For Bank Consortium, news of Forex gives a perfect opportunity “to drive” currency by 50, 100, 150 points (and more) upward-downward. As it is described in Part 2, Bank Consortium prescribes quotations for currencies to traders. The reader should keep in mind that the number of currency pairs substantially exceeds the number of “two”. Besides, it’s important that all currency pairs can be conditionally subdivided into the two types (see Part 4). That is, if the rate of exchange of a half of the pairs is sharply falling down, the second half is rising steeply for sure. Under these conditions, the profit becomes multiplied by a number of the deals that a given trader is in time to open. This opportunity is so attractive – isn’t it? It is especially important when one works at the American Stock Exchange on Friday. In this case, after the issue of the news (bulletin) concerning USA economics, currency pairs pass over 100 points and more.
Chart 29. There is M15 chart of the GBP/USD pair movement on 1.04.2005.
The dollar rate has changed more than by 200 points on the American Stock Exchange.
This example is far from being unique. In order not to upload the site with numerous charts, the author prefers just to depict the statistical data within April, 2005. Here the movement in several principal currency pairs is depicted. It is just pointed out by what number of points the rate of exchange has changed in American Stock Exchange.
One can earn several thousands of $ by working just with 1 lot (at least, with several currency pairs). The problem consists in the following: Whether the $ rate would rise or fall after the issue of news. This is the key point. Working just during a half of the day on Friday a trader can make his money at the speed of rise in the currency rate. Making the wrong decision, one lose all money as well quickly. Everything depends on this. That is, knowing the data concerning American economics, it is worthwhile to stake on “buy” or “sell” for USD rate.
The corresponding literature submits the following rules:
1. If the news issued are negative (even worth than the prognostication), the currency rate will do fall down for sure. One must stake for “sell”.
2. Otherwise, if the news issued are positive (even better than the prognostication), one must stake for “buy”.
3. If, in general, the news does confirm the prognostication, the currency rate will remain within the price corridor.
It is so simple and clear, is not it? However, why do 90% of traders-beginners keep on losing their money? Just 10% of traders earn considerable sums. You guess, who follows those “clever advises” and who works according to his own technique.
There is one more aspect to be emphasized. The currency movement in the American Stock Exchange on Friday is of the purely speculative type. Consequently,
The amount of loses is equal to the amount of winnings + spread.
That is, the number of losers overwhelms the number of winners during the same period. So, how the reader can keep on believing that the currency will move according to the all famous text books. So, who is the loser?
The matter is that the currency movement can develop in 4 directions, but not in one.
1. As it is submitted in the classical books, in the case of the positive news, one must stake on “buy”.
2. It is recommended to rush towards the news direction for a short while and then to work in the opposite direction.
3. After breaking through levels of resistance, one must go through 100 points. Thus, the trader makes other ones to stake on “buy”. After this, it is recommended to make U-turn, going through 200 points downwards. It is depicted in the chart on April 1, 2005 (Friday).
4. Briefly to say, “our trader” should follow the news and then start to change the movement direction, thus involving more and more traders into the backward course (reciprocal heading). Then the abrupt U-turn will return the initial direction of the news line. So, all “how run ahead of the hare” (the news in our case) suffer immense damages.
The author hopes that readers see why 90% of traders-beginners always lose their game. According to the classical text books, the movement is possible just in the only direction. Consequently, beginners keep on examining sites. They try to get the news ahead of others – at least in a minute- and make their stakes beforehand - as quick as possible.
Our apprentices have learned to get 150 points (and much more), working with several currency pairs at American stock exchange. Such traders have understood the mechanism for finding the correct solution before other traders. How can they gain such a number of points? By the way, if somebody cares, in the author’s dispatches the reader can find out the news earlier than this news will appear in Russian site.
There are two ways of solving this problem.
· The trader can start studying the Friday news at the American Stoke Exchange on one’s own. The author can even suggest what it would be worthwhile to do. One must get to know what criteria are inherent in each of four variants of the currency movement. In this way, the reader can see how to work with all the news –the kind of currency does not matter. On Friday, everything is much more demonstrative. In other days the general idea remains the same. However, the currency movement is slower and a number of points in the currency rate change is smaller.
· I can send you the corresponding technique of work – it is included into the general packet of documents. Besides, other problems are elucidated (see the part “What I give to my subscribers”). The price of this packet makes $100.
Surely, the author is not interested in training students “for nothing” – why for? The author supposes that it is enough that he gratis exposes such problems, not at all elucidated in the classical literature. The “classicists” just ignore these problems. On the contrary, the author free of charge suggests the ways of solving such problems.
The author hopes that a trader-beginner can solve these problems by himself. Probably, a successful beginner, being grateful for the information presented, can write a word or two to the author. Those who are incapable of finding a proper solution can lose much more than these &100. You see, one can just game-play with the life, not working seriously. Maybe, they just have no time for the all-day-long studies (other engagements, works, lecturing, private life, etc). Such people must not try to work at Forex at all. After colossal loses, for people it will be too late to buy the complete and truthful course of lectures written by the author. Really, the bitter truth is better than the sweet lie. One can run into such lies in numerous courses of Forex.
The author’s assistant lectures the corresponding total course. The author himself just organizes trainings for graduating students in the on-line regime. The author recommends when the graduators must stake on “sell” or “buy”. Besides, he explains how long his apprentices (disciples) should stay in their deals. He also advices under which condition it would be preferable to quit or to make the deals, etc. My students will clearly understand their problems. The mistakes will be analyzed and explained. When opening their real accounts, each of the students knows that he can obtain qualified consultations every night (one can compare this technique with the totally alternative approaches, discussed in Part 7).
As a rule, on Friday in the American Session currency pairs make drastic changes in their movement. Due to this, a trader can earn lots of money during a short time interval. At the same time, the trader can lose his money as well – the trader just must see the tendencies in the currency movement in the American Session on Friday.
In its essence, there are the two reasons that initiate this drive.
1. It is the issue of news concerning USA economics (It is the common knowledge that $ is the basic currency in the world).
2. All brokers, dealers and traders do want to earn “some money” before the stock exchange closing for the weekend.
Consequently, the author makes the following conclusions.
1. The author always tries to work within a given session. Being a trader, the author cannot understand the alternative recommendations by those analysts who advise not to work in the given session.
2. It is recommended to close all deals before the issue of this news.
3. One should not open any deal directly before the news issue (about 16.30, Moscow time). It does not matter how much such deals can be teasing for a trader.
Studying the work with the movement of the currency pairs GBP/USD and EUR/USD, one can detect the following.
1. Before the issue of news, nobody knows the session trend direction. Nobody can predict this. Any way, an organizer of Forex game gets his profit.
2. The trickery kind and its issue become clear and evident at the beginning of the news issue and during the further development of the currency pair movement.
3. At the beginning of the news issue the currency “hurries” movement, then an abrupt (brusque, sudden) jerk follows – either upward or downward. After this, the reversal to the previous direction happens.
The trader must do the following.
1). After currencies make candles (upwards/downwards), one should draw levels of resistance and support, connecting previous local extremes (minimums/maximums). Such fractals are zigzagging in the charts M5-M15. The true breakdown towards one of the directions (upwards/downwards) indicates the beginning of the session trend.
2). When the candle steeply rushes upward/downward, the recoil from the initial movement is important for a trader (see the candles in the charts M5-M15).
a) if the recoil is smaller than 50%, there is a high probability that the further movement will preserve the same direction (a new breaking through a local maximum/minimum + there will be a strengthening (attaching) above this level (not less than for several seconds). Then a new breaking through happens again. A deal must be opened towards the given direction (+ 2 points from the fractal).
b). If the recoil is up to 100%, a flat happens between the starting point and a local maximum/minimum.
c). If the recoil exceeds 100%, and the breaking through the starting level is true, a drastic movement is rushing from the initial candle in the backward direction.
The candle is directed upwards. There several variants are possible.
a). The recoil smaller than 50% is accompanied by the drastic start and breaking through the local maximum (“buy” + 2 points from the fractal upwards).
b). The flat happens between the starting point and a local maximum/minimum outside the market (the dark red line in the chart). Here one can expect a true breaking through, directed upwards/downwards.
c). If the recoil from 1 candle exceeds 100%, there will be a strengthening (attaching) below the candle (the candle on the right from the fractal cannot break through the level 1.7750 upwards + breaking through the fractal is downwards.
The conditions for the heavy starting movement are the following: a) the simultaneous breaking through a level by all currency pairs of Forex; b) the trend-like movement. Besides, in TS of Masterforex-V Trading Academy other elements are described.
After the first wave, currency pairs form a mini-flat. Within its framework, the prospect for the development of currency pair further movement on Friday in American session is determined (becomes silhouetted).
Let us return to GBP/USD movement on. The true breaking through the 1st flat within the interval (1.7693-1.7723) indicates the further direction of the currency pair movement on this day in American session. Here the pair goes downwards (February 3, 2006). On January 27 and February 10, there were the currency pair U-turns in the directions, opposite to those of the initial movement.
After the session heavy trend, the initial and further directions of the currency pair movement can coincide in American session on Friday. As a rule, substantial recoils don’t happen under such conditions. Then the position is added towards the trend direction from the recoil. Otherwise, the position is added upwards from the recoil – e.g., upwards from the fractal if the trend is directed downwards.
The deals are closed in the end of the day within the mini-flat at hand. Other important specificities are described in TS of Masterforex-V Trading Academy.
Deals are always closed on the Friday night. This is conditioned by the following reasons.
a). Force-majeur news can appear during the weekend.
b). A new weekly trend starts on Monday.
On January 27, 2006 there was U-turn – breaking through the mini-flat level upwards. An intensive movement downwards is accompanied by breaking through the levels of support.
Now the theme of the work in American session on Friday is displayed in the open site of Masterforex-V Trading Academy. At the insistence of traders of Forex Club, this problem was arisen at the forum of this Forex Brokers. To help the traders, our management decided to discuss these problems openly. Traders from other Forex Brokers keep on telling about losing their deposits. At the same time, traders from the closed forum Masterforex-V Trading Academy can avoid such situations. Much to our surprise, this announcement was removed by moderators from Forex Club. I don’t see any reason why the leading Forex Brokers of Russia “saves” their traders from the discussion of this topic. One must remember that as the result, traders do not gain any profit. On the contrary, they lose their money via their Forex Brokers.
You can discuss the chapter with the Academy members who study the SBP techniques created by Masterforex-V by following the link
Part I - Delusions of Forex Market (typical error 97% losers traders: how and what to change on the way to success in Forex) >>
Chapter 6 - Technical levels of support and resistance in Masterforex-V Trading System. >>
Chapter 7 - Moving averages: The basic Forex indicator. >>
Chapter 9 - Trading on news. Features of trader's work on Friday at American session. >>
Read more
Part 3. Forex investment funds >>
Book 2. Technical analysis of Forex in the Masterforex-V Trading System >>
Book 3. Masterforex-V “Points of opening and closing of positions at the Forex market (basic course)" >>
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