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Quick IntroductionThis is for all of YOU dedicated and hard-working traders who aspire to become truly consistently profitablein your trading!
I (Todd Mitchell) would like to give you this special trading gift today as a way of sayingTHANK YOU for listening and
watching to my video trading series.
This is a PDF file of everything that I have taught you over the course of the last few weeks, all combined into one printabledocument for you to print out and learn from easily.
I truly hope you enjoy it!
Todd
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Hello, as you know, my name is Todd Mitchell from Trading Concepts(www.TradingConceptsInc.com
), and I would like to take this
opportunity toTHANK YOUfor watching my trading video series over the last few weeks. I also would like to thank thoseof you that attended my live trading webinar; I truly appreciate it! I hope that youve not only enjoyed the trading videos, but
also learned a lot from them as well. I enjoyed putting all this trading information together for you.
My sincere intent is not only to help educate you in the way that I personally trade the markets, but also to show you a different
way to interpret the markets for your own trading success. I urge you to take the trading strategies Ive given you (here in this
PDF document and in the videos you currently have) and use them in your own trading, because I know in my heart of hearts
that these trading strategies will help you become a better and more consistently profitabletrader!
And its perfectly alright (absolutely no hard feelings whatsoever) that you were not able to take advantage of my new FOREX
FOR PROFITS 2.0 Mentoring Program. Who knows, maybe when I open enrollment back up in the latter part of 2012, youll be
in a better place to get started.
Once again,THANK YOUfor taking your valuabletime to watch my video trading series over the last few weeks, and I hope
this PDF document helps you even more in your trading success.
Bye for now, and until next time, have a profitable day!
Yours in trading success,
Todd itchell
Todd Mitchell
www.TradingConceptsInc.com
(800) 664-3343 / (248) 593-5851 3 Trading Concepts, Inc.
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Table of Contents
The Truth About FOREXTrends... 5
3 Powerful FOREX Price Patterns. 23
Money Management & Position Sizing.. 45
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The TruthAbout FOREX Trends
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The Core Price Structure and Rhythm of ALL Markets!
To Successfully Trade the FOREX MarketsYou need to understand the Underlying Movements and Rhythm of the Markets!
The following Principles form the Cornerstone of a Consistent and Successful
Trading Methodology. There is only one major Market Cycle (or movement) in
existence. The FOREX Market can do nothing else but comply with this one basic
Market Cycle, we call it
The Market Flow Analysis Method (Pure PRICE ACTION)
There is no other Movement or Motion possible in the FOREX Markets.
The FOREX Markets do NOT move in a Random fashion.
The FOREX MarketsALWAYS move within the framework of an Underlying
Market Wave. Otherwise, known as a TREND, whether it be Up, Down, or
Sideways.
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Three Primary Waves (TRENDS) in the FOREX Markets!
There are only Three (3) Primary Waves (TRENDS) in the FOREX Markets:
1) UP TrendA Series of Higher Highs and Higher Lows
2) DOWN TrendA Series of Lower Highs and Lower Lows
3) SIDEWAYS TrendA Series of relatively Equal Highs and Equal Lows
Identifying which Wave or TREND the FOREX Market is in is vital to Successful
Trading.
The Market Flow Analysis Method (MFAM) is based upon: the Upside Penetration of market HIGHS, and
the Downside Penetration of market LOWS.
New Highs and New Lows are continuously being formed in the Markets. Therefore, Tradersmust identify these important levels to help in mapping out what the Markets are most likely
going to do next.
This will help you in identifying if a market is TRENDING UP, TRENDING DOWN, or
TRENDING SIDEWAYS, at the Early Stages of the Trend and not after the fact.
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The UP Trend Market Flow Process
A series of New Highs (NHs) and Active Lows (ALs)
LOW(Lowest LOW)
AL(Active Low)
AL
AL
MRAL(Most Recent Active Low)
HIGH
NH
NH
NH
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The DOWN Trend Market Flow Process
A series of New Lows (NLs) and Active Highs (AHs)
HIGH
NL
NL
LOW MRAH
AH
AH
AH
NL
(Most Recent Active High)
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The SIDEWAYS Market
A series of relatively Equal Highs and Equal Lows
HIGH
LOW
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MRAL
An UP Trend Reversing Into A DOWN Trend
Downside Penetration of the Most Recent Active Low (MRAL) in the MFAM
AL
NH
NH
HHAH
(Most Recent Active Low)
Simply being able to identify critical Lows in an UPTREND will enable you to stay
in a Trend longer and you will know with High Probability at what levels the Market
is most likely going to change directions.
NL
The UP Trend is potentially Reversing into aDOWN Trend at the Downside Penetration of the MRAL
AL
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LL
A DOWN Trend Reversing Into An UP Trend
Upside Penetration of the Most Recent Active High (MRAH) in the MFAM
NL
MRAH
AH
AH
NH(Most Recent Active High)
Simply being able to identify critical Highs in a DOWNTREND will enable you to
stay in a Trend longer and you will know with High Probability at what levels the
Market is most likely going to change directions.
AL
The DOWN Trend is potentially Reversing into an UP
Trend at the Upside Penetration of the MRAH
NL
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3 Powerful
FOREX
Price Patterns
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To Interpret what the OPEN, HIGH, LOW, and CLOSEdid on a Particular
Bar and compare that criteria to the Previous Price Bars Action, in order tomake Intelligent Conclusions about the FOREX Markets.
BAR CHARTS (Vertical Bars) or CANDLESTICKS
RANGE: Confirms Momentum
CLOSE: Confirms Price Action
PRICEACTION ANALYSIS helps a Trader
Identify insight into what the Market is likely going to do next.
Price Action Analysis
CLOSE
OPEN
CLOSE
OPEN
OPEN
CLOSE
OPEN
CLOSE
RAN
GE
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3 Powerful BULLISHPrice Patterns
@ Logical SUPPORT LEVELS in an Established UP Trend
BUOVB IVB(Bullish OVB) BUBOB
(Bullish Blow-Off Bar)
Bullish Engulfing Bullish Harami
Hammer
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3 Powerful BEARISHPrice Patterns
@ Logical RESISTANCE LEVELS in an Established DOWN Trend
(Bearish Blow-Off Bar)
BEBOB
(Bearish OVB)
BEOVB IVB
Shooting Star
Bearish Engulfing Bearish Harami
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Bullish Outside Vertical Bar (BUOVB)
BullishOutside Vertical Bar (BUOVB) / BullishEngulfing The HIGH and LOW must exceed the Prior Bars HIGH and LOW andthe CLOSE must close in Top
Quarter of the Bars Range
ONLY USED at Logical SUPPORT in an established UP Trend
ISL
BUY ENTRY
PROFIT OBJECTIVE(1X Range of BUOVB)
ISL
BUY ENTRY
PROFIT OBJECTIVE(1X Range of Engulfing Candle)
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Bearish Outside Vertical Bar (BEOVB)
BearishOutside Vertical Bar (BEOVB) / BearishEngulfing The LOW and HIGH must exceed the Prior Bars LOW andHIGH and the CLOSE must close in
Bottom Quarter of the Bars Range
ONLY USED at Logical RESISTANCEin an established DOWN Trend
ISL
SELL ENTRY
PROFIT OBJECTIVE
(1X Range of BEOVB)
ISL
SELL ENTRY
PROFIT OBJECTIVE
(1X Range of Engulfing Candle)
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Inside Vertical Bar (IVB)
IVB @ Logical SUPPORTin an established UP Trend The HIGH and the LOW both must be Inside the Previous Bars Range (the HIGH is Lower than the
Previous Bars HIGH and the LOW is Higher than the Previous Bars LOW)
ONLY USED at Logical SUPPORTin an established UP Trend It does NOT MATTERwhere the Bar Closes
Inside Vertical Bar (IVB) / BullishHarami
ISL
BUY ENTRY
PROFIT OBJECTIVE(2X Range of IVB)
ISL
BUY ENTRY
PROFIT OBJECTIVE(2X Range of IVB)
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Inside Vertical Bar (IVB)
IVB @ Logical RESISTANCEin an established DOWN Trend The HIGH and the LOW both must be Inside the Previous Bars Range (the HIGH is Lower than the
Previous Bars HIGH and the LOW is Higher than the Previous Bars LOW)
ONLY USED at Logical RESISTANCEin an established DOWN Trend It does NOT MATTERwhere the Bar Closes
Inside Vertical Bar (IVB) / Bearish Harami
ISL
SELL ENTRY
PROFIT OBJECTIVE(2X Range of IVB)
ISL
SELL ENTRY
PROFIT OBJECTIVE(2X Range of IVB)
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Blow-Off Bar (BOB)
BullishBlow-Off Bar (BUBOB) / Hammer The OPEN and CLOSE must be in the Top Quarter of the Bars Range andthe LOW of the Bar exceeds
the Prior Bars LOW with the Blow-Off Bars Range about 125% Larger than the Prior 3 to 5 Bars ONLY USED at Logical SUPPORTin an established UP Trend
ISL
BUY ENTRY
PROFIT OBJECTIVE(1X Range of BUBOB)
ISL
BUY ENTRY
PROFIT OBJECTIVE(1X Range of BUBOB)
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Blow-Off Bar (BOB)
BearishBlow-Off Bar (BEBOB) / Shooting Star The OPEN and CLOSE must be in the Bottom Quarter of the Bars Range andthe HIGH of the Bar
exceeds the Prior Bars HIGH with the Blow-Off Bars Range about 125% Larger than the Prior 3 to 5 Bars ONLY USED at Logical RESISTANCEin an established DOWN Trend
ISL
SELL ENTRY
PROFIT OBJECTIVE(1X Range of BEBOB)
ISL
SELL ENTRY
PROFIT OBJECTIVE(1X Range of BEBOB)
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Th BUY OVB (O id i l ) S
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The BUY OVB (Outside Vertical Bar) StrategyAn Entry based on the Creation of an OVB
Criteria:
The Market MUST:1. Be Trading at Logical SUPPORTin an established UP Trend2. Penetrate Down thru the Previous Bars LOW First
3. Reverse to the Upside off of the Current Bars LOW and Penetrate Up thru the
Previous Bars HIGH thereby creating a BUOVB
BUY the Market when the HIGH of the Previous Bar is Penetrated to the Upside
ISL
BUY ENTRY
1) LOW of Previous
Bar Penetrated First
3) BUY when HIGH
of Previous Bar is
Penetrated
2) Market Reverses UP off the
LOW of the Current Bar
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Th SELL OVB (O id V i l B ) S
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The SELL OVB (Outside Vertical Bar) StrategyAn Entry based on the Creation of an OVB
Criteria:
The Market MUST:1. Be Trading at Logical RESISTANCE in an established DOWN Trend2. Penetrate Up thru the Previous Bars HIGH First
3. Reverse to the Downside off of the Current Bars HIGH and Penetrate Down thru the
Previous Bars LOW thereby creating a BEOVB
SELL the Market when the LOW of the Previous Bar is Penetrated to the Downside
ISL
SELL ENTRY
1) HIGH of Previous
Bar Penetrated First
3) SELL when LOW
of Previous Bar is
Penetrated
2) Market Reverses DOWN off the
HIGH of the Current Bar
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PROFIT OBJECTIVE 3) BUY when HIGH ofCreation
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ISL
BUY ENTRY
PROFIT OBJECTIVE(1X Range of BUOVB)
ISL
BUY ENTRY
PROFIT OBJECTIVE(2X Range of IVB)
ISL
BUY ENTRY
1) LOW of Previous
Bar Penetrated First
Previous Bar is Penetrated
2) Market Reverses
UP off the LOW of the
Current Bar
ISL
BUY ENTRY
PROFIT OBJECTIVE(1X Range of BUBOB)
ISL
BUY ENTRY
PROFIT OBJECTIVE(3X Range of IVB)
BUOVB
IVB IVB
of
BUOVB
BUBOB43
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ISL ISL1) HIGH of Previous BarPenetratedFirstBEOVB
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SELL ENTRY
PROFIT OBJECTIVE(1X Range of BEOVB)
ISL
SELL ENTRY
PROFIT OBJECTIVE(2X Range of IVB)
ISL
SELL ENTRY
PROFIT OBJECTIVE(3X Range of Narrow Range IVB)
ISL
SELL ENTRY
PROFIT OBJECTIVE(1X Range of BEBOB)
SELL ENTRY
Penetrated First
3) SELL when LOW of
Previous Bar is Penetrated
2) Market Reverses DOWN
off the HIGH of the Current
Bar
BEOVB
IVB IVB
Creation
ofBEOVB
BEBOB
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Money Management
&
Position Sizing
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The Most Important Aspect of any Trading Methodology
How Much to Risk?
Of all of the Traders that have come to me over the last 17 years, 90% of them did not
focus on this crucial aspect of Trading: Money Management & Position Sizing!
Many Traders believe that their Trading Methodology is flawed therefore theyre
always looking for something new or better (searching for the Holy Grail) when
in reality, Money Management & Position Sizing should be at the forefront of their
Trading Methodology. For example,
A Trader may have a great Trading Methodology with a poor (or no)
Position Sizing Strategy and never achieve their Trading Objectives, or
A Trader may have an average (or below) Trading Methodology with a
great Position Sizing Strategy and reach their Trading Objectives.
I can show you a much better than average Trading Methodology and a much
better than average Position Sizing Strategy so you not only will easily reach your
Trading Goals and Objectives but literally print money!
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90% of Traders Fail WHY?
most traders and investors have no place to go to learn what is probably the most
important aspect of their craft. Tharp, Van K. Trade Your Way to Financial
Freedom, 2ndEd.
Even the so-called experts in the market or the people that the public turns to for
financial advice receive very little to no training on position sizing many top
professionals dont understand the most important component of investment (trading)
success: position sizing. Tharp, Van K. Super Trader
If you
are trained as a broker for any major brokerage company
become a certified financial planner (CFP)
get an MBA from a top university with a specialty in how the markets work
get a Ph.D. in finance from a top university
become a certified financial analyst (CFA)
get trained to be a professional trader for a bank of a major firm
youll receive no training in position sizing Tharp, Van K. Trade Your Way to
Financial Freedom, 2ndEd.
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10% of Traders Succeed WHY?
They understand position sizing well enough that they will continue to be in the game
if they are wrong and make big money when they are right.Tharp, Van K. Super
Trader
The 10% of Successful Traders
Understand the importance of Money Management and understand that making
money in the markets is all about position sizing and they utilize and implement a
position sizing strategy so that they achieve consistent results without excessive
drawdowns over the long run.
They have clearly determined and identified what their Trading Objectives are and
they apply a Position Sizing Strategy to their Trading Methodology.
If you have a good strategy, the key to meeting your objectives is your position sizing
method. Tharp, Van K. Safe Strategies for Financial Freedom
The Holy Grail is YOU! The Holy Grail is you assuming total responsibilityfor implementing a sound Trading Methodology with a Position Sizing Strategy that
will allow you to achieve your Trading Objectives.
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Position Sizing Calculator
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The Most Critical Aspect of your Trading Plan
Money Management represents the administrative side of your Trading Plan.
It addresses the question of how best to use the Capital Available to you in themost Effective Manner possible with the goal of Maximizing your Profitability
while at the same time Protecting your Capital by Minimizing the Risk of ruin.
The True Essence of Money Management is Managing Risk
Wise Money Management is the basis of any good Trading Methodology and
is what ultimately will help distinguish a Consistently Successful Trader from
the trader that consistently loses. Many Traders have fallen to the wayside
trying to make a lot of money on a single trade, trying to hit that Home Run,
when they would have been better off making Small (Singles and Doubles)Steady Gains. Once you start doing this (and thinking this way) you will see
your account Consistently Starting to Grow.
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The Subject of Money Management includes
Consideration of the Following Factors:
Deciding on the OPTIMUM Amount of Money to commit to any OneTrade relative to your Total Available Trading Capital.
PROTECTING your Profits from erosion.
Avoiding (at all costs) turning a Small Losing trade into a Huge Losing
trade. If you keep your losses small, your profits dont have to be Home Runs to
earn a good living.
Knowing When and How to Increase the Size of your cash Commitment
when the Odds are more in Your Favor (i.e. risk to reward is really tilted in your
favor, etc.).
Recognizing the Importance of taking some of your Winnings off the
Table after a Winning Streak.
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Always Know Your Exit Before You Enter
One of the cardinal rules of Good Trading is always to have an Exit point before you
even Enter a Trade. If you know your Initial Risk, you can express All your Results in terms of your Initial Risk.
Most Traders, as well as many Top Professional Traders do not realize the Most
Important, Non-Psychological component of Trading/Investing Success:
POSITION SIZING!
A Position Sizing Strategy
Helps you Determine How much Equity to Risk on every Trade you take. Its purpose is to Help you meet your Objectives. You could have the worlds best Trading
Method (for example, one that makes money 95% of the time & in which the average
winner is twice the size of the average loser), and you still could go bankrupt if you risked
100% on one of the losing trades. Helps you Determine How much Equity to Risk given several inputs:
Your Trading Strategies Risk, your Personal Risk Tolerance, the kind of Returns you
want to make, and your own Personal Definition of Ruinwhether thats bankruptcy or
some level of equity drawdown.
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3 C t f P iti Si i
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3 Components of Position Sizing
Traders
Objectives
PositionSizing
Method
Traders
Psychology
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3 Components of Position Sizing
Traders Objectives: Everyone has different Objectives when they Trade You must Determine what your Personal Objectives are.
Traders Psychology:This influences the first component (the Traders
Objectives). What beliefs are operating under?
What emotions come up when youre trading?
Whats your mental state?
A Trader with NO Objectives and NO Position Sizing (discussed next)
Guidelines will Position Size totally by Emotions.
Position Sizing Method: For a lot of Traders this is Intuitive in other
words they really dont have an actual Method or particular Algorithm.
You really need an exact Method of Position Sizing let me give you what Ipersonally use.
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Position Sizing Model
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Position Sizing Model
A simple model for determining How Much involves risking a Percentage of
your Equity on every trade. You need to know three distinct variables:
The CPR Model for Position Sizing1. How much of your equity are you going to risk? This is your total risk, but we will
call it cash (or C) for short. This will be the Cin our CPR formula. For example, if
you were going to risk 2% of your equity, Cwould be 2% of your equity. If you have
a $25,000 account, Cwould be 2% of that, or $500.
2. How many units do we buy (that is, what is your position sizing method)? We callthis variable (P)for position sizing method. How many micros, minis or standard
contracts do we buy?
3. How much are you going to risk per unit that you purchase? We will call this variable
(R), which stands for risk. For example, if youre going to buy the EURUSD at
1.4237 and your risk is 50 pips (1.4187), then of course your risk Rin this particular
trade is 50 pips. We will use this in our CPR Formula below.
Use the following Formula to determine how many Contracts, Shares, or Lots to trade.
P= C/ R
(P) Position Sizing = (C) Total Cash at Risk / (R) Risk (# of Pips)
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Position Sizing Model Example (P= C/ R)
Lets say, for example, with a $100,000account balance
Youre willing to risk 2% of your account balance ($100,000 x .02 = $2000) or C =$2000.
You BUY the EUR/USD @ 1.4237 with a risk of 50 Pips (1.4187) or R =50 Pips.
IF P =$2000 /50 pipsTHEN you can trade:
@ $10.00 per Contract, $2000 /$500 ($10.00 x 50 pips) = 4 Standard FX Contracts
@ $1.00 per Contract, $2000 /$50 ($1.00 x 50 pips)= 40 Mini FX Contracts
@ $0.10 per Contract, $2000 /$5 ($0.10 x 50 pips) = 400 Micro FX Contracts
Lets say, for example, with a $50,000account balance
Youre willing to risk 2% of your account balance ($50,000 x .02 = $1000) or C =$1000.
You BUY the EUR/USD @ 1.4237 with a risk of 50 Pips (1.4187) or R =50 Pips.
IF P =$1000 /50 pipsTHEN you can trade:
@ $10.00 per Contract, $1000 /$500 ($10.00 x 50 pips) = 2 Standard FX Contracts
@ $1.00 per Contract, $1000 /$50 ($1.00 x 50 pips)= 20 Mini FX Contracts
@ $0.10 per Contract, $1000 /$5 ($0.10 x 50 pips) = 200 Micro FX Contracts
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Position Sizing Model Example (P= C/ R)
Lets say, for example, with a $25,000account balance
Youre willing to risk 2% of your account balance ($25,000 x .02 = $500) or C= $500.
You BUY the EUR/USD @ 1.4237 with a risk of 50 Pips (1.4187) or R= 50 Pips.
IF P =$500 /50 pipsTHEN you can trade:
@ $10.00 per Contract, $500 /$500 ($10.00 x 50 pips) = 1 Standard FX Contracts
@ $1.00 per Contract, $500 /$50 ($1.00 x 50 pips)= 10 Mini FX Contracts
@ $0.10 per Contract, $500 /$5 ($0.10 x 50 pips) = 100 Micro FX Contracts
Lets say, for example, with a $10,000account balance
Youre willing to risk 2% of your account balance ($10,000 x .02 = $200) or C= $200.
You BUY the EUR/USD @ 1.4237 with a risk of 50 Pips (1.4187) or R= 50 Pips.
IF P =$200 /50 pipsTHEN you can trade:
@ $10.00 per Contract, $200 /$500 ($10.00 x 50 pips) = NO Standard FX Contracts
@ $1.00 per Contract, $200 /$50 ($1.00 x 50 pips)= 4 Mini FX Contracts
@ $0.10 per Contract, $200 /$5 ($0.10 x 50 pips) = 40 Micro FX Contracts
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Position Sizing Model Example (P= C/ R)
Lets say, for example, with a $5,000account balance
Youre willing to risk 2% of your account balance ($5,000 x .02 = $100) or C= $100.
You BUY the EUR/USD @ 1.4237 with a risk of 50 Pips (1.4187) or R= 50 Pips.
IF P = $100 /50 pipsTHEN you can trade:
@ $10.00 per Contract, $100 /$500 ($10.00 x 50 pips) = NO Standard FX Contracts
@ $1.00 per Contract, $100 /$50 ($1.00 x 50 pips)= 2 Mini FX Contracts
@ $0.10 per Contract, $100 /$5 ($0.10 x 50 pips) = 20 Micro FX Contracts
Lets say, for example, with a $2,500account balance
Youre willing to risk 2% of your account balance ($2,500 x .02 = $50) or C= $50.
You BUY the EUR/USD @ 1.4237 with a risk of 50 Pips (1.4187) or R= 50 Pips.
IF P = $50 /50 pipsTHEN you can trade:
@ $10.00 per Contract, $50 /$500 ($10.00 x 50 pips) = NO Standard FX Contracts
@ $1.00 per Contract, $50 /$50 ($1.00 x 50 pips)= 1 Mini FX Contracts
@ $0.10 per Contract, $50 /$5 ($0.10 x 50 pips) = 10 Micro FX Contracts
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$2,500 Account
2% of $2,500 = $50 Max Loss
P = $50 / 35 PIPS
Unable to Trade a Standard Contract,
Trade up to 1 Mini Lot or 14 Micro Lots
$10,000 Account
2% of $10,000 = $200 Max LossP = $200 / 35 PIPS
Trade up to 5 Mini Lots or 57 Micro Lots
$25,000 Account
2% of $25,000 = $500 Max Loss
P = $500 / 35 PIPS
Trade up to 1 Standard Lot or 14 Mini Lots
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$5,000 Account
2% of $5,000 = $100 Max Loss
P = $100 / 22 PIPS
Unable to Trade a Standard Contract,
Trade up to 4 Mini Lots or 45 Micro Lots
$15,000 Account
2% of $15,000 = $300 Max Loss
P = $300 / 22 PIPS
Trade up to 1 Standard Lot or 13 Mini Lots
$50,000 Account
2% of $50,000 = $1000 Max Loss
P = $1000 / 22 PIPS
Trade up to 4 Standard Lot or 45 Mini Lots
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$7,500 Account
2% f $7 500 $150 M L
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2% of $7,500 = $150 Max Loss
P = $150 / 30 PIPS
Unable to Trade a Standard Contract,
Trade up to 5 Mini Lots or 50 Micro Lots
$20,000 Account
2% of $20,000 = $400 Max Loss
P = $400 / 30 PIPS Trade up to 1 Standard Lot or 13 Mini Lots
$35,000 Account
2% of $35,000 = $700 Max Loss
P = $700 / 30 PIPS
Trade up to 2 Standard Lots or 23 Mini Lots
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$25,000 Account
2% of $25,000 = $500 Max Loss
P = $500 / 20 PIPS
Trade up to 2 Standard Lots or 25 Mini Lots
$50,000 Account
2% of $50,000 = $1000 Max Loss per Trade
P = $1000 / 20 PIPS
Trade up to 5 Standard Lots or 50 Mini Lots
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Multiple Open Positions - Trade Sizing Model
Lets say, for example, with a $10,000account balance
Youre willing to risk 2% of your $10,000 account balance on any one trade and you have ONE
Open Position and you are looking to put on another Position, you have to assume the FirstOpen Position may be a Losing Trade, therefore, you need to base your Position Size of the
Second Position on and account balance of $9,800.
FirstTrade ($10,000 x .02 = $200) or C= $200
SecondTrade ($9,800 x .02 = $196) or C= $196
ThirdTrade ($9,604 x .02 = $192) or C= $192
First Position (based on Account Balance of $10,000)
@ $1.00 per Contract, $200 /$50 ($1.00 x 50 pips) =4 Mini FX Contracts
@ $0.10 per Contract, $200 / $5 ($0.10 x 50 pips) =40 MicroFX Contracts
Second Position (based on account balance of $9,800)
@ $1.00 per Contract, $196 /$50 ($1.00 x 50 pips) =3 Mini FX Contracts
@ $0.10 per Contract, $196 /$5 ($1.00 x 50 pips) =39 Micro FX Contracts
Third Position (based on account balance of $9,604)
@ $1.00 per Contract, $192 /$50 ($1.00 x 50 pips) =3 MiniFX Contracts
@ $0.10 per Contract, $192 /$5 ($1.00 x 50 pips) =38 Micro FX Contracts
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Money Management / Trading Sizing Tips
Have a written Trading Planthis will help you stay focused on your goal
of trading success. In addition, it will help you learn from your mistakes and
successes and thereby will help improve you trading abilities as time goes by.
You should look to only take trades where there is relatively low risk
compared to the reward potential for the trade.
Always use well placed stop-loss ordersthis is the only way to limit any
damage to your account and will help ensure your overall trading success. You need to be willing to short the market as much as youre willing to buy
the market.
Never risk more than 2% of your entire account on any one single trade.
When you have a profitable month, pay yourself by withdrawing some
money from your account and put it in the bank.
Until you know your trading methodology real well, I recommend that you
risk a maximum of 1% of your entire account equity on any one position.
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A Quick Word on Trader Psychology
One huge reason why successful trading can be so
difficult to achieve is the emotions that are wrapped upin the money we trade. If in our minds we are equating
the money on the next trade with the money needed for
the car payment, the kids tuition money, or the
mortgage, we are on a sure path to trading failure. If itis money we cant afford to lose, it is money we simply
cant afford to trade. If we attach emotions to the
money at risk, we are much more likely to commit
trading errors, which is as bad as having a bad trading
methodology to follow.
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Trading Insight
Something that has had a profound effect on my investing comes
from Norman Vincent Peale, author of The Power of PositiveThinking
"People become really quite remarkable when they start thinking
that they can do things. When they believe in themselves; they have
the first secret of success." When you feel that you can actually takecontrol of your trading and investment destiny, the empowerment
of that control will take you to the success you are seeking.
If you think you can...or if you think you can't...you're right.- Henry Ford
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FOR X FOR PROFITS
A Big THANK YOU!So, there you have it; everything that Ive shown you and taught you over the last few weeks in one quick, easy reference guide.
This will make it much easier for you to study and learn . . . so you can start applying the material immediately in your own
trading success!
First, you learned The Truth About FOREX Trends,which is my famous Market Flow Analysis Method (MFAM). Once
you fully understand what is taught here, you will be amazed at how much better a trader you will become. You will be on the
right side of the market a majority of the time. And please remember, you can apply these same concepts in any market and
any time frame you choose to trade!
You then learned 4 Powerful FOREX Price Patterns, which will help you pinpoint market entries and exits like a true
professional trader. All the crucial details are outlined for easy implementation and execution for your own trading success.
Finally, you learned all about Money Management & Position Sizing.Without this very critical aspect as part of yourtrading plan, it would be almost impossible to make money consistently in the markets. Now, you finally have that missing par t
of the puzzle that most traders dont learn about and use correctly.
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FOR X FOR PROFITS
Once again, I would like to put out a Big THANK YOUto all of you who participated in my video trading series andlive webinar! Words cannot begin to express my gratitude to all of you who posted all the wonderful comments on my blog.
I want you to know that its my pleasure to give you these trading strategies for you to benefit in your own trading. Ive en joyed
putting all this trading information together for youprobably a whole lot more than you enjoyed receiving it.
If you have any questions, please dont hesitate to contact me at (800) 664-3343 or (248) 593-5851; I would love to hear from
you. Also, be sure to visit my website, www.TradingConceptsInc.com, so that I can send you more videos, articles, trading tips, and
tricks to help you even more in your journey to become a better and more consistently profitable trader.
Yours in trading success,
Todd itchell
Todd Mitchell
www.TradingConceptsInc.com(800) 664-3343 / (248) 593-5851
http://www.tradingconceptsinc.com/http://www.tradingconceptsinc.com/http://www.tradingconceptsinc.com/http://www.tradingconceptsinc.com/