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Platform Setup for MT4 and Trading Tips

Purpose of this document:

This document is intended for use as a reference tool. It is designed solely for YOU. In this document information on platform setup, and trading tips will all be covered.

Basics:

The trading system is based on the combination of Fibonacci Numbers with other numbers. The Fibonacci Numbers are the foundation of the system. These numbers are adherent throughout earth. The system that we are going to use is called the Silvani Numbers. There is one number that is included in the system that will not be found in the standard numbers. That number is the golden mean (62). These numbers are used to “read” the market. For the trader that is not as analytical and more of a visual learner there are lines, which will be placed on the platform. These lines are visual representations of the System. The standard set is what the clients are trained on and the numbers are as follows: red-period 4, blue-period 8, white-period 34. Red represents the speculators (Traders), Blue represents the actual buyer (The guy going to the bank), White represents the overall sentiment (support and resistance). The foreign currency market trades 24 hours a day 6 days a week (Sun night - Fri evening). There are two main times when the market has the most volatility, 1:30AM est – 4AM est, and 7AM est - 11AM est.

Stochastic:

The stochastic oscillator is a momentum indicator based off a set time period. It is a moving average system that determines buying and selling power. If the K period which is represented by a blue line reaches 80 the market is considered overbought. If the line reaches 20 the market is considered over sold. The momentum shifts are represented by the blue line crossing the red. The red line is the D period. The best time to trade using the stochastic is when the blue crosses the red when it is above the 80 or below the 20.

F-Factors:

The F-Factor is the starting point for the trading day. There are two F-Factors that are used in the system. The midnight F-Factor is used for all day trading and the morning F-Factor is used for the morning session of trading. The morning F-Factor is used because that is when the most amount of people are in the market. The only other time that there is a new F-Factor (other than the two stated before) is when the market has traveled to the limit of a grid. As soon as the price of the market has hit the limit, the limit is then made the new F-Factor.

To find the F-Factor one must click on the M5 Time Frame and then put the cursor on the chart. Next scroll back to either 00:00 GMT or 09:55 GMT. We use the Open price at 00:00 for the midnight F-factor and the Close price at 09:55 for the morning F-Factor. After the F-Factor is determined it is then used in the Silvani grid.

Time Periods give a projection for the _ amount time:

M=Min, H=Hours, D=Days, W=Weeks

M1= 3-5 min

M5= 8-13 min

M15= 21-34 min

M30= 34-55 min

H1= 3-5 Hr

H4= 8-13 Hr

D1= 3-5 Days

W1= 3-5 Weeks

Use the M1, M5 (for scalping) & H4 (for long term trades)

MT4:

Setup up the line:

Right click on the graph and go to properties and change the grid, bar up, bar down, bull and bear candle, and line graph to black. Next go to the navigator window and click on the plus sign next to indicators. Scroll down to moving averages and drag and drop it on the blank screen. Next change the parameter (period) and style(color). Repeat this step for each moving average.

Moving Averages:

Red = period 4

Blue = period 7

White = period 17

Next scroll down to the Stochastic Oscillator in the navigator window (drag and drop on screen) and make kPeriod = 17 dPeriod = 4 slowing = 3.

Now save the template: To do this, click the box in the tool bar at the top right of the screen next to the clock icon.

Basics of putting a trade in. MT4:

Double click on the currency pair that you wish to trade.

Now that the New Order window is open make sure that the symbol is on the currency that you want to trade. Make sure that you are using the correct lot size, which is volume in the order window. (We use a max of 20% in trades. For a standard account ex. $50,000*.20=10000, now divide 10000 by 1000 which equals 10 lots total. For a mini account ex. $500.00*.20=100, now divide 100 by 100 which equals 1 lot total.) Double check the type of trade you are about to submit by clicking on type. Click on either instant execution or pending order.

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Next you can put a Stop Loss and a Take Profit. To put in a trade right now you can either click Buy or Sell. To put a pending order in go to the Pending Order which is under Type: and select Buy Limit, Buy Stop, Sell Limit, Sell Stop. Then you will put the price in which you want the trade to be put in, and hit place order.

Buy Stop = a buy order that gets put in higher price than where the current price is.

Buy Limit = a buy order that gets put in at a lower price than where the current price is.

Sell Limit = a sell order that gets put in at a higher price than where the current price is.

Sell Stop = a sell order that gets put in at a lower price than where the current price is.

If the trade is already in and you want to put a Take Profit and Stop Loss right click on the trade that will be in the terminal window and left click on the Modify and Delete button. Then you can put your stop loss and take profit in and click on modify.

To close a trade double click on the trade that you want to close and the new order window will pop up. Then click on the close button in the instant execution section of the order window. The button is long and will have the ticket number printed on it.

Scalping:

The objective of scalping is to minimize the risk of losses while trying to maximize gains. (GET IN, GET OUT, AND DON’T HOLD TRADES.)There are several ways to scalp. When scalping look for 2-5 pips profit and no more than a 13 pips loss. Also do not use more than two open trades at a time.

There are several key indicators for scalping one of the indicators happens when the Stochastic's solid line crosses the dotted line on the M1 or M5. When the Stochastic's solid line is above the 75 level the market is considered over bought and look for opportunities to sell. When the line is below the 25 level the market is considered over sold and look for opportunities to buy. The stochastic is considered a momentum indicator.

Another form is to find channels in the market. A sideways channel is formed when the market bounces off a resistance level more than once on both the bottom and top. The visual representation is when the red line makes a wave pattern. To scalp this place buys at the bottom and sells at the top of the channel. When scalping this type of channel, be mindful of the puddle jump theory. This theory happens when the market breaks out of either the bottom or the top of the channel by 3-5 pips on smaller channel and 5-13 pips on the larger channels. Once the break has occurred the market will stall and then go through the channel in the opposite direction of the break out and trend in the opposite direction.

A third indicator is to watch the moving average lines. The best way to make pips using this method is to watch the red line cross the blue line. The key to this move is to also watch the stochastic. If the stochastic is pointing in the same direction as the red line when it is crossing the blue line put a trade in that direction. When making trades with this method look for a 3-5 pips profit and still a 13 pips max stop loss.

And finally, put trades based on the resistance levels. The way to scalp using this method is by putting a trade anticipating a bounce off the resistance level. Example: when the market is in an up trend and approaching the 21-resistance level sell 2-3 pips before the resistance level.

Have a take profit in and a stop loss.

Scalping rules of thumb (Short term trades):

No more than 2 open trades at ANY time.

Take losses @ 8 pips out with a max of 13 pips

Max loss per day is 39 pips

Put in 8 pip stop loss on pre orders

Put in a 13 pip stop on trades that are being watched

Use the 20% rule

It WILL come back.......... to BITE YOU IN THE BUTT!!!

Retracement:

Determine what the time period in which to do the Retracement. For example: 1Day, 3day, 8day. Next determine what is the Highest High and the Lowest Low for that particular time period. Find the difference between the High and the Low. If that number is less than 100 use the actual Fib. Numbers (8,13,21,34,55,62,89,144,233). If the difference is greater than 100 us Fib % (8%, 13%, 21% and so on), and then we either subtract from the high or add to the low. The FREE money range is from 55 to 62. The reason that there is a free money range is because at the 55 Level the market is considered to have changed directions. So, when the market breaks the 55 level it will jump to the 62 level. This is where the second guess comes in. At 62 level is where the market determines which way to go. This zone only works one time and then it is no longer a high probability of success. The key to all of this is to determine which way the market is retracing. To determine this look to see which is closer to today, the high or the low. If we are coming from the high then the FREE money is a sell. If we are coming from the Low then the FREE money is a buy. Each Retracement level is a resistance level and one should expect resistance. Also these numbers are projections as to where the market is trying to reach.

Hedging:

Hedging is not a good idea. This type of trading is only to be used as a safety net. The objective of this strategy is to build buying power back into the account. Certain brokerage firms will not let a client hedge so if this is important to you check with your brokerage firm. Hedging is simply putting in a trade opposite of the trade that is already in. This is done to protect the margin level. (Ex. 1 lot in on a buy and 1 lot in on a sell. With this the margin and profit/loss is locked in.) To get out of a hedge will require patient. The object is to take profit on either the buy or sell and reduce the other trade that is left. (Best time to do this is when the market is slow!). To do this safely and make a little money in the process there is a formula. Once the reduction is done re-hedge the account so if there is any movement the account won’t be affected.

|Lots |Buy |Sell | | | |

|1 |-300 | | | | |

|1 | |150 | | | |

|How many times will neg. whole number go into positive | |

|Neg. number divided by 10 | | | |

|300 |/10 |Equals 30 | | | |

| | | | | | |

|30 goes into 150 _____ times. | | | |

|150/30= |5 | | | | |

| | | | | | |

|Since we divided the loss by 10 we must divide the lots by 10 |

|1 lot/10= |0.1 | | | | |

| | | | | | |

|now multiply .1 times 5 | | | |

|0.5 |number of lots that you can reduce the neg trade by |

A couple of general rules of thumb.

Use 20% of your account to trade (ex. 50,000equity*20%= 10,000/1000(for a standard account) =10 lots total.) For a mini account $500 equity*20%=100/100 = 1 lot total

2 bad trades in a row or 1good 1 bad 1 good 1 bad. Walk away and do something other than trade.

Trade detached from the market

Make 25 pips a day

Be able to explain each and every trade.

Don't put a trade in for the sake of putting in a trade.

Not trading is sometimes the BEST trading decision.

Trade the market like you OWN IT.

This is for long term trading only!!!

Risk double + 2 of what you want to make. (10 pips TP use a 22-pip stop loss)

DON'T FOCUS SO MUCH ON THE LOSSES THAT YOU FORGET HOW TO MAKE MONEY!

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