
2e. Scalping from M15 with ICHIMOKU & BBands
2f. Rainbow System ( Trading with Simple Moving Averages)
2g. Trendlines

#3 Consolidating Market : when price is in a stasis moving sideways in a horizontal mode

maintaining the same price level
3a. Bottlenecks and Funnels

STEP #5 Rules :
❏ Trading is not about fashion and variety. Which means, you should learn ONE Trading
System very well and always look for Market’s Conditions ideal for you to apply it.
Don’t look to trade ALL Market’s Conditions, ALL Pairs, ALL the time. Be selective
and monotonous. Be deadly boring doing AGAIN AND AGAIN what's making you
pips. Be like a hammer hitting a nail and hit that damn nail NON-STOP! If you want to
specialize on trading Breakouts after Consolidation, using for example “Bottlenecks &
Funnels”, become a KILLER on “Bottlenecks & Funnels” and trade NOTHING ELSE.
By the way, it’s not bad to seek multiple confirmations before you enter with one System,
by checking another System too making sure they both agree.
 ❏ When you’re in , be 1001% confident with your Strategy -1000% is not enough-apply its
Criteria and Rules religiously and don’t mess with your Trade. Set it and forget it.
(Check it only as often as the Time-Frame you monitor the trade from requires.
Remember that candlesticks are valid ONLY when they close. While they’re open, they
behave like electrons, being everywhere at the same time.)
❏ For the FXHOLIC Trader, Strategy is the ONE WAY FXholic System using Vectors to
determine the SCALP that will secure the Daily Pips -no more than 20- plus Broker’s
Spread and then using ENTRY Criteria from a relatively smaller Time-Frame pinpointing
our Entry with higher precision applying ICHIMOKU, Bollinger Bands, Fractals and
Stochastics.
❏ Remember that there are no “A’s” in FOREX Trading. It is a SOLO Sport. You are the
athlete, the coach and the audience. Don’t pick the sexiest or the most sophisticated
Strategy. There is no one to impress. Pick the SIMPLEST ONE that you are extremely
familiar with and will stack more money to your Bank Account. And if your personality
is more a Bull than a Bear, go only for Long Trades. If on the other hand you are a Bear,
well….that’s your problem….hahahaha...

❏ Step #6 : Entry Criteria | SL Placement | SL Trailing

We want to Enter EARLY either at the beginning of a Reversal - preferably on a relatively high
Time Frame such as H1, H4 or DAILY- or a Correction - only from M15 or M5 Time Frame.
On ICHIMOKU KINKO HYO, the earliest Signal that price is changing direction is
Price/Tenkan Sen Cross. But this is not enough because if price just closes above/below a Flat
Tenkan Sen, it can continue to the previous direction right after. So we need a confirmation
about price's intention to go to the new direction and that is Tenkan Sen's inclination. If we are
going to BUY , we want to see Tenkan Sen angled or curved UPwards and if we want to SELL,
Tenkan Sen must be angled/curved DOWNwards.

But since our money is at stake, using multiple confirmations before we Enter is IMPERATIVE.
One of the most useful Indicators we're using is Bollinger Bands System. BBands show price
action's volatility, and range but they also show direction. If Upper and Lower BBands are price
action's "muscles", Median BBand is price action's "bone". So when the Median BBand is
forming a "knee" going Up or Down, we get a very strong confirmation about a change in
direction.

Furthermore we need to look at Chikou Span (ICHIMOKU Green Line which is price action's
clone shifted in the past) because this magical line makes things happen when it crosses past
price action and here is where another extra confirmation comes from.

And of course Stochastics must both go to the same direction confirming our Entry.
So here are the Basic ENTRY Criteria we should be looking for :

BUY if :
1. price CLOSES above Tenkan Sen
2. Tenkan Sen is angled/Curved UPwards
3. Median BBand is curved UPwards
4. Chikou Span has just crossed above past price action going UP
5. Stochastics are both going UP

SELL if :
1. price CLOSES below Tenkan Sen
2. Tenkan Sen is angled/Curved DOWNwards
3. Median BBand is curved DOWNwards
4. Chikou Span has just crossed below past price action going DOWN
5. Stochastics are both going DOWN

Depending on the Market's Condition and the Trading Strategy we're going to use, we may be
looking for some extra confirmations or even fewer.

SL Placement is based on the basic principle that we only take a Risk to allow price fluctuation
to go as low as a strong Support Level can allow when we BUY, or as high as a Strong
Resistance Level can allow when we SELL.

SL Trailing is an essential part of Trade Management serving the 3 priorities :

1. Eliminate RISK
2. Lock Daily Pips
3. Maximize Profits milking the Trend.

Depending on Market's Condition :

1. There is no need to Trail our SL on a Rangebound Market

2. We can use Kijun Sen or Fractals corresponding to Higher Lows on Uptrend and Lower Highs
on Downtrend when the Market is Trending and of course there are detailed SL Trailing Criteria
per Strategy
3. When trading the Breakout after a Consolidating Market, we can either pick one of the various
SL Trailing options or EXIT as soon as possible either using the Take-Profit placement Rule
(placing TP at 2/3 of expected move's length) or using one of the STAY-IN/EXIT Criteria.
STEP #6 Rules :
❏ Successful Traders make more money WAITING than Entering Trades. This happens
because they’re true “Bosses” of their trades. They WAIT for ALL Entry Criteria to be
met before they Enter. They WAIT for the move to get exhausted before they EXIT.
They don’t rush. They’re extremely slow -turtle slow- with their Entries seeking multiple
confirmations.
❏ For every Trade Set Up, you should be aware of the Market’s Condition in order to pick
the right Strategy and in most cases you must see candlesticks CLOSE -except if your
Strategy’s Criteria mention cross and no close or if you see a Breakout Candlestick which
has a body bigger than the last 10 candlesticks and moves to one direction only- before
you Enter.
❏ SL Trailing is not always a blessing. It can be a Trader’s Plague when applied wrongly.
Some of my best trades were the ones I neglected Trailing my SL. I know there is the
reasoning that “well, if I’m stopped out, I can always re-enter” which is correct but
impractical. Because if you are stopped out of a great trade that took you hours to study
and Enter because a silly spike hit your Trailed SL, you may FREEZE, you may make all
possible mistakes and invent even more, you may get out of sync out of tune out of
balance with your own thinking as you’ll be watching price going to the initial direction
making hundreds of pips for other traders but not for you. Except Swing Trading -
RangeBound Market’s Trading- and Scalping, where SL Trailing doesn’t apply, there is
plenty of empirical evidence that you should let the trade evolve without Trailing your
SL. I know this sounds contradictory to what I have already described as “SL Trailing
benefits”, but I suggest you Trail your SL till you reach the level of confidence to let the
trade breathe freely and evolve without you approaching or almost “touching” price
action in a rather masochistic mood.

❏ Step #7 : TP placement | Stay In - Exit Criteria

Take-Profit placement is based on the principle that "Successful Trader is not the one who
MAKES the most pips but the one who KEEPS the most FASTER". That's why it is of critical
importance to secure our profits as fast as possible before price action cancels most part of them
during its minor fluctuations or major moves.

Having set our Trading Plan, we already know that we can turn $1000 into $1Million after 10
Doublings and have already estimated the 10 Doublings' Milestones and noted them on our
Calendar.

Therefore, by securing each Day's Pips we're on our way to our GOAL already and any extra
pips we can make are a BONUS.
A practical rule to maximize profits within the shortest possible time interval is to place our TP
at the 2/3 of estimated Move's -REWARD's- length. By doing this, we keep more pips than our
Daily Pips Target, FAST.

STAY-IN and EXIT Criteria are the two sides of the same coin and actually coincide.

1) STAY IN while candlesticks CLOSE above/below Tenkan Sen. EXIT when one candlestick
CLOSES to the opposite side of Tenkan Sen.
2) STAY IN while Median BBand goes UP/DOWN. EXIT when Median BBand turns FLAT.
3) STAY IN Long while Stochastics go UP. EXIT if they make a Bearish Crossover above 80-
level line. STAY IN Short while Srochastics go DOWN. EXIT if they make a Bullish Crossover
below 20-level line.
4) STAY IN Long while Kijun Sen goes UP. EXIT when Kijun Sen goes DOWN. STAY IN
Short while Kijun Sen goes DOWN. EXIT when Kijun Sen goes UP.
5) STAY IN Long while PSAR Dots go UP. EXIT when you see the first PSAR Dot above price
action (ideally on the immediately smaller Time-Frame). STAY IN Short while PSAR Dots go
DOWN. EXIT when you see the first PSAR Dot below price action (ideally on the immediately
smaller Time-Frame).
6) STAY IN Long while price is moving above the KUMO. EXIT when Kijun Sen starts going
DOWN. STAY IN Short while price is moving below the KUMO. EXIT when Kijun Sen starts
going UP.
7) STAY IN Long while MACD Bullish Histogram Lines grow taller ABOVE Signal Line.
EXIT when MACD Histogram falls below Signal Line (ideally EXIT when there is
inconsistency between Bullish MACD Histogram’s Line and Signal Line because Bullish
Histogram’s Line is shorter but Signal Line goes UP). STAY IN Short while Bearish MACD
Histogram Lines grow bigger BELOW Signal Line. EXIT when MACD Histogram jumps
above Signal Line. (ideally EXIT when there is inconsistency between Bearish MACD
Histogram’s Line and Signal Line because Bearish Histogram’s Line is smaller but Signal Line
goes UP)
8) STAY IN Long while candlesticks are closing ABOVE Alligator. EXIT when one bearish
candlestick closes below Alligator’s Lips (Green Line). STAY IN Short while candlesticks close
BELOW Alligator. EXIT when one bullish candlestick closes above Alligator’s Lips (Green
Line).

Depending on Market's Condition and the Strategy we're using, there may be some additions or
modifications to our STAY-IN /EXIT Criteria.

STEP #7 Rules :
❏ Two Traders can trade the same pair simultaneously, one BUYING, the other SELLING
and BOTH of them can be profitable. The difference is in the TIME OF EXIT and in
 Traders’ Mentality. Lets say that Trader A BUYS from DAILY Time-Frame because he
sees a nice Upward Move. He EXITS 5 Trading Days later having made 260pips. Trader
B SELLS from H1 Time-Frame trading a Downward Correction. He EXITS4 Hours later
having made 80pips. I mention this REAL LIFE example -which you can DEMO Check
for yourself anytime you want- to prove to you the fact that everything depends on Your
Way of thinking. The Market is always the same just like the Sea is always there. You
determine your way of trading just like a captain determines his way of sailing. If you
are an extremely energetic individual, Scalp from M5/M15 keeping your finger ready to
hit the mouse giving the “close position” order, trade from M30, H1 or H4 Time
checking when each Candlestick Closes to see if your EXIT Criterion is met and BE
FAST. If you are a sophisticated Trader with the mentality of an investor switch
gradually from lower Time-Frames to Higher Ones, slowly trail your SL to Break Even
level and then…..be PATIENT. Let the time work for you. As trade matures,
accumulating pips, you’ll be checking your trade only to see if you can add position.
❏ While you are a Beginner, trade only Trending Market’s Conditions, Trend-following
from relatively higher Time-Frames (Daily, H4 or H1) that give you enough time not
only to check if your Entry Criteria are met before you Enter, but also to make sure that
your STAY IN Criteria are met and EXIT the right time. Trend-following may last days
or even weeks. Trading a Range-Bound Market or Swing-Trading is a good match for a
more experienced Trader , not because of its technical skills requirements -it’s based on
extremely simple principles- but mainly because Swing Traders have no Bullish or
Bearish Biases on the pair they’re trading. They don’t hesitate a single moment
EXITING when the move is over and RE-ENTERING by Reversing Position. Scalping
from M5/M15 Time-Frames is a trading style you should follow when you are an
experienced Trader. I would suggest you go Scalping only after you have successfully
DOUBLED your Account’s Equity at least 4 times. When Scalping, everything is
allowed. You may enter when a M15 candlestick opens and EXIT three candlesticks
later without waiting for the last candlestick to close. With Scalping, you practically RE-
WRITE the rules and you’ve got to EXIT at FLASH-SPEED :)
❏ Most Traders experience LOSSES not because they Entered Wrongly or they Exited
Wrongly either. They are hit by the Market’s Euphoria Syndrome right after they EXIT
keeping profits. This Syndrome disarms reasonable thinking, you forget about Entry
Criteria and the only deafening voices shouting inside your mind are the ones saying “I
WANT MORE PIPS….AND I WANT THEM NOW!” The result of the Euphoria
Syndrome is that you RE-ENTER to the Wrong Direction and as Market starts moving
against you, your reflexes are still numb from the winning feelings of the previous
profitable move and you hate the idea of jumping out with minor losses which soon turn
into ….devastating ones. When you realize you’re trapped in a Reversal, your profits
have turned into losses and now your Equity is bleeding. In most of the cases, your
Euphoria-damaged psychology doesn’t allow you to think reasonably and hedge your
losing position making the necessary effort to recover your Account. Most killed
accounts died right after a period of great profitability due to the Euphoria Syndrome that
led to Wrong RE-ENTRIES after Right EXITS. To avoid that, if you are so filthy
ambitious that you want to take ONE MORE TRADE after you just EXITED a profitable
one, WAIT at least 5 CANDLESTICKS till you make a new Trading Decision. You can
thank me later :)
PART 8 : BUY/SELL Scenarios
Using ICHIMOKU KINKO HYO, Bollinger Bands, Fractals and Stochastics, with the optional
addition of Parabolic SAR (PSAR) below please find the sets of Trading Criteria if you want to
trade using BUY/SELL Scenarios.

PART 9 : FXholic’s SCALPING

They call it “Scalping” because with this Trading Method we take the surface -pips in a fast and
precise trade and jump out, but I prefer to call it “Surfing” because actually we are “surfing the
waves to both directions”.
There are a lot of “myths” and “truths” about SCALPING and becoming a SCALPER really
sounds exciting to the beginner trader.

Well, I have good news for you!

Following the FXHOLIC 7 Steps System and going for your DAILY PIPS TARGET every Day,
keeping it at 20pips or less, you are not just any kind of SCALPER, you are a sophisticated
SCALPER and an extremely successful one.

And once you make your first Million, nobody can hold you back from going for two or even
three SCALPS per day :)

There are different types of Scalping each one associated to certain requirements and Criteria.
I’ll make a general presentation of the other types and will emphasize FXHOLIC’s Scalping
Method with Vectors.

● Scalping based on Correction Profile

 ● Scalping the Breakouts
You can go Scalping a Breakout from M5 or M15 Time-Frame after having spotted a
“BOTTLENECKS & FUNNELS” pattern on H1 or H4 Time-Frame, going for your Daily Pips
Target or TWICE as much but no more pips.

If the “BOTTLENECKS & FUNNELS” Pattern appears on M30 or M15, Scalp from M5 Time-
Frame setting Take-Profit to no more than DAILY PIPS Target.
● Scalping from M15 TF when price is at one of the 3 Bollinger Bands on
H4 TF
● Scalping from M5 or M15 TF with Bollinger Bands, Fractals and
Alligator
● Scalping from M5 TF when H1 TF is Trending or Ranging
 ● Scalping from M5 TF just following Criteria

● Scalping with Vectors : the FXholic’s Method

I chose to place this Chapter at the End of the HOW Section of the Book because this is the
essence of FXHOLIC System’s Trading.

Here I’ll show you how to use what you learned, making thorough Studies of the Pairs within a
few minutes, in a manner that can easily become an automated Trading Routine followed by
your Subconscious Mind Every Day, without requiring any of your extremely limited Willpower
and at the same time, bending the odds to your favor so you can GRAB YOUR DAILY PIPS
from the Market in less than a couple of hours and GET OUT, feeling free to live your life
instead of enslaving yourself in front of the monitor all day...and all night.
“But have we studied all about Reward Assessment and Risk/Reward or Daily Pips
Target/Reward Ratios only to go after a handful of 20pips?”...you may ask me.

“YES! We studied Market’s Mechanics and Technical Analysis Basics so we can increase our
odds to make our Daily Pips FAST and EASY , every day. We have a System in place and this
System guarantees just that. Because it is based on consistency and repetitive incremental
progress, like KAIZEN, having factored in it the element of explosive exponential growth. And
because our TIME is irreplaceable, FXHOLIC Trading System is designed so that it requires the
least of our time.”

One of the Dalai Lama's favorite stories is of a Zen disciple who left his
village to live in the neighbouring forest and seek enlightenment.

He devoted himself to being able to walk on water. Finally, after many

years of practice, the disciple mastered the technique.
Then one day, he saw his Zen Master walking by. Keen to demonstrate
his mastery, the disciple leapt to his feet and proceeded to walk across the
nearby river whilst his Master watched.
"How long did it take you to learn to walk on water?" asked the Zen
Master.
"Twenty seven years," the disciple replied proudly.
"You idiot," the Zen Master said. "For a few pennies you could have taken
the ferry."

Sometimes it's worth questioning what we're seeking to

accomplish with our time on Earth, if it's worth it, and if it is,
 ask ourselves are we doing the right things to fulfill our
desires.

As the Prison Governor said to the convict who had scaled the prison wall
only to find himself in the Prison Officers Staff Quarters, "You should
have checked that your ladder was up against the right wall."

Sunil Bali’s Blog

Managing time wisely on our way to Success, with FOREX Trading as our vehicle, it is essential
to follow our Trading Plan and stick to our DAILY PIPS TARGET religiously.

So an FXHOLIC’s Trading Style is actually that of a Scalper, who makes an extensive Study of
at least three pairs before picking the one which will give the Daily Pips.

The FXHOLIC :

1. Has a Trading Plan and knows exactly the Maximum Risk that can be taken and the Daily
Pips Target that should be pursued. Has also estimated the Ideal Reward to go for. (must
be double the Risk and Triple/Quadruple the Daily Pips Target)
2. Uses Bollinger Bands and Vectors to specify the Dynamic Bullish and Bearish Price
Action Zones, drawing Colored Shapes on the Chart.
3. Does the necessary “homework” for at least 3 Pairs so that picks the lower-risk/higher-
profitability potential trade of the three
4. WAITS as much as necessary for ALL Entry Criteria to be met because is aware of the
fact that WAITING OUTSIDE of a Trade instead of WAITING INSIDE it, makes all the
difference between a successful trader and a trader who heads to financial disaster.
5. Seeks the highest Time-Frame with a Low-Risk Entry so that the move has increased
statistical significance
6. Prepares both BUY and SELL Scenarios sets of Entry-SL Placement-Stay In/Exit Criteria
making sure both Scenarios guarantee a Reward at least triple the Daily Pips Target
7. Prefers to trade “Continuation” Moves rather than “Corrections”.
8. Always Enters with MOMENTUM.
9. Is “Generous” with SL Placement which means FXHOLIC is flexible with placing SL a
bit further than the predetermined RISK level and yes, it sounds paradoxical after all
we’ve discussed but remember that FXHOLIC focuses on the DAILY PIPS TARGET
and sees nothing else and “Stingy” with TP Placement which is STRICTLY at DAILY
PIPS TARGET +Broker’s Spread. So if ideal DAILY PIPS TARGET is 20pips,
FXHOLIC’s TP, NEVER EVER exceeds 25pips for any reason. FXHOLIC seeks to
have KUMO between SL and ENTRY, ideally on the TF of the Trade Setup.
 10. Aims at pocketing the DAILY PIPS in no more time than a few hours -sometimes less
than 2hours- with the minimum attention required and that’s why all the knowledge of
Technical Analysis, the proper study of the Market and the iron discipline to the System
are extremely important.
11. Prefers to study thoroughly about taking two SCALPS of 10pips each that one SCALP of
40pips because knows how to bent the odds to her/his favor pursuing increased
possibilities which are close to certainties, rather than being at the mercy of Market’s
whims.
12. Applies the most suitable Strategy per case which means, lets the Market lead and just
follows getting adjusted to Market’s Conditions.
13. Always has chosen one of the 3 Contingency Plans in case Market turns against position
and KNOWS what to do before even taking the Trade :
● Letting SL get hit
● Trailing SL inside the red zone till Price resumes its trend to the trade’s
direction
● Hedging
14. Follows the same TRADING ROUTINE every day because it has become a
subconscious automated process.

USDCHF : FXholic’s Trade Setup Study

EURJPY : FXholic’s Trade Setup Study
ADUSD : FXholic’s Trade Setup Study
● Let me see your Scars

“On more than 60 occasions Richie McCaw has required stitches in his
eyebrows. He's also broken his cheekbones over a dozen times.
McCaw played through the last three matches of a tournament with a
broken foot and numerous painkilling injections.
The tournament was the 2011 World Cup, which he lifted as captain of the
New Zealand Rugby team, aka the All Blacks.
Last night, McCaw led the All Blacks to victory in the 2015 World Cup.

McCaw is
unquestionably
one of the
world's greatest
ever rugby
players and has
won 131 of the
148 games he has
played for his
country.
 He thinks that having stitches is an occupational hazard of playing open
side flanker. A position which requires him to scavenge for the ball and put
his body on the line.
In McCaw's view pain is temporary, winning is permanent.
Dave Brailsford, Performance Director of the all conquering British
Olympic Cycling team introduced lactic tolerance training for his cyclists.
This consists of the cyclists cycling flat out until their legs feel as if they are
on fire, and then the real training starts to see how long they can keep
cycling.
Yes these are extreme examples of going the extra mile, but whatever you
want to achieve, there's a price to pay.
This may mean watching less television, working weekends, or sacrificing
your nights out. It means taking a risk and stepping outside your comfort
zone.
There's a price to pay if you want to achieve more, and there's a price to
pay for leaving things as they are.
Whatever you decide, just don't be upset by the results you didn't get, with
the work you didn't do.
Ps. There are no queues on the extra mile.”
from Sunil Bali’s Newsletter

Trading is a wild battle, not against the Markets but against your weaknesses. The battlefield is
not the Marketplace, it’s your mind.

There will be 300pips trades on your way but they will be the rare exceptions, not the rule. Look
at 300pips trades as Market’s Sirenes that will try to trap you to a false spiral of eventual heavy
losses and destruction. Don’t trust them. Don’t follow them.

Do your daily “mental exercise” setting up your three alternative Trades going for your DAILY
PIPS ONLY. Let it be your TRADING ROUTINE, your TRADING HABIT. Program your
Subconscious Mind into adopting this HABIT and following this ROUTINE religiously. This is
the only way that works.

Top Fitness Trainers’ motto is “No Pain, No Gain”. I find this motto surprisingly suitable to
FOREX Trading. There is “pain” involved in successful FOREX Trading. Just like the “pain”
involved towards transforming a flabby belly into “six pack abs”, it’s mostly about the critical
amount of time required in order for the repetitions to imprint the “pattern” into your
Subconscious Mind turning it into a habit. In fact, it’s the time needed by your brain to build
new neural synapses that will support the new “function” with minor input on your side in the
future. The “pain” involved is about availing a part of your limited Willpower to force yourself
to stay disciplined to the DAILY PIPS TARGET concept till you reach the stage of
“HABITUAL TRADING”.

-How fast will you reach that stage?

-It depends on your idiosyncrasy. The amount of time is different for each Trader. But I have
found out that the tipping point is the 4th Doubling of your Account’s Equity. If you quit before
reaching the 4th Doubling, FOREX is not for you. If you resist the “pain” of having to persevere
while progress seems insignificant and even 1st Doubling seems like “mission impossible”, if
you ignore the psychological scars of self-doubt and keep going, YOU ARE A WINNER MY
FRIEND! That’s why I suggest you start from $100 Seed Capital instead of $1000 and go
microtrading for the first 4 Doublings. It is already a tough battle to stay disciplined. At least
keep the level of risk minimum. By the time your 4th Doubling will be a fact, numbers won’t
really matter, nor scars because you’ll be the Master of the Game.

Your brain -as very succinctly Scott Adams writes- is a liquid computer and I would add that
this computer draws its unlimited potential by two facts, its ability to reprogram itself re-
designing its operative system on the go and its capacity to build functional structures that
support the materialization of anything imaginable.

Go ahead and RE-PROGRAM it!

PART 10: Red Account’s Recovery - HEDGING

Chapter 51 : HEDGING

What is HEDGING?

HEDGING is a sort of “balancing act” towards negating or minimizing RISK.

In FOREX Trading, if I take a BUY Trade but price starts falling aggressively, instead of letting
it hit my Stop-Loss, I have the option to open a SELL Position equal to my BUY one, -cancelling
BUY Position’s SL- and let price go as low as it pleases, without worrying for losses till it
resumes its uptrend and I’m back in the Game going for profits. The SELL Position will serve as
an active Stop-Loss which will negate any downward move’s effect to my account, below its
level. I will carefully have to close it as soon as price approaches it going UP again, at marginal
or zero profits and place again a proper Stop-Loss for the BUY Order.
In short, this is the only kind of HEDGING that works in FOREX, but due to the tremendous
amount of discipline it requires, this seemingly simple and easy to apply concept, should be
avoided as much as possible.

FXHOLIC Trader doesn’t really have to resort to HEDGING in any way and for any reason, but
theoretically, HEDGING should be one of Trader’s 3 Contingency Plans BEFORE Taking a
Trade and should have decided which of the three is willing and able to follow in case everything
goes wrong and price approaches Stop-Loss :

1. Let Stop-Loss get hit

2. Trail Stop-Loss towards “Red Zone” with the hope that price will resume its previous
trend -the desired one- after some minor fluctuations.
3. HEDGE Position

Below please find an approach to the definition of hedging by INVESTOPEDIA, one of the best
online resources regarding financial terms.

Hedging is often considered an advanced investing strategy, but the principles of

hedging are fairly simple. With the popularity - and accompanying criticism - of
hedge funds, the practice of hedging is becoming more widespread. Despite this, it is
still not widely understood.
SEE: A Beginner's Guide To Hedging
Everyday Hedges
Most people have, whether they know it or not, engaged in hedging. For example,
when you take out insurance to minimize the risk that an injury will erase your
income, or you buy life insurance to support your family in the case of your death,
this is a hedge.
You pay money in monthly sums for the coverage provided by an insurance company.
Although the textbook definition of hedging is an investment taken out to limit the risk
of another investment, insurance is an example of a real-world hedge.
Hedging by the Book
Hedging, in the Wall Street sense of the word, is best illustrated by example.
Imagine that you want to invest in the budding industry of bungee cord
manufacturing. You know of a company called Plummet that is revolutionizing the
materials and designs to make cords that are twice as good as its nearest competitor,
Drop, so you think that Plummet's share value will rise over the next month.
Unfortunately, the bungee cord manufacturing industry is always susceptible to
sudden changes in regulations and safety standards, meaning it is quite volatile. This
is called industry risk. Despite this, you believe in this company and you just want to
find a way to reduce the industry risk. In this case, you are going to hedge by going
longon Plummet while shorting its competitor, Drop. The value of the shares involved
will be $1,000 for each company.
 If the industry as a whole goes up, you make a profit on Plummet, but lose on Drop -
hopefully for a modest overall gain. If the industry takes a hit, for example if someone
dies bungee jumping, you lose money on Plummet but make money on Drop.
Basically, your overall profit, the profit from going long on Plummet, is minimized in
favor of less industry risk. This is sometimes called a pairs trade and it helps
investors gain a foothold in volatile industries or find companies in sectors that have
some kind of systematic risk.
SEE: Short Selling and When To Short A Stock
Expansion
Hedging has grown to encompass all areas of finance and business. For example, a
corporation may choose to build a factory in another country that it exports its
product to in order to hedge against currency risk. An investor can hedge his or her
long position with put options or a short seller can hedge a position though call
options. Futures contracts and other derivatives can be hedged with synthetic
instruments.
Basically, every investment has some form of a hedge. Besides protecting an investor
from various types of risk, it is believed that hedging makes the market run more
efficiently.
One clear example of this is when an investor purchases put options on a stock to
minimize downside risk. Suppose that an investor has 100 shares in a company and
that the company's stock has made a strong move from $25 to $50 over the last year.
The investor still likes the stock and its prospects looking forward, but is concerned
about the correction that could accompany such a strong move.
Instead of selling the shares, the investor can buy a single put option, which gives
him or her the right to sell 100 shares of the company at the exercise price before the
expiry date. If the investor buys the put option with an exercise price of $50 and an
expiry day three months in the future, he or she will be able to guarantee a sale price
of $50 no matter what happens to the stock over the next three months. The investor
simply pays the option premium, which essentially provides some insurance from
downside risk.
SEE: Prices Plunging? Buy A Put!

INVESTOPEDIA

Depending on Trader’s objectives, there are two Hedging Types :

■ Static/One Direction : Static is a Passive form of Hedging and it only
aims at stopping the bleeding. In this case we just open an equal and
opposite position to our Main one, cancelling its Stop-Loss.
If our Main Position is a BUY , we open a SELL (Hedging) Position
when SELL Scenario’s Criteria are all met on H4 TF and we see a valid
Bearish KUMO Breakout on M5 Time Frame, placing Hedging position’s
Stop-Loss above the KUMO on M5 Time-Frame. Ideally we want to
 close this position with 2 or 0 pips profits as soon as price goes UP again.
Worst Case Scenario is that price hits Hedging Position’s SL on its way
up. We’ll experience a small loss because we had entered from M5 Time-
Frame. In any case, as soon as Hedging Position is closed, either because
we closed it or because its Stop-Loss was hit, we immediately place a new
Stop-Loss for our Main BUY Position which we had cancelled when we
opened the Hedging Position.
If our Main Position is a SELL , we open a BUY (Hedging) Position
when BUY Scenario’s Criteria are all met on H4 TF and we see a valid
Bullish KUMO Breakout on M5 Time Frame, placing Hedging position’s
Stop-Loss below the KUMO on M5 Time-Frame. Ideally we want to
close this position with 2 or 0 pips profits as soon as price falls DOWN
again. Worst Case Scenario is that price hits Hedging Position’s SL on its
way down. We’ll experience a small loss because we had entered from M5
Time-Frame. In any case, as soon as Hedging Position is closed, either
because we closed it or because its Stop-Loss was hit, we immediately
place a new Stop-Loss for our Main SELL Position which we had
cancelled when we opened the Hedging Position.

■ Dynamic/Both Directions : Dynamic is an Active form of Hedging and

it consists of two Positions, a Hedging one following the Static Hedging
Rules and a Ninja one, which can be as small or as big as Trader wants -
according to her/his plan and Trade Management rules- with which,
Trader will do Scalping to BOTH Directions from M15 or M5 Time
Frame. While the Static Hedging aims at stopping the bleeding only, the
Dynamic Hedging Ninja Position, aims at making profits to both direction
as price is moving inside the HEDGING ZONE. Hedging Zone in case
our Main position is a BUY, is the price action zone below our Stop-Loss.
Hedging Zone in case our Main position is a SELL, is the price action
zone above our Stop-Loss.

Chapter 52 : Trading Paradox

I may shock you if I tell you that in the Markets it’s Mathematically impossible to lose money
whichever direction you enter at any given moment on the condition you are in control of the
timing and have a precise PLAN.
Two Traders, which we’ll call A and B, enter a trade on the same pair at the same time and price
level, with Trader A BUYING with a PLAN to trade the pair SCALPING from M15 TF going
for 25-30pips maximum, probably being an FXHOLIC and Trader B SELLING from H4 TF
going for a more ambitious Reward of 100pips trading the continuation of the downtrend.
Theoretically BOTH Traders are winners because -although they were positioned to opposite
directions, they both earned money from their trades.

But are they equally successful?

At a first glance, Trader A makes 70% less money than Trader B but Trader A made 30 pips in a
few minutes while it took Trader B many hours to make 100 pips, therefore it would be unfair to
compare the amounts of pips each made without using a unit of measure that has both pips and
time values factored in it.

That unit can be pips per minute or pips per hour : pips/min or pips/hour

Trader A made 2pips/min or 120pips/hour.

Trader B made 0.08pips/min or 5pips/hour.

Assuming that both Traders were monitoring their trades from the first till the last minute, it
seems that Trader B exchanged her/his time at a very cheap rate compared to Trader A.

Assuming that both Traders had set their trades and forgotten about them, Trader A had pips
turned into money in her/his Account 19hours and 45minutes sooner than Trader B did.

It appears to me that Trader A used more “brain power” -setting up a PLAN to grab the 30pips as
fast as possible, bending odds to her/his favor - than Trader B did.
What do you think?

Chapter 53 : 10 Common Deadly Mistakes

Below you’ll find a list with a few of the most common mistakes traders do
1. Jumping in the Trade without WAITING for ALL Entry Criteria to be met
2. Trading more than one pair simultaneously
3. Opening more positions while the first one is red
4. Exit with profits and RE-Enter right after to lose everything
5. BUY from Upper Bollinger Band or SELL from Lower Bollinger Band
6. Exit with losses before the SL is approached and without following particular
Stay In/Exit Criteria
7. Placing SL very close to Price Action especially when Scalping from M5/M15
Time-Frames where price volatility is much more intense and quite often
unpredictable
8. Bad Take-Profit Target placement
9. Trading the Correction from a big Time-Frame instead of a small one
10. Trailing Stop-Loss to the direction of the losses randomly (without any plan and
any proper Market’s Study in place)
Instead of just presenting the List, I thought it would be more valuable to give you a TABLE
with the Mistakes, their Causes and the Solutions so you don’t repeat them again.
PART 11 : Let’s Trade.

When we are about to take a Trade, we also decide whether it is going to be a SCALP, a Medium
Term or a Long Term Trade. The Trade Example that follows, of EURUSD on 28/05/15 is a
Medium to Long Term Trade and although it looks fascinating, it is not the kind of Trades you
should be after.

Why do I say that?

Because once you set your Trading Plan and determine your DAILY PIPS TARGET, you should
go for Little BORING Daily Trades that give you your DAILY PIPS as fast as possible so you
can avail most of your day towards LIVING YOUR LIFE instead of becoming an extension of
your Monitor checking the Charts in the middle of a meeting, while driving -never ever do that-
at the toilet, when you are in bed and probably even in your sleep...and that’s not a joke,
really...that’s a big tragedy.
But for Educational Purposes, I had to present such a type of Medium/Long Term Trade inside
the Book.

Below you’ll find a sequence of CHART SCREENSHOTS with my thoughts and decisions
before I take the Trade and once I took it, you’ll see me using a TABLE where I’ll be noting
what Candlesticks and my Technical Analysis Tools tell me so that I decide how to manage the
Trade.

When I’m in the Trade, the wisest thing to do is ...NOTHING.

Trade is not a physical activity, it’s a mental one. Just like we can’t push the Market to one
direction, we can’t make it move when it’s “sleeping” and we can’t force it to move faster
because it will move only as fast or as slow as it wants.

The “actions” we can take while the trade is in progress are :

● Trail SL
● Trail TP Target
● Cancel SL and open Hedging Position
● Add Position
● Exit

Because no Action should be based on hunches, instincts and intuition, there are CRITERIA we
should use such as our STAY IN /EXIT Criteria and there should be a methodology that helps us
manage the Trade as objectively as possible.
Using a TABLE as my Tools’ Signals Dashboard at any given moment -usually after a
candlestick CLOSES on the Time-Frame I took the Trade and monitor price from, has been
proven to be extremely effective, towards suppressing my “Emotional” Factor and I suggest you
create your own, replacing the Indicators with those who are your favorites.

On my TABLE, as you can see, I have placed all my Signals-Generating Tools on the left
Column and the next ones are Columns each one dedicated to a specific Signal :

● STAY IN : tool is telling me that price is moving with increased momentum to the
desired direction
● TRAIL SL : tool is telling me that I can minimize my risk or lock profits
● CORRECTION STARTS : tool is telling me that price is changing direction
● CHECK HIGHER TF : tool is telling me that on the specific Time-Frame there is a
possibility of reversal against my position so I should check the higher Time-Frame
where I may see that it’s just a minor correction
● EXIT : tool is telling me that price is moving against my position either going for a true
Reversal or for a deep Correction

You’ll notice that TP Trailing or SL Cancel/Open Hedging Position are missing from this
TABLE. I didn’t add them because they were not part of my Strategy. But you can add as many
Signals as you consider important for your Trade’s Objectives.

As I’ll be doing the Trade FOLLOW UP, I’ll be typing an “X” inside the cell corresponding to a
Signal given by a specific Tool. This way, I will not miss any Signal and I’ll be able to weigh
their significance. This way my decisions will be strictly based on Criteria.
We STAY OUT and WAIT for a new TRADE SETUP Opportunity.
HAVE
Chapter 54 : Iron Age
“The man who has to work for a living can’t be a citizen”
Aristotle

According to the Ancient Greek Historian, Hesiod, as mentioned in his “Works and Days”
there are in total 5 evolutionary genera -I’ll call them “Ages”- of mortal men as Olympian Gods
created them, starting from the Golden Age, the first generation of people who were enlightened
creatures with spiritual superiority [verse 109-110], then the Silver Age, the second generation
which was much inferior to the golden with no similarities in the body or the mind [verse 127-
129], next the Bronze Age which was even more primitive and less enlightened generation [verse
143-145], followed by the Heroic Age, the generation of the Heroes and Demigods, fairer and
more valiant [157-160] and last by the Iron Age, the generation of people that surrendered to
their passions, being dark and chthonic, marked by their materialistic orientation [verse 176].
which is the one we belong to.

Borrowing the basic philosophical concept of Hesiod’s approach, I should say that the Iron
Age Generation of people is the one that has chosen to set its whole life revolving around the
main axis of “income”, redefining value as the reflection of material wealth and possessions as
opposed to spiritual awareness and empowerment.
In our days our “iron” idiosyncrasy has reached all time highs. It is my sincere hope that
through this book I will effectively share my theoretical approach to the “perfect living” not in
sole terms of material wealth but in terms of superiority and quality on all levels of being and
behaving. And the reason I say “I’ll effectively share” is because just philosophizing on a
concept for the mere sake of stimulating some thinking is pointless, unless there is a way to
apply the conclusions in everyday life making a positive difference.
 Getting to the core of things I’ll first make an attempt to beat the System in its own field
which is about net worth and income sources. Next, I’ll decode the main pillars of “perfect
living” and will decompose the “Iron Era’s” facade aiming at finding our way back to our
“Golden Selves”.

Talking about Income most of us get the instant image of hard cash in their minds. If Income
is a river full of water, instead of focusing on the water, we should rather look for the sources.
But not all Income sources are created equal. Money, which is the end-product of an Income
Source, is energy. There are high-energy and low-energy Income Sources. Most of us have
never been taught in school or in our families about these two basic forms of Income and their
mechanics. Neither do we get to know as early as we should, that because Energy’s total
remains unaltered, low-Energy Income Sources have to balance their missing part of Energy by
sucking out our Life-Energy as it is translated in time we throw away.

-What do I mean by that?

-When you work for the money, you put Energy, Life-Energy which is your time, part of you in
the Income stream that comes as a result of your efforts. That’s why this type of Income is
Active Income and its Energy Level is low because it has already costed you a lot. Active
Income requires your active participation in the struggle of obtaining the material basis of your
Life such as food, shelter, clothes and all primal needs. Because it devours your time, there
simply is no extra Income or Life-Energy left for you to enjoy or channel to directions that serve
your higher existential purposes. When money works for you, you don’t have to put your Life-
Energy in the process and that’s why this form of Passive Income has higher Energy-Level
securing your material wealth while your time is freed up allowing you to enjoy Life, pursue
your personal growth and increase your spiritual awareness.

Therefore, all types of jobs, including professional activities where our time is being exchanged
for money, requiring our physical presence or involvement in order to be executed, are sources
of Active Income, the type of Income we should gradually eradicate from our life replacing it by
Passive Income.

Successful FOREX Trading is a source of Active Income.

 Actually, it can’t get any more
active than that since it
requires our physical
involvement, sometimes at the
degree of getting glued to our
monitor. In a few words, if we
don’t trade we make no
money. But from all the
Active Income Sources,
FOREX Trading is the one that
can help you transit to the side
of Passive Income Sources
faster. It can be your “stepping
stone” to the other side of life.

If we look at the two

distinctive forms of Income, Active and Passive closer, we’ll realize that within the Social Frame
of modern world’s System it’s all about Ownership or No Ownership. There is something
common to most successful people you know which is missing or neglected by the unsuccessful
ones and that is Ownership.

You’ve got to own something such as a home, a business, a piece of art, a book, an invention, a
song, a piece of land, a piece of software, an app, precious metals, coins, stocks, bonds, rights, a
domain name, a website, a design, a formula...and the list goes on...in order to be in control of
your life and your financial destiny, placing yourself to the advantageous position of eventually
replacing all your Active Income Sources by Passive Income ones.

Chapter 55 : Full Time Trader vs Full Time Investor

The #1 guideline to success is you must be in business for yourself. When you work for someone
else, you sell your time at wholesale to your employer, who then re-sells it at retail to the
customer.

J. Paul Getty (1892 - 1976)

I receive a lot of emails from my APPS Users telling me they want to learn FOREX Trading so
well, they can quit their day-jobs and become Full-Time Traders and I get instantly sad.

-Why?

-Because FOREX is not a source of Passive Income. You trade, you make money -ideally-. You
don’t trade, you don’t make money. FOREX Trading should be our STEPPING-STONE to
FREEDOM. It should be the medium, not the purpose.

Your purpose is to become a Full Time Investor, having your money working for you really
hard, because you’ll have the right Systems in place -Business Models in most cases- which will
guarantee profitability FOR YOU...WITHOUT YOU.

And because all this sounds quite theoretical and you know by now that I’m all about applying
strategies and executing plans, here is the plan.

Before you start LIVE Trading, you must have decided which is going to be your PASSIVE
INCOME Vehicle or set of Vehicles. You also have to make an actual “plan of action steps” to
get this Vehicle set up and working for you. Most Passive Income Vehicles need Capital and
Time before they take off. But if you have more than enough Starting Up Capital, time curve
may be cut too short and here is where FOREX Earnings will play the key role.

Below I’m giving you some EXAMPLES of Passive Income Vehicles you’ll need Capital for
and this Capital will be generated through your profitable FOREX Trades. Any of these Passive
Income Vehicles can make you filthy rich on the condition you’ll plan it well and will set up a
team of great collaborators who will run the business for you through delegation or outsourcing,
literally on Auto-Pilot. Choose your Team’s Members carefully because this is of essential
importance to the whole venture’s outcome. Mark Zuckenberg of FACEBOOK, said that he’s
only hiring people he’d gladly work for. I find this principle adamant, so keep it in mind while
building your Team. Your FOREX Account, will be your Private Venture Capital, sort of a
Private Bank which will fund the Business till it takes off.

EXAMPLE #1

Real Estate Wholesaler. This Business Model is actually about Flipping Properties you Buy
Cheap, for a healthy margin that still keeps their price attractive to Buyers. You’ll need Capital
to Buy the first Properties. TIP : first find the Buyer who is ready to Buy a Property and then
Buy it. Flipping must take place through a semi-automated process which you should have in
place already having taken care of all Bureaucratic, Legal, Tax and Accounting parts of it.
EXAMPLE #2

Domainer. Just like there are Real Estate Properties in the “bricks & mortar” world, there are
also Virtual Real Estate Properties in Cyberspace, the world of Internet. A Domain Name is on
the web what a piece of land is in Real World. You can “build” any type of Online Business
Model on it varying from a simple blog, to an e-shop or a business directory and these forms
represent just a tiny scratch at the surface of the web iceberg’s top. There is absolutely no limit to
what you can do online being a successful web-preneur. Just dig it and then FOCUS on one and
only one thing which you’ll channel all your effort to. But even if you don’t want to go through
the multiple and time-consuming route of specializing on something, study all you can find on
DOMAINING and start flipping Domains instead of running any kind of Online Business. It will
most possibly blow your mind if I tell you that I had registered fashion-related .GR domain back
in 2011 at no more than 20eur for the first two years and a Buyer from Germany purchased the
Domain at $3000 in January 2013. It blew my mind anyway. And then I tried to convince
myself it was not a random coincidence and flipped Domains I registered at 20eur each right
after I had spotted the interested Buyer, at 350eur and 500eur within no more than 5 working
days. So I can’t recommend this kind of business strongly enough. And it’s certainly worth any
time or money invested in getting yourself properly educated on the subject buying books and
courses on Domaining and Website-Flipping. FOREX Earnings will definitely give you a
startup advantage so that you structure a Business with a team of talented people who will do the
selling -according to the System you’ll have trained them on- while you’ll only care about
managing your Domains Portfolio. To my opinion, this type of Business can be extremely
profitable if it is locally oriented to your Country or even Region.

EXAMPLE #3

Producer /Exporter. Food will never be enough to feed all the people and people will never
stop needing food on a daily basis. I remember the two Spanish Girls who came to Greece,
bought a small piece of land with a little cottage in it, in a village, released some hen in there to
wander around free all day and were selling eggs starting from local Grocery Stores and then
scaling it up to Medium Sized Super-Market Chains. Next year, girls were driving a luxurious
sport car instead of the little wreck they had as newcomers and rumors started making circles
around the local community about their clubbing adventures at the nearest city almost every
night. Everyone was wondering what was their secret to success. But their secret was there in
plain sight inside their fenced yard, wandering around all day laying eggs by next morning. This
may ignite your farmer’s or industrialist’s hidden instincts but don’t let it go un-noticed because
if you decide to enter the Food Industry for instance by producing your own feta-cheese,
yoghurt, olive oil or wine -I’m mentioning typical Greek products, you can replace them with
products of your country- or go for handcrafts like the crocheted handbags Irene Papadopoulou
from Greece turned into fashion must-haves , or even go for more conventional items like
Traditional Furniture, Security Systems or even Toys, you’ll need Start Up Capital. Here is
where your FOREX Earnings will offer you the wings to fly instead of enslaving yourself and
your Business to the Bank. Just commit yourself to the idea you want to pursue, work on a very
precise and well-studied Business Plan and then submit it to yourself for Funding. As soon as
your FOREX Trading Earnings can execute the Funding part, “rubber can hit the road”.

EXAMPLE #4

Fulfilled by AMAZON Vendor of Private Label Items/Products This Passive Income

Vehicle, although it’s basically one of the OnLine Business Models, is too big not to be
mentioned separately. Selling products on the digital shelves of world’s biggest e-Store with
hundreds of millions of Customers’ credit cards on file, is an EVERGREEN Business and you
may be shocked to find out that it is not saturated for two main reasons :

a. People are not truly committed to make the effort required on a consistent basis for the
Business to flourish. They quit too easily too soon. As we say in Greece “if you don’t
get your @ss wet, you won’t eat fish”.
b. People get involved with enthusiasm but have the wrong mentality of a “knows it all”
narrow minded person. So they don’t get properly educated on how to get the
competitive edge on key-points of the process like selling a product under YOUR OWN
PRIVATE LABEL instead of manufacturer’s.

But if you are determined to pursue this model, no matter if you’re going to sell yoga mattresses
or kitchen knives, which will be shipped directly from the Chinese Factory to AMAZON’s
Warehouses and from there to end customer, profit potential can climb up to the range of tenths
of thousands of Dollars per month within a few months.

EXAMPLE #5

“How To”Books Author /”How To”VIDEOS Producer / “How To” Courses Creator My
daughter wanted to learn the choreography of a hip-hop dance and she committed the time and
effort to learn it via YouTube watching and replaying the VIDEO-Tutorials till she mastered it. I
personally know successful info-Marketers from the US who are making millions being in the
dog-training “How to” Industry. In fact, you don’t have to be a Dog Trainer or a famous Hip-
Hop Dancer to successfully sell info-products such as Books or Courses on the web. You may
know very well how to grow tomatoes at your balcony or how to make ten different types of
bread or how to increase retail sales in a shoes store or a thousand other things that might seem
unimportant to you but may be very helpful to thousands or even millions of people. A young
lady is posting a Series of VIDEOS on YouTube where her little kids are opening toys
unwrapping their packaging. They’re doing just that and they have attracted hundreds of
thousands of viewers and tons of money from Ads showing up on their channel. A couple of
years ago, a young woman decided to write a Book with recipes for couples in love. Her mother
helped her with the recipes. The book became AMAZON Best Seller. And there are countless
examples of Best Sellers that just had something really useful to say or were making a smart
twist to something as broad as cooking recipes. Your hobby about identifying and collecting
herbs that can become home remedies to certain health conditions, or your passion about writing
stories for kids also illustrating them, has the power to make you a Best Selling Author and your
FOREX earnings can help you pay for the best book Editors, best graphic Designers for your
Book’s cover and artwork, and the best Marketing Campaigns for its promotion.

EXAMPLE #6

Artist Not all of us were born with natural singing, dancing, painting or sculpting talents, but if
you really have the special gift of an artistic inclination, Web, the absolute Equalizer can help
you bring it to the attention of millions of people. Normally, the process takes time and the right
connections to the right people as well as a lot of luck regarding the timing and of
course….perseverance. But your FOREX money can help you hire the best publicist who will
cut the long process short for you. That’s a very general reference for a vast range of artistic
endeavors but you get my point.

EXAMPLE #7

Software Developer Bill Gates, when asked about his “secret” to success he said that there is no
“secret” other than working hard for years and then after creating Windows, knocking the
“doors” of around 1200 potential clients, 1000 of whom said “NO” about 190 said “MAYBE”
and only 10 said “YES” making him a Billionaire. And if that sounds simplistic, think again
about the commitment and persistence it takes to consistently knock 1200 doors, having almost
1990 of them slammed on your face. If you are a Software Developer, your FOREX money will
make the path of persistence smoother knowing that you are financially secure till your Software
Business takes off.

EXAMPLE #8

Mobile APPS Developer Back in April 2013 when I first published my APP, there were more
than 500K APPS available through iTunes Store only, let alone GOOGLE Play, AMAZON
Kindle , Blackberry or Windows Platforms. Today we’re talking about 1.5Million APPS
published on iTunes alone. My APP has a “publishing” profile but the vast majority of the APPS
are either games or utility sort of APPS that function based on the ADS Revenue Model. Their
goal is to become viral and attract as many installs as possible so they can serve their ads to a
higher number of “eyeballs”. You have no idea how easy it is to have an excellent MOB APP
Developer build the APP you want. The hard part is not about building the APP. It’s about
making an effective “Research & Copy” Plan. That means you must be wandering inside the
iTunes Store for days if not months in a row gathering data about the most popular APPS on
certain Categories. Then you must pick the Category you have stronger interest in. Once you
pick the Category, you study the #1 APP on this, inside out and outside in. Then you make sure
you hire a Brand-Building Agency -your FOREX money will be real darling here- which will
create a Killer-Brand for your APP, you also hire a graphics artist who will design a better icon
and nicer graphics for your APP and if you’re not very familiar with SEO , a SEO expert will
make sure you rank better than #1 APP for the same or better keywords. If you do your
homework right, you may secure a decent 5 digits monthly income within the first year since
your APP gets published from ADS Revenue alone. This is the kind of Passive Income that
can’t get any more Passive.

EXAMPLE #9
Vacation Services Package offered to Affluent Baby-Boomers
This is a very profitable Business Model based on the super-powerful Marketing approach
presented by Dan Kennedy in his book “No B.S. Marketing To the Affluent: No Holds Barred
Kick Butt Take No Prisoners Guide to Getting Really Rich”
The main concept is that a whole generation of Baby-Boomers feel and are too young to retire
and want to enjoy a lifestyle their parents couldn’t even think of, enjoying vacations with all the
extras affluent can afford. In fact, there is no money-making opportunity if the product or
service you offer is something your potential clients can’t pay for. For this type of clientele,
money is not an issue, but in order to get them to open their wallets, you have to first get into
their shoes. They’re “experience-hunters” and that means you have to capture their wants and
desires and design the package that resonates with their ideal lifestyle image offering it wrapped
with a marketing message that will stroke their self-image.

EXAMPLE #10

Home Care Services Package offered to Affluent Senior Clients

For as long as we remain humans and family bonds are the foundation of a healthy society,
taking care of our aging parents comes without saying. We definitely want to offer them the best
health care there is but between wanting and being able to do it, there is a whole ocean of
frustration, at least while we remain trapped to a carnivorous working week. And that’s where
this particular type of Business Model fits in.

EXAMPLE #11
Online or Offline MEMBERSHIP CLUB

Membership CLUBS draw their passive income generating power from the sheer fact that they
offer to their Members much more than the products or services and that is a sense of belonging
to a community, going far beyond the sole purpose of CLUB’s creation at first place. As the
Ancient Greek Philosopher, Aristotle, said “Man is a Social being”. We love to be part of a
Community we share common interests or passions with because it’s an exhilarating experience.
You don’t have to be an expert on a subject to create a great Community many people will want
to join. It can be a Membership CLUB for mothers, for single parents, for handcrafts enthusiasts,
for bodybuilders, for windsurfers, for videogames nerds, for chess fanatics, for preppers, for pug
owners, for yoga addicts, for wine lovers and the list goes on. Think of your interests and your
passions, make a research on the dynamics of the Community Theme you’re considering starting
and go for it.

EXAMPLE #12

Specialized Services offered to Local Businesses (i.e. INSTAGRAM Marketing)

Specialization is the keyword here. There is a non-ending range of Services each one of which
has a stand-alone potential to catapult a business’s sales to the sky starting from zero ground.
You have to invest time and effort in studying a specific service’s mechanics and then build a
team of outsourcers who will both take care of sales and rendered services, but being in the
know, you’ll be able to manage both with minimum time on your side. For example, charging
$200/month for Instagram Marketing to local Businesses, it only takes 50 local Businesses to hit
the monthly revenue mark of $10K. Given the fact that there is a plethora of marketing
automation tools, you only need two talented outsourcers who will be managing 25 Accounts
each at $1000-$1500 per month. I know these monthly paychecks sound a bit high, but I’m
against enslaving people. I believe motivation is the ultimate performance booster. Besides,
having a net profit of $7000 per month from a scalable and expandable business with associates
that love to work with you, is not a bad scenario at all. Your Clients will appreciate the quality
of the Service as well and you’ll build an excellent reputation.

EXAMPLE #13

Angel Investor

I'd rather have 1% of the effort of 100 men than 100% of my own effort.

J. Paul Getty (1892 - 1976)

The main concept here is about copying Warren Buffett investing your FOREX Earned Money
to other people’s businesses. Again, you should build a team of stellar Associates who will be
filtering out Business Plans and help you get a crystal clear picture of any Business you might
consider investing into.

Chapter 56 : Redefining Success

“This week I spoke at an Engineering Conference at The Theatre of Dreams, aka

Manchester United's ground Old Trafford, and was asked what I think are the Top 3
traits required to engineer your dreams into coming true.

(sign on the toilet seat of my Virgin train to Manchester)

I replied:
1. A wish bone - You can't hit a target you can't see. Having a clear vision of what
you wish for keeps you on the right path.
2. A back bone - to have faith in yourself and to keep going when you're going
through hell, and
3. A funny bone - laughter is the shortest distance between two people, and given
that great relationships drive business and life, putting a smile on people's
faces is both an enjoyable and profitable strategy. Regardless, don't you find
that people with a good sense of humour have a better sense of life?
After having undertaken many years of research into how to lead a "wonderful life", The
Times columnist and Cambridge University psychologist Dr. Nick Bayliss concludes that
Bruce Springsteen was wrong; we humans weren't born to run. "We were born to have
 fun. Because when we're having fun, we infect others with the possibility virus and
inspire them to do wonderful things and live wonderful lives."
So how about you go fun yourself, infect others with the possibility virus, and live happily
ever laughter? “
From Sunil Bali’s Newsletter
Although there is no specific definition of success because it’s a “chameleon” status taking a
different shape for each person, I’ll try to describe its main pillars which are common to all of its
variations.

Success is an attitude about yourself, life and people.

You can track “success” on a personal level when you cherish your yesterday, crave your
tomorrow and relish your today making the most of it. Success is the result of a series of
processes. It’s the status of absolute peace of mind, sense of security, freedom to manage your
time and the ability to diffuse your positive energy to a broad range of people you can influence
making a big difference in their lives. It is about waking up with a sense of empowerment,
excited by the potential of the new day and going to bed feeling grateful, blessed and content.

You are successful once you have secured a dreamy lifestyle for you and your loved ones and
have the power to leave your positive mark in the world giving great value to many people.

I will not use the greek word “philanthropist” which has been unsuccessfully used by people
who have very poor knowledge of greek language to describe people who do charitable acts
towards others.

Philanthropist means philos + anthropos. Philos means friend. Anthropos means human. Being
a friend of humans sounds extremely hypocritical and is an insult to use this term for other
persons as if you are not one. It’s similar to being an animal lover. It presupposes that you are
not an animal. Although we may love animals a lot and even kiss our pets in the mouth and have
them sleeping on our lap being considered “family members”, our “love” for them goes so far as
having them properly fed, cleaned and taken care of. This is not the kind of “love” we should
show to other persons.

I will replace the ugly and inappropriate term “philanthropist” by the greek word for human
which is “anthropos” instead.

Greek Language is the only Conceptual Language in the world which means that in Greek, the
signifier (name) contains beyond any misinterpretation the signified (meaning). In Plato’s
dialogue “Kratylos”, Socrates replying to Hermogenes says :
 ...ο άνθρωπος σωστά ονομάστηκε «άνθρωπος», διότι είναι το μοναδικό ζώον, το οποίον
«αναθρεί ά όπωπε», παρατηρεί δηλαδή με μεγάλη προσοχή ό,τι έχει δεί…

which means,

…”anthropos” (human) was very correctly named “anthropos” because is the only
animal that “observes with great attention, contemplates and talks about what it has
seen”...

Being a true “anthropos” means you reach out to make a difference in other people’s lives
treating them as reflections of yourself you have empathy for, not as pets you’re sympathetic to.

Pets need food, shelter, someone to offer them caresses-time and playtime. Pets have no plans
and dreams. They have no ideas and aspirations. These are human traits.

Truly caring for other people being “anthropos” and having the power to make a significant
difference in their lives, means you inspire, guide and facilitate them to materialize their dreams.
It means you nurture their psyche, not just their body. And since psyche is a high-energy entity,
what you actually do by being an “anthropos” is making sure that energy flows free and is being
routed to higher levels of existence.

Now, to reach Success so you can be and do all described above, you have to “increase your
smiles per hour” -as psychologist Professor Barbara Fredrickson suggests- and stay disciplined
to a set of rules that the vast majority of people ignore or find it hard to consistently comply with.

First, let me share with you a fantastic article on “smiling” written by Sunil Bali:

In her book "Love 2.0", Fredrickson concludes that to go further in life

you need to increase your smiles per hour. She argues that over-
thinking and seriousness is a disease that not only stifles creativity and
problem solving, but is also detrimental to your health.

As Einstein said, "I never made one of my discoveries through the process
of rational thinking."

Fredrickson’s prescription to increase your happiness is quite simple:

Give people a piece of your heart rather than a piece of your mind.

UCLA cardiologist Professor Dean Ornish goes further and writes in his
book "Love and Survival", that “no other factor in medicine, not diet, not
smoking, not exercise, not stress, not genetics, not drugs, not surgery,
affects our health, and quality and length of life more than feeling loved
 and cared for. The best medicine for the heart is love. If you find it’s not
working, increase the dose.”

When asked for his No. 1 beauty tip Ornish’s colleague, UCLA Professor of
Plastic Surgery, Brian Boyd replied, “Just smile and be yourself. Being
authentic and comfortable in your own skin is the most powerful
aphrodisiac known to mankind.”

I’ll leave the last word on the subject to the great playwright Samuel
Beckett, who summed it up perfectly when he said, “Dance first, think
later. It’s the natural order.”

from Sunil Bali’s Blog

-And how do you stay disciplined to Success Set of Rules?

-By copying already successful people and by doing it on an EVERYDAY basis, not just
once.

In the Resources Section of the Book, you’ll find the links to an anthology of YouTube
VIDEOS presenting the 10 rules of success of legendary people such as the late Steve Jobs,
Warren Buffett, Bill Gates and Donald Trump.

Having a look at these rules, you’ll be amazed to realize that there is a common PATTERN
for all wildly successful people that boils down to a handful of principles :

● wise time management

● wise money management
● leadership team management
● persistence
● focus
● association/influence/mentorship of successful people
● definiteness of purpose
● sense of humor
● ownership

We all know inventor, scientist and all around genius Albert Einstein was one successful
guy, but what most of us don't realize is that it took a lot of hard work for him to get
there. Einstein was a classic late bloomer and didn't come into the success that we all
know him for until he was near middle age. Einstein's success is a story of perseverance
and the belief that you have something to contribute to the world, no matter how many
times others tell you that you don't. Let's take a look at some of the lessons today's
business community can take from the life of one Albert Einstein.
Thinking outside the box

Einstein is well known for his incredible scientific theories that literally invented whole
new fields of science, but what made Einstein such an incredible mind around his peers
was the fact that he could look at a problem that had baffled scientists for generations
and almost immediately look at the problem from a new perspective. He might not come
up with the answer right away, but he could break start the journey down a new path.
Today, we call this 'thinking outside the box.' While we may never accomplish something
so grand, the ability to look at problems from new and interesting perspectives is
incredibly valuable in today's workplace. Every day, businesses both big and small take
on problems that they have been wrestling with for years, and if you can inject something
new into that conversation, you will prove yourself to be an asset your company can't live
without.

Don't ever give up

Just like Thomas Edison,

success didn't come right
away for Albert Einstein. He
tried to forward some rough
drafts of his scientific theories
earlier on in his career, and
they were either summarily
ignored or brushed off as
incomplete or just plain
impossible. The truth is that
most professors and "experts"
who viewed his early work were likely terrified by it or they simply didn't have the
capacity to understand it. Instead of giving up, Einstein went back to the drawing board
and refined his theories. When he was done, they were simply irrefutable and are now
known verbatim by most of the earth's population. This incredible commitment to his
work should serve as inspiration to not only businessmen and women, but to anyone who
has ever tried and failed at anything. Although we may never have an idea as grand as
the ones he did, that doesn't mean we can't impact society with our work if we just try
hard enough.

Sense of humor
 Probably the best known picture of Einstein features him with his tongue out. It showed
that even someone labeled the smartest person in the world can have a sense of humor
and not take themselves so seriously. In the highly competitive world of business, it is
extremely important to know when to push yourself away from your desk and have a good
time. Besides, what good is the good life if you are constantly at work?

Success Secrets of Albert Einstein Documentary

Financial Success and success in Life are like the “chicken & the egg” riddle to many. For some
people, Financial Success leads to Success in Life but it is my opinion that Success being an
attitude that comes from within , leads to a process of re-designing your whole life way before
you reach Financial Success threshold and I don’t think it can be otherwise. Without the right
mindset and self-image you can’t hit big figures with your Trading or any other venture.

In the RESOURCES Section, you’ll find the link to a Video with a list of 10 secrets to achieve
Financial Success with your Trading posted by the “Institute of Trading”. It’s not a bad idea
checking it out although I’m sure you’ll find a lot of common points with the ones highlighted so
far here.

Because SUCCESS is practically a subjective state of being and can’t be measured with a
universal unit, I guess the best way to get closer to its definition, is by linking success with the
results we experience in our life making us happy. And here is my favorite “HAPPINESS
FORMULA” as presented by Scott Adams in his book “How to fail at almost everything and still
win big” :

Eat right.
Exercise.
Get enough sleep.
Imagine an incredible future (even if you don’t believe it).
Work toward a flexible schedule.
Do things you can steadily improve at.
Help others (if you’ve already helped yourself)
Reduce daily decisions to routine.

Chapter 57 : Selfishness - Creating Wealth

There is an erroneous perception about extremely successful people being selfish considering
selfishness a bad thing. My personal opinion is that you’ve got to be selfish till you stand on
your two feet being financially independent and strong. If you don’t focus on your own priorities
and goals, you’ll never reach them and that means you’ll never be able to help yourself out of the
mediocrity life-consuming pit. If you don’t help yourself to become strong, you’ll never be able
to help others materialize their dreams and fulfill their potential.

It sounds like a paradox but it is plain logic.

In this chapter I was planning to give you a Roadmap towards building your wealth, but due to
the hurricane of dangerous for the humanity events taking place in November 2015, I have made
some adjustments to the points I’d like to highlight here.

In times of peace, the ideal wealth building model goes like this :

● You create a lifestyle support pillow of six months

● Then you grow the support pillow up to six years
● Then you focus on the perpetual growth of your Passive Income streams
● Then you create Business Models that aim at helping other people channeling to them
70% of your Passive Income net worth while reinvesting 30% of it to your net worth
generating assets (precious metals, bonds, stocks, sureties, rights and properties)

Unfortunately, it seems like we’re entering a horrible period in human history and Wealth-
Building instantly loses its meaning when human life and freedom are at stake.

Your number one priority right now should be the survival of you and your family in case of an
extremely bad scenario happening. I will not give any name to the bad scenario because I like to
hope in the angel all humans carry inside rather in the evil that prevails within a few.

First you’re going to need a safe shelter, where water and food supplies will be enough to
support your survival for months if not years. In case you don’t have your own little farmland
away from urban centers, where you have your own well, can grow your own plants, have your
chicken a few cows or sheep and the minimum safety measures, this is your next goal after
having secured the first six months of crisis.

For the first six months of crisis keep in mind that most paper currencies may be out of value.
That’s why you should start accumulating today, low value silver coins that could be easily used
during everyday minor transactions when you’ll need to buy supplies. Once your silver coins
stock reaches a satisfactory level, you can go for golden coins.

A site where you can buy silver and golden coins from is http://apmex.com but you can also
check eBay offers.
Visit preppers sites in order to make a list of necessary supplies you should have in your
warehouse or basement in case of an unexpected bad scenario.

Living in your own farmland should be your ultimate goal in both war and peace times. If our
prayers are answered, no bad scenario will go through so your FOREX Success money will help
you grow your silver and golden coins reserves while building or funding Business Models that
will help more people on their way to Financial Independence.

I highly recommend you to order Porter Stansberry’s Report from AMAZON Titled “America
2020 : the Survival Blueprint Updated”

Chapter 58 : The Pool Effect & Parkinson’s Law

“Money is like manure. You have to spread it around or it smells.”

J. Paul Getty

The hall was full of some of world’s best web marketers and the next speaker to step at the
podium was Mark Joyner, the author of “Simple.ology”, an iconic figure.

The lights went off and the projector beamed a white circle of light on the Board where we could
read the phrase “How High is High Enough?”

And then I attended one of the most life-changing speeches ever.

Mark Joyner made a rhetoric question to us :

“If you were swimming and playing, having a great time in a pool, would it make any difference
to you if the pool’s depth would be 3 or 30 meters?”

We all mumbled in one voice : NO!

And he continued …”Then you have to determine the depth of the pool that is enough to make
you happy and find out ways to make more people happy with the rest of the water which makes
no difference to you anyway”.

He went on telling us how important it is to keep a record for all our daily expenses for a month
and then sit down and estimate which are the safety and then the pleasure pillows of spending,
that can frame and maintain the lifestyle we want.

I can’t stress enough how life changing that exercise was, so I highly recommend it to you. Keep
a little notebook in your pocket and write down every expense you make on a Daily Basis,
dedicating one page per day. At the end of the month, you’ll have the absolutely clear picture of
your spending habits.

This will allow you to start by BREAKING PARKINSON’S LAW and by doing so you’ll be on
your way to Financial Independence. What is Parkinson’s Law about? Below you’ll find more
about it presented by Brian Tracy, a Financial Success Author and Coach:
Why People Succeed or Fail
Parkinson’s Law is one of the best known and the most important laws of money and
wealth accumulation. It was developed by English writer C. Northcote Parkinson many
years ago and it explains why most people retire poor.
The Way the Law Works
This law says that, no matter how much money people earn, they tend to spend the entire
amount and a little bit more besides. Their expenses rise in lockstep with their earnings.
Many people are earning today several times what they were earning at their first jobs.
But somehow, they seem to need every single penny to maintain their current lifestyles.
No matter how much they make, there never seems to be enough.
The Key to Financial Success
The first corollary of Parkinson’s Law says: "Financial independence comes from
violating Parkinson’s Law."
Parkinson’s Law explains the trap that most people fall into. This is the reason for debt,
money worries and financial frustration. It is only when you develop sufficient willpower
to resist the powerful urge to spend everything you make that you begin to accumulate
money and move ahead of the crowd.
Become financially independent with Business Success Made Simple Training Kit
Slow Down Your Spending
The second corollary of Parkinson’s Law is: "If you allow your expenses to increase at a
slower rate than your earnings, and you save or invest the difference, you will become
financially independent in your working lifetime."
This is the key. I call it the "wedge." If you can drive a wedge between your increasing
earnings and the increasing costs of your lifestyle, and then save and invest the
difference, you can continue to improve your lifestyle as you make more money. By
consciously violating Parkinson’s Law, you will eventually become financially
independent.
Action Exercises
Here are two things you can do to apply this law immediately:
First, imagine that your financial life is like a failing company that you have taken over.
Institute an immediate financial freeze. Halt all non-essential expenses. Draw up a
budget of your fixed, unavoidable costs per month and resolve to limit your expenditures
temporarily to these amounts.
Carefully examine every expense. Question it as though you were analyzing someone
else’s expenses. Look for ways to economize or cut back. Aim for a minimum of a 10
percent reduction in your living costs over the next three months.
Second, resolve to save and invest 50 percent of any increase you receive in your
earnings from any source. Learn to live on the rest. This still leaves you the other 50
percent to do with as you desire. Do this for the rest of your career.
 Brian Tracy

Before reaching the point of being able to dramatically improve your own lifestyle and then have
a significant impact on other people’s lives applying the concept of the “pool effect”, you have to
break the Parkinson’s Law. And that must be designed and adapted to your DAILY HABITS
Agenda so that it gets executed.

Chapter 59 : The Life I Want.

Gustav Klimt “The Tree of Life”

A book like this, dedicated to successful FOREX Trading, should also help the reader be crystal
clear about the end purpose of the journey that starts once Technical Analysis is mastered and
pips start accumulating. What’s the point of going through the whole effort if not for a whole
new beautiful life?
What is a beautiful life?
What is it made of?
How does it feel?
Is it a life where we work from 9 to 5 like slaves, in depressing ugly environments with zero
motivation other than the next paycheck?
Is it a life where the harder we work trying to improve it, the less we live it?
Is it a life painted by endless sleepless black nights in the agony of unpaid debts?
Is it a life where our food comes in the form of heavily advertised toxic stomach fillers because
we can’t afford pure organic nutrients?
Is it a life where our skies are daily being drawn by chemtrails so that pharmaceutical companies
keep profiting from our poisoning?
Is it a life where our vacations -if any- start and end when our “Boss” says so?
Is it a life where our education system makes sure we switch off our brain, become as obedient
as possible and only think and act “inside the box”?
Is it a life where we’re being bombarded by news that depict other people’s suffering as a
spectacle that adds variety to our deadly boring routine in the shape of an awkward sadistic sense
of entertainment?
Is it a life where each one of us dares to be social only behind the impersonal mask of social
media always typing on a keyboard instead of speaking face to face to other people, touching
them, and being in their presence?
Is it a life where the search for a companion has been substituted by dating sites where ads are no
different than those of used cars dealership sites?
Is this what we’re supposed to be on earth for? Struggling to fill our stomach, stay obedient in
our cubicle slaving away our time and get as isolated as possible keeping our social relationships
at Facebook, Twitter or WhatsApp level?
Is it a life where our children are allowed to play for no more than 10 minutes per hour at the
sound of a ringing bell, while we’re too busy to talk to them about dreaming, singing, praying,
dancing, drawing, laughing, living in full life’s colors, because we don’t have enough time due to
selling our hours for dollars to our “Boss”, being incubated inside the concrete buildings they
call offices?

Is it a life where all we do and all we are boils down to money we must make, money we need
and money we owe?
One family in this world owns Trillions while billions of people live in poverty. There’s simply
something terribly wrong in this picture! They have imposed to the world a set of standards
based on what they have...money. Let’s wake up and impose to the world a set of standards
based on what we have ...loving hearts.

In the era of Internet there should be no poverty in the world. But instead, now more than ever,
we witness an evil agenda about to establish a worldwide nightmare taking total control of our
liberties and lives.

Unless we don’t allow this to happen.

Our peaceful spiritual awakening, our collective consciousness of an alternative world standing
on a Resources Based Economy, “..a holistic socio-economic system in which all goods and
services are available without the use of money, credits, barter or any other system of debt or
servitude..” which we will all build together, so that giving and usership will replace trading and
ownership, will lead to a new model of living where our advanced technology will manage
earth’s resources -what has been availed to all for free-, offering to each and everyone of us
unlimited access to all we need to live a healthy life so we can focus on our mental, emotional
and spiritual development.

In this beautiful future world, there will be no money, no currencies-slavery, emotions and
relationships will be the only valuable assets, not any sort of yellow metal or shiny rocks. Human
lives won’t be bind by papers.

Till the time of the peaceful revolution of spiritually awaken people comes, each one of us has to
free up time because we need free time to introspect, to philosophize, to think about who we are,
to get to really know our magnificent selves and to realize what really matters in life other than
having more food than our stomach needs, more clothes than we’ll ever put on, more shoes than
we will ever remember wearing, more cars than we need to move a couple of building blocks per
day instead of walking -but we’ll gladly put ourselves on the ridiculous position of chasing
treadmill’s strap at the gym- and constantly less energy to follow our dreams, play, be creative
and give our full attention to the precious people around us. I will not use the abused by the
system term “education”. Instead, I will go
for the term “critical thinking”.

Re-activating our critical thinking is not an

easy task because System has played a major
role in putting our “critical thinking” ability
to sleep since our early childhood.

In my consumer-programmed mind, the

yellow-green sponge is for use in the
kitchen, while the identical pink-white
sponge is for cleaning the bathroom.

I needed a brand new kitchen sponge, but

although an extra pink-white sponge inside its celofan was sitting in a drawer, I was so reluctant
using it, that I had actually to think at least three times before I break the pattern of my mind’s
programming.

The moral of the story is that, if our “critical thinking” ability has been so brutally mutilated at
such a low and insignificant decision-making level, guessing about the degree it’s been
compromised on key beliefs that shape our mindset can be daunting.

So you may think that breaking free from the System is impossible. That’s exactly what the
System wants us to believe. That there is no life outside its “treadmill” on which we’re nonstop
running. That there is no life without money we must make in order to consume more and owe
more about things that don’t really make any difference in our lives except increasing our debt
and our stress levels. Insecurity piles up added to the tiredness of working, because unless we
get that promotion we won’t be able to pay off the monstrous debt. Tiredness and insecurity lead
to crippled relationships, divorces, family and personal dramas. The System makes sure we get
frequent reminders by sudden phone-calls at all inappropriate hours of the day imprinting in our
minds the sense of inferiority because we are in debt therefore it’s fine if the System’s
Employees step on our dignity. Besides, we’re only a number on their call list.

Fortunately, breaking free from the System is not impossible. Not for the Super-Beings we are.
But we must first realize and believe it. Our potential is literally vast and can only be confined
by our imagination and our will.

Our Ultimate Goal is to build a bright future which will empower people offering them a high
quality of living by default so they can reach their full potential. I mean “Resource Based
Economy” Model.

The term and meaning of a Resource Based Economy was originated by Jacque
Fresco. It is a holistic socio-economic system in which all goods and services are
available without the use of money, credits, barter or any other system of debt or
servitude.

Jacque Fresco
We have to take control of our minds, these amazingly powerful cosmic devices that are each
one and all together the divine will’s expression in the form of individual or collective
consciousness. We must channel this super power we hold for the good of all of us.

Chapter 60 : Thank You

You are reading my book, giving me your time and attention, which equals pieces of your life. I
am grateful to you for becoming my best friend while reading the thoughts and experiences I’m
presenting here. Why do I call you “my best friend”? Because we obviously share the same
passion for FOREX Trading. But is it all about FOREX? No, it isn’t. It’s about success in life. It
is about success in discovering our best selves.

Well, in a sense, we are both parts of the same divine entity that brought us to be.
So you’re definitely part of me and I’m definitely part of you. And I hope this book will help
you re-shape your life to its brightest version so that you can touch as many people as possible,
helping them re-shape their lives in line with their most beautiful dreams.

I’m seeing in you reflections of myself years ago when I was a multitasker without a plan and
with no other weapon or advantage except my wild hunger for success and my willingness to
escape the mediocrity pit.

How many times did I fail miserably? Countless.

Did the people I used to call “mine” stand by me with words of support or loving actions? No.

I was all alone. But as Pedro Almodovar – the famous Spanish movie director-
said, “unknown people’s goodness saves you” .

So I was saved by unknown people’s goodness meeting them in real life, on the web or reading
their books.

This Book differs from my previous ones in the fact that it is a tribute paid to the goodness of all
the unknown people that appeared like angels out of nowhere, the moments I needed to be saved
the most.

They did noble actions for me, or they told me words of wisdom and showed me which path to
follow next keeping my soul intact and my heart safe.

This time, it is my turn to do noble things for you. This Book is a Tool. If you study it and learn
how to use its content, you’ll become a great trader and your financial results will know no
limits. If you put it aside, it will be useless to you.

And no, you won’t become rich next month. There is nothing exciting or extraordinary when
you’re starting out the journey to success. The journey itself, is totally boring. It may take you
500 Trading Days to turn your $1000 into $1Million or even more. The first months, there will
be many times you’ll think about quitting. It’s not easy to stay disciplined to the System going
for 20 net pips per day. I know you’ll break this rule many times. Try not to. There are two
secret weapons that will help you stay on course. One is the power of VISUALIZATION and
the other is the power of NOW.

Visualization is about the Future, but not just any Future. It’s about your dreams materialized.
It’s the exercise of re-designing your Life and unleashing your creative powers. When
visualizing, you imagine how your life will be when you make your first MILLION with
FOREX in full color images super-charged by emotions. You imagine every tiny detail of one
day of yours from the moment you wake up till the moment you go to bed. Visualization serves
you in two distinctive ways : it motivates you and it feeds your subconscious mind with images
and emotions that are the raw materials it needs in order to bring the reality your want to the
reality you live. The power of NOW comes in full play when you Focus on your Daily Habits
making incremental progress. Having read the Book, you know that the fabric of your life is
made of days and each day’s quality depends on your habits. You also know that by making
FOREX Trading a habit, staying disciplined to the same trading routine every day, will catapult
you to mind-blowing levels of success.

If you liked the book and would recommend it to people who are desperately seeking a way to
stop losing money in the FOREX Market and achieve financial success with their Trading,
please leave your positive Review to the Book’s Page on AMAZON or iBook store. It would
mean the world to me :)

If you’d be interested in receiving my Chart, Video and Audio Signals on your Smartphone
almost on a Daily basis for a range of twelve Currency Pairs and Gold, you can install my
MOBILE APPLICATION to your iOS/Android/Kindle/Blackberry devices here :

http://fxholic.com/app/

Interested in subscribing to my Podcast Shows, or learning more about my private Coaching

Services and my new Premium Audio Signals Service ? Claim your gift and get the details by
visiting my site at :

http://fxholic.com

Would you like to read any -hopefully all- of my “KISS FOREX” Series of Books? You’ll find
links to their AMAZON/Kindle and Downloadable PDF Versions here :

http://fxholic.com/books/

And as I promised, FXholic’s BUDDY, with the 7 Steps Checklist and its dynamic content
where you’ll find Trading Strategies, VIDEO Tutorials and a lot of Training Material to help you
hone your Trading Skills, will be yours by signing up to the page below. Unlock FXholic’s
BUDDY Page using as password the one word that means something successful traders use
while gamblers don’t.

http://fxholic.com/happy19pips96/
If you are truly committed into becoming a great trader, I invite you to my Interactive Training
Program, FXholic GOLDEN. You’ll get a taste of it inside FXholic’s BUDDY.

THANK YOU for reading my Book.

Happy pips!

Sofia
Resources
Books
Technical Analysis and FOREX Trading
○ Forex Patterns and Probabilities – Ed Ponsi
○ Boost Your Forex Profits With Unique Convergence Strategy: Sell The Rally,
Buy The Valley - Vladimir Ribakov
○ The Little Book of Currency Trading – Kathy Lien
○ 50pips a Day FOREX Strategy – Laurentiu Damir
○ Way of the Turtle – Curtis M. Faith
○ The Complete Turtle Trader - Michael W. Covel
○ Chart Your Way to Profits – Tim Knight
○ Getting Started in Forex Trading Strategies – Michael Duane Archer
○ Trade Your Way to Financial Freedom - Van K. Tharp
Success
○ Maximum Achievement: Strategies and Skills that Will Unlock Your Hidden
Powers to Succeed - Brian Tracy
○ Outliers : The Story of Success - Malcolm Gladwell
○ How to Fail at Almost Everything and Still Win Big: Kind of the Story of My
Life - Scott Adams
○ Made in AMERICA - Sam Walton
○ The Compound Effect - Darren Hardy
○ The Slight Edge: Turning Simple Disciplines into Massive Success and Happiness
- Jeff Olson, John David Mann
○ Essentialism: The Disciplined Pursuit of Less - Greg McKeown
○ The Power of Habit - Charles Duhigg
○ Getting Things Done: the art of stress-free productivity - David Allen
○ Mindset: How You Can Fulfil Your Potential - Carol Dweck
○ Eat Move Sleep: How Small Choices Lead to Big Changes - Tom Rath
○ Life in Half a Second: How to Achieve Success Before it's Too Late - Matthew
Michalewicz
○ Thinking, Fast and Slow - Daniel Kahneman
○ The One Thing: The surprisingly simple truth behind extraordinary results - Gary
Keller
○ Do One Thing Different: Ten Simple Ways to Change Your Life - Bill O'hanlon
Philosophy
○ Aristotle : on the Soul (Ancient Greek literature)
○ Timaios - Plato (Ancient Greek literature)
○ Kratylos - Plato (Ancient Greek literature)
○ Theogonia | Works and Days - Hesiod (Ancient Greek literature)
○ Mind Power Into the 21st Century - John Kehoe
 ○ Mindset: How You Can Fulfil Your Potential - Carol Dweck
Neurosciences
○ Emotional Intelligence – Daniel Goleman
○ Social Intelligence - Daniel Goleman
Self Discovery - Spiritual Awareness
○ The Gifts of Imperfection: Let Go of Who You Think You're Supposed to Be and
Embrace Who You Are - Brene Brown
○ You Can Heal Your Life - Louise L. Hay
○ Wishes Fulfilled: Mastering the Art of Manifesting - Wayne W. Dyer
○ Mastering Manifestation: A Practical System For Achieving Absolutely Anything
You Can Imagine - Adam James
○ Creative Visualization: Use the Power of Your Imagination to Create What You
Want in Your Life - Shakti Gawain
○ How to Use Your Creative Imagination - Roy Eugene Davis
Motivation
○ How to Completely Change Your Life in 30 Seconds - Earl Nightingale, Robert
C. Worstell
○ The Motivation Manifesto - Brendon Burchard
○ MONEY Master the Game: 7 Simple Steps to Financial Freedom - Tony Robbins
○ You Were Born Rich: Now You Can Discover and Develop Those Riches - Bob
Proctor
○ Choose Yourself! - James Altucher, Dick Costolo
○ You Are a Badass: How to Stop Doubting Your Greatness and Start Living an
Awesome Life - Jen Sincero
○ New Psycho-Cybernetics - Maxwell Maltz, Dan S. Kennedy
○ Go for No! Yes is the Destination, No is How You Get There - Richard Fenton,
Andrea Waltz
Relationships
○ The Seven Principles for Making Marriage Work - John Gottman, Nan Silver
Nutrition
○ Protein Power: The High-Protein/Low-Carbohydrate Way to Lose Weight, Feel
Fit, and Boost Your Health--in Just Weeks! - Michael R. Eades, Mary Dan Eades
Creating and Managing Wealth
○ No B.S. Wealth Attraction In The New Economy - Dan S. Kennedy
○ No B.S. Price Strategy: The Ultimate No Holds Barred Kick Butt Take No
Prisoner Guide to Profits, Power, and Prosperity - Dan S. Kennedy, Jason Marrs
○ Never Work Again: Work Less, Earn More and Live Your Freedom - Erlend
Bakke
○ Sources of Wealth - Andrea Plos
 ○ Passive Real Estate Investing: How Busy People Buy 100% Passive, Turn-Key
Real Estate Investments, Quit Their Jobs And Create A Safe, Stable, Monthly
Income - Joe Crump
○ Get Paid For Your Creativity - 17 Ways To Get More Clients - Rodney
Washington
Being Prepared
○ America 2020 : the Survival Blueprint Updated - Porter Stansberry
Future
○ The Best That Money Can't Buy - Jacque Fresco, Jacque Fresco Roxanne
Meadows

VIDEOS
Success
● https://www.youtube.com/watch?v=KnRV_FK-5R8 | 5 Things Successful
people do before 8am
● https://www.youtube.com/watch?v=GakfEmYBukQ | The Strangest Secret -
Earl Nightingale- The Classic!
● https://www.youtube.com/watch?v=4h8It0nevWI | Dr. Wayne Dyer - Last 5
Mins before You Sleep
● https://www.youtube.com/watch?v=7bB_fVDlvhc | Why I read a book a day
(and why you should too): the law of 33% | Tai Lopez | TEDxUBIWiltz
● Warren Buffet’s 10 Rules | https://www.youtube.com/watch?v=iEgu6p_frmE
● Donald Trump’s 10 Rules | https://www.youtube.com/watch?v=ExKp9e14Xmc
● Steve Job’s 10 rules of success,
https://www.youtube.com/watch?v=eHzAtxW3TzY
● Bill Gates’s 10 Rules of success | https://www.youtube.com/watch?v=wq-
gba5nMrc
● https://www.youtube.com/watch?v=vn85obLpWZA | Success Secrets of
Albert Einstein Documentary
● https://www.youtube.com/watch?v=4a51wQAOGR4 ←- InstituteOfTrading |
10 Secrets to Achieve Financial Success
Fitness
● https://www.youtube.com/watch?v=McHfvcJ7KsA | 10 Basic Strength
Exercises You Should Know
● https://www.youtube.com/watch?v=Bi1IRzJIoAo | Killer at Home Chest
Workout - 10 Minute Chest Workout Without Weights
● https://www.youtube.com/watch?v=KrsuAGcZelA | Sexy Abdominal Workout at
Home
● https://www.youtube.com/watch?v=ekowbKbBNSM | Dominik Sky - 3
DEADLY AB ROUTINES
 ● https://www.youtube.com/watch?v=6-SKQf6EN_s | STABILITY BALL
workout for a SEXIER STOMACH | Autumn Fitness
● https://www.youtube.com/watch?v=cuDNewVmbHM | 3 Exercise Chest
Workout
● https://www.youtube.com/watch?v=c-Ux1P4U6Tg | How To Lose Belly Fat in 1
Week : Best Ab Workout For Women - No Equipment Required!
● https://www.youtube.com/watch?v=_fzOJX1Is_U | Look Better On The Beach -
Provocative Yoga #1
● http://www.youtube.com/watch?v=oA6kjMar0v0 | Bikini Body Ready -
Provocative Yoga #2
● http://www.youtube.com/watch?v=urNAKn8xCpA | Flat Sexy Tummy -
Provocative Yoga #3
● http://www.youtube.com/watch?v=2gtunaxb57w | Firm Cheeks - Provocative
Yoga #4

Sites
BabyPips.com
ForexFactory.com
Bloomberg.com/news/currencies/
Bloomberg.com/markets/currencies/
http://investopedia.com
http://www.tradingmarkets.com/.site/forex/how_to/articles/-75248.cfm
http://www.investopedia.com/articles/forex/06/ichimoku.asp
http://www.sunilbali.com/blog/
http://www.briantracy.com/
ForexPeaceArmy.com
TradersLog.com
https://www.thevenusproject.com/en/about/resume

My Forex Sites
Forexid.com
FXholic.com

My Profile Page : about.me/ssofia

My Personal Blog : SSofia.com

Install my MOB APP to your Smartphone : http://fxholic.com/app/

Follow me on Twitter : @ssofia , @forexid, @fxholic

Follow me on INSTAGRAM : @fxholic

Subscribe to my PODCAST : http://fxholic.com/subscribe-to-podcast/

Legal Disclaimer

Trading foreign exchange and other on-exchange and over-the-counter products carries a high
level of risk and may not be suitable for all investors. The high degree of leverage associated
with such trading can result in losses, as well as gains. The past performance of any trading
strategy or methodology is not indicative of future results, which can vary due to market
volatility; it should not be interpreted as a forecast of future performance. You should carefully
consider whether such trading is suitable for you in light of your financial condition, level of
experience and appetite for risk, and seek advice from an independent financial adviser, if you
have any doubts.