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April 25, 2007
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We shall start our trade with the London Open. The London Session opens at 08:00 UK time which is 03:00 Eastern Time. Although the Forex Market is a 24 hour market, it is a general practice to assume that the Forex Trading Day closes at 17:00 Eastern Time.
I shall make it so easy that even a Dumb Person can understand what he has to do in order to make profitable trades. So here we go:
First you must get up early in the morning and switch on your computer by 07:30 UK time or 02:30 Eastern Time if you are in America.
Open your current day's trading chart (we need 15 Minutes GBP/USD candlesticks chart as shown below) and locate the 17:00 ET candlestick (previous day's close) as illustrated below:
Now as soon as you see the close of 02:45 ET Candlestick, draw a Straight Line from the close of the 17:00 ET Candle to the close of the 02:45 candle as shown in the chart below. (The red candle closes at the bottom and the blue candles close at the top). We shall refer to this line as Zain's Trend Line or ZTL for short.
Once you have drawn the ZTL correctly, observe where does the next candle opens. If the next candle opens above the ZTL then enter the Market with a Buy and if this candle opens below the ZTL then enter the Market with a Sell. This means you are entering the Market in the direction of the next candle. Blue candles are formed when the Market is going up and Red candles are formed when the Market starts going down. Each candle's duration is 15 minutes in our case, as we have 15 minutes chart open. (If we open a 30 minutes chart then the duration of each candle is 30 minutes.)
In the example below, we enter the market with a Buy at 1.9531. Although the Spike went up as far as 1.9564, 33 pips, we want to play it safe, we need to close our order with a 15 pips profit or we can place our Stop at this point so that we may lock in at least 15 pips profit. Therefore we place our limit order at 1.9550 this includes a 4 pip spread for the Broker, or we can place out Stop and wait to see if our Stop gets hit or we continue to ride the BIG MOVE.
Next we extend the ZTL as shown below. ZTL acts similar to a Support and Resistance Line. We buy when a Blue Candlestick goes above the ZTL and we Sell when a Red candlestick goes below the ZTL.
In the example below we see that the 04:00 candlestick closed below the ZTL and the 04:15 candlestick also opened below the ZTL. We place a Sell Order straight away at the start of the 04:15 candle at 1.9531. As you can see, the Market continued in this direction and made a low of 1.9475, but we actually play safe here and place our limit order at 1.9510. This includes our profit of 15 pips and 4 pip spread for the broker.
Next Buy Signal we get at the close of 11.30 candle. It closed at 1.9554 and it was a Blue Candle telling us to enter long. Immediately at the open of the next candle, the 11.45 candle at 1.9553 we enter the market Long, we buy at 1.9553 and limit our order to 19 pips, 15 pips for ourselves and 4 pips for the broker. We are making money for the broker as well (LOL).
In all we traded 3 times and made a profit of 45 Pips or $450.00. Not bad for a days work.
But not all the time you will get such a Rosey Garden. Sometimes you will incur some losses as well but your profits will out-number your losses as we show below. This is the next days chart. We made 10 trades out of which 3 were negatives. We made 7 Profitable trades giving us 105 pips and we had 3 Losing Trades totaling 25 pips. In all we made a Profit of 80 Pips in a day.
This is $800.00 Profit.
STOP LOSS
So far I have not shown you where to place your stops. Well we place our Stop Loss on the ZTL. Study the chart below in detail and next read below the chart, how to trade on this particular day.
1) Our first trade (Sell 1) was a simple and a straight forward Sell Trade. We draw the ZTL from 17:00 to 02:45. The 03:00 candle opens below the ZTL, we enter the market short with a Sell at 1.9614 and we place our limit 19 pips away to get a profit of 15 Pips.
2) Our second trade (Buy 1) is a Buy when the 04:45 candle crosses the ZTL at 1.9623 and we take our profits 19 pips away to get another 15 pips profit.
3) Our third trade (Sell 2) is a Sell at 1.9625 when the red candle crosses below the ZTL and becomes a Doji. Again we take a profit of 15 pips.
4) We make a loss with our 4th trade (Buy 2). We get a Buy signal at 1.9634 but unfortunately the price does not go as far as our limit. It comes back and as soon as we see the price touching the ZTL and crossing below the ZTL (this is our Stop Loss Point), we exit the market straight away at 1.9630 making a loss of 8 pips.
5) Our 5th Trade, (Sell 3) is also profitable, we enter the market at the start of the 08:30 candle and take our profits 19 pips away.
Please note: Most of the time at 08:30 there is a News release so you need to be aware as the price can shoot up or down very rapidly. Stops must be used at this hour. You can take bigger chunks of profit than 15 pips. In order to Trade the News, you will need my "NEWS FX STRATEGY" available on my website - Click Here
6) Our 6th Trade is also profitabe.
7) We make a loss of 10 pips at our 7th Trade (Sell 4). We sell at 1.9649 but our exit target is not met, the price retraces back and we get another Buy Signal,
8) We buy (Buy 4) at 1.9658 but again out target is not met and we incur a loss of 7 pips.
9) We Sell (Sell 5) at 1.9654 and exit at 1.9635, get a 15 pips profit.
10) Next we get a Buy Signal (Buy 5) at 1.9660 and we exit at 1.9679.
So far during this Trading Day we made 10 Trades, incurred losses in 3 trades totalling 25 Pips and got profits in 7 of the trades totalling 105 Pips. This means that our NET PROFIT was 80 Pips or $800.00 on this day.
I have given some more charts below for you to see what potential there are Trading The ZTL, this is the only system that works well in both trending and choppy markets.
The beauty of the ZTL system is that the Losses are kept to the minimum. There is no system which will give you 100% winning trades all the time. If you find one please let me know. I shall be very grateful to you.
When I am trading, I place my Stop Loss 30 pips away just in case my computer goes bust or I may be hit by an earthquake or any unforseen circumstances, sometimes the Broker Servers may freeze due to heavy traffic. This Stop Loss is placed straight after entering the Market as a safety measure, but my Actual Stop Loss is VISUAL on the ZTL.
You also need to place a Stop Loss of at least 20 pips away from your entry in order to cover any spikes being formed against you as in the case of opening the London Session on the 14th December 2006. Look at the chart right at the bottom.
If the market goes against me or if my target is not hit and the price retraces back, I exit the market when I see the price going beyond the ZTL. Sometimes the price goes beyond the ZTL and then comes back, therefore you have to use your own judgement by looking at the trend formation. Look at the previous 2 candles and see if they have moved up or down.
ENTRY EXIT RULES
1) If the 03:00 EST candle opens 1 pip above the previous candle. we know that the direction of that candle is up, so we enter the market long.
2) You buy or sell when the ZTL line is broken immediately if the trend is in that direction. You can see the trend visually by inspecting the previous candles. If the previous candles are not showing any trend then you wait until the close of the current candle and then enter accordingly.
3) Once you are already in the market, and the market has started going against you, you wait for at least 5 or 6 pips before you exit. The candles may be making spikes and comming back . You must keep at least 10 pips mental stop loss.
I shall repeat again. Its very important that you remember this.
When a blue candle rises above the ZTL we enter the Market Long (buy) and when a Red candle descends below the ZTL we sell.
But there are exceptions.
Case 1) Blue candle opens close to the ZTL we buy and supposing it comes back and goes below the ZTL, we do not close our trade straight away, it may be making a spike and then going back up. We are prepared to take a loss of 10 pips. Therefore we will wait until we are losing 10 pips.
Case 2) A long Red candle is comming down, we see the trend first, are there any other preceding Red candles before this one? If so the trend is down, we sell as soon as this candle crosses the ZTL. If there are no other red candles before this one (there are blue candles before this one, there is no trend) so we wait until the close of this candle and sell if a new candle opens below this candle.
We Exit with at least 15 pips profit. But we also try to catch the BIG MOVE. We get BIG MOVES almost everyday.
When we reach our Profit Target of 15 pips, we do not simply close our trade but we place a Stop Loss at that point in anticipation of catching the big move. If our Stop Loss gets hit we are out of the Market with at least 15 pips profit.
And if the market keeps going in our direction we keep running our Profits, but the Market does not go up or down in a straight line, it swings up and down all the time.
The best way of getting out of the Market is to watch for the close of the opposite coloured candle. Suppose that the market is going up and you get 4 to 5 blue candles one after the other and then suddenly you will get a Red Candle, you should exit the Market at the close of this candle.
But if the Market is moving very slowly then you can use the MACD indicator. As soon as you get an opposite Histogram Bar, exit the Market immediately. Example trade charts are provided in the Members Area.
I place Trading Charts with my comments daily within the Members Area. You should refer to them every day without fail because this will reinforce your learning curve and it will Strengthen your confidence in your self, it will also show if you are making any mistakes.
You have several options. If you want to make most of your trades profitable, then you can go for 10 pips profit instead of 15 pips. If you wish to have bigger profits then you can increase your target to more than 15 pips profit. But the number of your losing trades will be more than your winning trades
There are 2 times the market is great to trade. The first one is the London Open session, (the London Market opens at 03:00 ET) and we mark our 02:45 candle and then wait for the 03:00 candle to see where the market is heading.. As soon as the market opens, a trend starts forming, the market starts going up or down. This is the best time to trade in the direction of the trend. You can get more than 15 pips profit at the beginning of the London Session. Please see chart examples.
The second time to trade is at the time of important Data Release by either UK or USA. There are much more Data release by the USA Government than any other country and they are mostly at 08:30 ET. This is my favourite time to trade. It is 13:30 in UK, mid day. If you like to trade at this time then you please click on this link for more information "NEWS FX STRATEGY". Many of my students just use this one strategy to make great profits.
You can also apply the ZTL system to any other pairs of currency, but I find it more profitable trading the GBP/USD as it has larger swings.
If you wish to be aware of the Data Releases, visit my website at http://www.luckytips.co.uk/datarelease.htm. I also tell you what news to trade, click on the link provided and it will take you to the Fundamentals. You can see here which news affects the market and how. Its a great help to know when a News is due and to be ready to trade at that time for even more profits.
I give below Charts as it happened on Thursday the 14th of December 2006.
Sometimes you can catch big moves when the market is trending in one direction as it happened on Monday the 18th of December 2006, shown in the chart below.
HOW TO CATCH BIG MOVES
Although this is a system where no indicators are required in order to get 15 pips profit at a time, but in order to catch big moves, I suggest 2 techniques to follow.
1) Stay in the market as long as you see the candles being formed are of the same colour. Once the price has reached your 15 pips profit, place your stop loss at this point and observe the direction of the candle movement. Stay in the market as long as the candles are of the same color as shown in the chart below:
2) The second technique is to apply the MACD Indicator as shown below in the chart. Stay in the market until you get the Exit Signal.
When you see the first Up Histogram as shown in the pink circle, exit the market straight away (Close your Position) In this case we get 122 pips, less 4 pips for the broker, gives us a profit of 118 pips.
So we make a profit of $1180.00 in 10 hours.
Thats All!
Have Great Trades using this new ZTL Method ! And keep me informed about your progress. If at anytime you want to ask any question please send me an email at luckytips2000@yahoo.com
I receive hundreds of emails daily and it is very difficult to answer them all. If you wish me to give priority to your emails, then please write LONDON OPEN in the Subject field. These are your code words to get immediate response.
I can assure you once again that you have made a wise investment by purchasing the ZTL Method. Now you do not need any more trading systems. The ZTL Method alone is the ultimate in Forex Trading and you will continue making great profits daily.
To continue your education, please visit the ZTL Members Area Daily, to see how the previous days trades were made. You will learn a lot from these charts.
Your Success is my Success!
I look forward to your feedback and Testimonials.
HAPPY TRADING !
Dr. Zain Agha
December 2006
NEW YORK OPEN