The Simple Dance Part Two.pdf

8/10/2019 The Simple Dance Part Two.pdf

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The Dance

Trading Manual

for the M1 Charts

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Contents

Table of Contents

Contents.....................................................................................................................................................2Legal Disclaimer:.......................................................................................................................................3Author's Note:............................................................................................................................................!hat this manual D"#$ N"T co%er.........................................................................................................&The $ecrets of Trading...............................................................................................................................Modified for M1 Trading(........................................................................................................................1)*art T+o ,egins.......................................................................................................................................11"anda Charts............................................................................................................................................11About "anda and -ound Numbers..........................................................................................................31M $etu/ As 0 Trade 0t.............................................................................................................................31Dancing *ractice .....................................................................................................................................3

0t's A ,usiness (((.....................................................................................................................................3&Master The Trades (.................................................................................................................................1Mae 0t ours (.........................................................................................................................................2

Co/right Cla errell4 2))5 6 2)1) an effort to change this basic set of rules of the strateg isstrictl forbidden unless /rior +ritten /ermission is granted b the author.

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Legal Disclaimer:

Trading foreign currencies is an extremely risky activitybut is also a /otentiall /rofitable o//ortunitfor educated and e7/erienced in%estors. ,efore deciding to /artici/ate in the ore7 maret4 ou should

carefull consider our in%estment ob8ecti%es4 le%el of e7/erience and ris a//etite. Most importantly,do not invest money you cannot afford to lose. Let me /ut this another +a. 0f ou too the moneou are considering using in "-#94 lit it on fire and laid it in an ashtra and watched it burn toashesand cannot li%e +ith that result4 then ou cannot afford to trade "-#9 +ith that mone.

There is considerable e7/osure to ris in an foreign e7change transaction. An transaction in%ol%ingcurrencies in%ol%es riss including4 but not limited to4 the /otential for changing /olitical andoreconomic conditions that ma substantiall affect the /rice or li;uidit of a currenc4 the ris ofsettlement discre/ancies4 broer errors and malfeasance4 outright fraud and man others.

Moreo%er4 the le%eraged nature of 9 trading means that an maret mo%ement +ill ha%e an e;uall/ro/ortional effect on our de/osited funds. This ma +or against ou as +ell as for ou. The

/ossibilit e7ists that ou could sustain a total loss of all initiall de/osited margin funds and bere;uired to de/osit additional funds to maintain our /osition +ith an gi%en broer. 0f ou fail to meetan margin calls +ithin the time /rescribed4 our trading /osition ma be li;uidated and ou ma beres/onsible for an resulting losses4 including amounts /otentiall more than our de/osit.

The content /ro%ided herein is /ut for+ard in good faith and belie%ed to be accurate and effecti%e4ho+e%er4 there are no e7/licit or im/licit +arranties of an ind made in connection +ith thisinformation. $hould ou choose to use this strateg4 ou +ill be trading e7clusi%el at our o+n ris ofour o+n free +ill.

, using this $trateg4 the reader


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Author's Note:

Learning to trade is a %er lonel and /ersonal thing. The 8ourne can be e7tremel frustrating4 isalmost al+as a lonel 8ourne4 but is al+as +orth it.

-ule number 1 in learning to trade ore7 is that ou can get e%erthing ou need for free if ou are+illing to do some research and some +or on our o+n. *aing for >sstems? is stu/id. The are adime a do@en and al+as +orth less than ou /a for them. our o+n mind and the charts is the onlthing ou reall need. ,en8amin franlin said4 >#m/t our /urse into our mind and our /urse +illne%er be em/t(?

That is ama@ingl good ad%ice. Training is +orth /aing for4 but in ore74 ou can get all ou coulde%er +ant or need mostl for free. !ith that said4 there is something to be said for /aid training in that/eo/le mostl discount the %alue of things the recei%e for free and often +al right /ast the goldnuggets looing for /rite selffulfilling /ro/hecies.? or e7am/le4 ibonacci lines4 #lliot !a%es4 Andre+s *itchfors4 Mo%ing

A%erages4 $tochastics and $u//ort -esistance le%els all +or reall +ell because so %er4 %er man/eo/le use them4 but the often fail as +ell because some larger /laer mo%es the maret or some otherinfluence does.

>-ound Numbers? also +or %er +ell for the same reasons although there is a solid /schologicalreason for this one. *eo/le tend to >round? the numbers in their li%es and the do the same in trading.There is nothing magical in an of this4 8ust /lain old human /scholog at +or. ear ee/s /eo/letra//ed and maes certain le%els stronger than others. Breed does much the same 8ust in a different+a.

0f ou +atch /rice action around Andre+'s /itchfors4 ou +ill see the e7act same sort of mo%ement asou do around longer term Mo%ing A%erages. Nature lo%es a balance and /eo/le instincti%el

understand that.

!hat goes u/ must come do+n4 e%erone no+s that( 0nertia ee/s mo%ing ob8ects in motion andresists ob8ects at rest from mo%ement. #%erone no+s that too(

Life is filled +ith ccles4 +hich scientists no+ call >circadian rhthm.? Night and da4 rise and fall ofthe tides4 slee/ and +aing4 e7citement and de/ression. #%erone no+s this too(

ractal technolog is the science of ho+ larger things are built on smaller things. ust loo at a tree."ne line >branches? into multi/le lines and e%entuall +e ha%e the sha/e +e recogni@e trees to ha%e4both in branches and roots.

*eo/le ha%e been tring to a//l all these /rinci/les in differing methods to the marets from +hen the

first maret /lace +as e%er created. ust loo at ho+ long the a/anese e/t records of the rice marets+ith candlestic charts. The same is true of the grain marets in more #uro/ean areas4 8ust not +ithcandle stics.

The +hole /oint in all this is that life is built on selffulfilling /ro/hecies and e7/ectancies. $o are themarets4 the same t/es of /ersonalities that e7ist and mae life in general so un/redictable e7ist in themarets as +ell4 des/ite all their su//osed education and analsis. 0t is s/ecificall these items and>selffulfilling /ro/hecies? that mae ore7 tradeable and /rofitable if ou learn to understand and use


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them effecti%el. Also4 each /erson is built different and different >selffulfilling /ro/hecies? +ill +orfor them because the ha%e a tendenc to see and recogni@e them based on their o+n /ersonalites.

Trading is no more difficult than finding one or more of these that ou can understand4 >see? clearl ona chart and trade effecti%el. 0t's reall more lie a dance4 /oer or a %ideo game than anone +ants toadmit. ou can mae it a lot more difficult and com/le7 than this4 but ou do so at our o+n /eril andcost and it WILLslo+ do+n our learning cur%e b ears.

There is an old countr +estern song that sas4 >"ne ste/ for+ard and t+o ste/s bac4 no one gets %erfar lie that.? ,T4 that is not reall true.

0n a dance there are t+o /artners. "ne leads4 one follo+s. or the most /art the >male? leads and the>female? follo+s. $he is tra%eling along in the dance 8ust as fast as he is4 onl she is doing itbac+ards( $he is also taing all of her >cues? from >him? and doing it in high heels most of the time.!ithout both /artners there +ould be no dance.

0n trading4 the maret is AL!A$ the >male? and traders are ALL >female? taing their cues from>him? AND4 the must do it in res/onse ra/idl and bac+ards.

0f one o%er anal@es a dance techni;ue the mess it u/4 the >flo+? of the dance often suffer because of

it and sometimes the e%en get hurt. 0f the don't understand the cues the same thing ha//ens4 onloften it's +orse . Trading is no different. $o4 learn to dance. Learn to tae cues from the maret and 8ustha%e fun( 0f it's too e7citing4 ou're taing far to large of a ris in trading. 0f it's sort of boring4 ou/robabl ha%e it right and ou can begin to focus on our >/artner? and learn to ha%e fun.

Credit where Credit is Due!

This strateg is a combination of t+o main strategies that 0 greatl admire. The first is trading Mo%ingA%erage bounces +hich osh ord taught me. $econd is ames1& for his thread on *rice Action ,ars at

ore7actor. Lastl 0 learned about >-ound Numbers? and their effects reading aco's Thread alsoon . aco e%identl turned out to be a scammer4 but his stuff about >-ound Numbers? reall hel/edme a lot. 0f that bothers ou4 get o%er it. ou can learn as much from a thief as ou can from a/rofessor if ou're a good student.

All 0 reall did +as to listen attenti%el to +hat osh taught me and document man of the >nuances? oftrading Mo%ing A%erages the +a he does it. 0t is ama@ingl /o+erful(

A Word About Idiots and Neanderthals

This strateg +as originall /osted to ore7actor +ith the intent of it being a >for free? trading

strateg. Nothing +as e%er ased for in return and no offers +ere e%er made in regards to its use4training to use it4 and the Author N#E#- #E#- trades AN managed accounts for anone. There isno need to.

$till4 for some reason a fe+ decided that the Author's >+riting stle? +as similar to some idiot +hosu//osedl defrauded some on that forum b trading managed accounts. Though 0 am not familiar+ith the stor4 let me sa this. AN"N# +ho #E#- gi%es their hard earned cash to a stranger themeet on an 0nternet forum for trading or e%en in the >real +orld? in >real life?4 is as much of an idiot as


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the /erson doing the trading is. ,"TF of them are reall stu/id and both get +hat the deser%eultimatel.

!ith that said4 the Neanderthals on ore7actor4 +ithout an e%idence of an ind4 and the lamebrained site administrator +ho admitted in his /ost banning the Author that he had N" hard e%idence ofAN ind4 still destroed the teaching of a %er solid and free strateg to man +ho reall needed thatfree teaching.

The strateg is still there in the >-eccle ,in? if ou +ant more information on this basic set of rules atthe follo+ing lin and a trader using the screen name of Gostas1 has taen it u/on himself to continuethe original +or4 +ith this Author's a//ro%al. TF0$ manual is /robabl /osted on his thread to ee/m +ord that 0 +ould re+or it a bit and to assist him in his efforts to continue the +or teaching TheDance.

The Dance is here: htt/:+++.fore7factor.comsho+thread./h/HtI22&5

Gostas1's >Choros? thread is here: htt/:+++.fore7factor.comsho+thread./h/HtI23&21)

Disclaimer: The Author of this manual has no relation to the trader no+n as Gostas14 and is N"Tres/onsible in AN !A for +hat is taught on that thread and acce/ts N" liabilit in an +a4 sha/e4

form or fashion for +hat occurs on that thread.

What this manual DOE NOT coer"

This manual's /ur/ose is to clean u/ and sim/lif a bit some of the rules and the basics of The Dancefore7 trading strateg. It is NOT a #s$stem%and re;uires the reader to actuall learn to trade. ,ut there+ards for that learning are staggering indeed +ith an a%erage of J3K to JK increase dail /ossibleuntil the account becomes large enough that li;uidit becomes an issue. #%en then4 consistanc is notonl /ossible4 it is /robable if the rules are follo+ed.

0T D"#$ N"T include long discussions of >ad%anced? rules though some are alluded to in the sections+here using >!ics? is mentioned and others.

" can also figure out the ad%anced rules sim/l b their names 0 ou are +illing to s/end sometime in the $imulator and in trading Demo for a +hile

!A&NIN!!: The #adanced rules% are NOT necessar$ to ma(e solid and large returns" I) $ouinsist on them* $ou should re+ealuate $our reason )or wanting them" The basics reall$ are

enough"

The Ad%anced -ules4 if 0 e%er decide to mae them /ublic after m e7/erience at teaching for free at4 are sing Dail !ics


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that consistenc leads to success.

ecret ,4: 5aster $oursel)* master $our trading"

our o+n emotions are the onl real >enem? in all of trading. ,roers +ho mani/ulate /rice feedscannot defeat ou. Maret maers +ho charge large s/reads cannot defeat ou. The ne+s cannotdefeat ou. Changing marets cannot defeat ou.

reed+ill decimate ou accounts4 crush our strategies4 ill our dreams and add ears to our effortsin trading. Breed is e7tremel dece/ti%e. 0t's not +anting to ha%e large accounts4 it's not +anting to be+ealth. 0n trading4 greed is none of the normal things ou are taught it is. 0n trading4 it's +anting toget that ne7t /oint +hen the strateg sas our done. 0t's +anting 3) /oints +hen the strateg's rulessa 1 is enough. 0t's +anting to s+ing for the fences on e%er single trade. Breed is not being +illingto tae it slo+ and allo+ it to gro+. 0t's not allo+ing com/ounding to +or and +anting to ha%e it>no+.?

6ear+ill ill our trading and add ears to our effort of being successful. The rules of an strategare desined to tae the emotions out of our trading. Allo+ing ourself to >second guess? the rules isfear. Not taing a trade instantl on the signal is fear. #7iting a trade before the rules call for is fear.Anthing that ee/s ou from follo+ing our rules is fear and it short circuits all of our efforts and all

of our training and adds ears to our trading and robs ou of success. ou must eliminate it fromour trading.

&eenge +ill destro ou as +ell. ou are not the target of an great cons/irac and the maretcouldn't care less about our trade or our /osition. The broers ma +ant ou to be a %ictim4 buttrading out of a desire for re%enge +ill se+ our thought and t+ist +hat ou >see? on the charts. 0t+ill defeat ou as +ill greed and fear.

Arrogance+ill destro ou 8ust as fast as either of these others. Trading from the /ers/ecti%e of anemotion +ill ill our trading. Arrogance +ill do it 8ust as fast as greed4 fear or re%enge. ou are N"Tmistae /roof. #%en 0 ou belie%e ou ha%e mastered a strateg4 an strateg ou +ill still maemistaes. Arrogance +ill lead ou to e%en bigger mistaes4 then to re%enge to tr to mae u/ for it4

then to greed to tr to get >8ust a little more? so ou can earn bac +hat ou lost.

ecret ,7: There are no ma(eu2 trades"

Trade each trade and each session as if it +ere the onl one. esterda is gone and does not deser%e tobe remembered in trading. The onl thing that e7ists in successful4 consistent trading is the trade ouare about to /lace. Mae it the best on /ossible and forget the /ast so our emotions don't ha%e a /laceto tae hold on ou.

ecret ,8: 9ersistence and attitude will oercome eer$thing"

0f ou belie%e ou can do this4 ou can. 0f ou do not belie%e that4 ;uit no+. Nothing can sto/ ordefeat ou but ou. That is true of e%erthing in life4 not 8ust trading. 0t does ho+e%er a//l

s/ecificall to trading. Ne%er e%er listen to anone +ho sas ou can't trade.ecret ,: I) it's not boring* $ou are NOT trading correctl$"

Trading is a %er lonel business for the most /art. *eo/le lo%e to do things in grou/s. Trading ise7tremel /ersonal. *eo/le lo%e e7citement and things that are interesting. $"L0D trading ise7ce/tionall boring and lonel. "ne of the hardest battles ou +ill fight is to 8ust trade and not tr to>fi7 it? or >im/ro%e it.? This strateg +ors da in and da out. 0n fact4 if ou learn to tae onl the>/erfect? signals4 ou +ill mae more mone in the good /oints of /rice mo%ement than ou e%er


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+ould tring to >fi7 it.?

0f ou earned 3K to 1)K /er da during the $"L0D /rice mo%ements and entries4 and a%oided theside+as das alone4 ou could become +ealth in a single ear starting +ith as little as O1)).)). The/o+er of com/ounding4 combined +ith solid entries +ould tae O1)).)) to o%er O&))4))).)) in 3))das of trading. This assumes that ou mae some good trades and some bad trades but a%erage onl3K /er da. A%eraging K /er da +ould tae ou to o%er se%eral million.

There are those +ho +ould lie to tr to tell ou it's not /ossible4 but it is and the most difficult /art isit's boring.

ecret ,;: ome da$s $ou grimlins? of a bad da +hen for no a//arentreason4 someone +hose sill and /hsical /ro+ess are not e%en close sim/l trashes them. There areno reasons4 to rationales4 no analsis that can sto/ it. 0t +ill ha//en4 but ou can limit it( Trading is nodifferent.

This is the reason for rules. The are to su/ersede our mind4 instincts4 emotions and all of our effortsto o%ercome it4 +hich runs counter to e%erthing +e ha%e e%er been taught in life. $T"*( !al a+a

+hen ou start %iolating AN rules4 #$*#C0ALL the trades and $T"* or the T!" L"$$ and$T"* rules(

L#A-N to limit our arrogance and /ride of ho+ good ou ha%e become4 or ho+ good our strateg is.L#A-N to limit our losses( ollo+ the -L#$(


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5odi)ied )or 5- Trading!

This manual has been modified to allo+ for trading on M1. 0 ha%e left in man of the M1 images forillustration /ur/oses "NL as 0 didn't +ant to +aste a lot of time going o%er ground alread co%ered in/re%ious %ersions of the strateg.

M1 is a good +a to >mil? mo%es4 but it is E#- fast trading and not for the feint of heart. ,#CA-#L.


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9art Two =egins

Oanda Charts

This is the /rocess for setting u/ "anda the +a 0 ha%e it setu/.

"/en the /latform and login and ou +ill see this screen first.

This is the basic setu/ and from here ou ha%e to start to >customi@e? the +a ou +ant things to +or.irst4 a//l the three lines of The Dance b clicing the >Add $tud? dro/ do+n list at the lo+er left of

the chart +indo+ and add the 1 #MA4 the 3 $ma and the ) #ma in that order4 then right clic eachand a//l a color ou lie to each as seen in this ne7t screen.


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0t's /rett intuiti%e u/ to this /oint. Then once that's done4 ou can start to setu/ our trading >setu/?as ou +ant it. Then clic the little >double bo7? icon at the to/ left of the chart area and ou can o/enthree e7actl same +indo+s +hich ou can then drag and resi@e to fit the screen the +a 0 set mine u/.Fere is a loo at ho+ that ha//ens. #ach +indo+ ou create ou must >drag? out of the +a so oucan create the ne7t of the three as seen here belo+.


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"nce ou ha%e the tree created4 drag and dro/ them and resi@e them so the loo lie this and lea%eabout an inch at the bottom of the screen as +e +ill be using that in a minute as +ell4 as seen herebelo+. After dragging and resi@ing4 ou can then select the time frame for each +indo+ as seen4 thenthe currenc from the a//ro/riate dro/ do+ns as seen belo+ as +ell.


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"nce this is done4 ou +ill need to find he original +indo+4 +hich ou N#E#- close as it +ill shutdo+n the entire a//lication. 0n that +indo+4 there is a /lace at the to/ +here our >li%e? trades a//earand there is a >double bo7? to o/en that as +ell so ou can /lace it at the bottom of the ne+l resi@ed+indo+s4 com/leting the >loo? and the abilit to close all o/en trades


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"nce created4 drag into /lace and stretch it across the bottom lie 0 do as seen here.


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This com/letes the >setu/? of the trading are lie 0 use it +hen 0 use "anda. Then go bac to that main+indo+ and clic >Tools? then >$a%e Current *rofile? so the setu/ +ill al+as load this +a for ou.,elo+ is a screen shot of that menu item to clic.


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"nce our's loos lie this4 then go to the Puotes tab and and remo%e all but the B and # and/erha/s A currencies as sho+n belo+. Then clic A//l and $a%e and the ;uotes +indo+ +e deal+ith ne7t +ill loo right +ith the right currencies in it and this bo7 +ill disa//ear. Fere is ho+ to dothe remo%al444 8ust highlight all the currencies ou +ant to remo%e and lic the correct arro+ as seen.

Clic on each currenc "N# T0M# and it +ill sta highlighted until ou select all the ones ou +ant toremo%e then clic >remo%e? as seen and then a//l and sa%e as e7/lained.


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The Puotes +indo+ +ill o/en in a ne+ +indo+ then ou can minimi@e the main +indo+ for the lasttime before sa%ing the current /rofile one last time. And ou can then drag and resi@e the +indo+ asseen. "nce ou ha%e it the si@e and location ou +ant4 clic the >Puotes? tab4 then the little funnlooing icon m mouse is on in this screen shot and then the second image is ho+ our setu/ +ill loo.This +ill allo+ >one touch? entries and >set? our com/ounding for this session.


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$econd image is belo+.

The abo%e image sho+s +hat it +ill loo lie +hen ou clic on a >$ell? for a one clic trade. 0t doesthe e7act same +ith a >bu? trade and it +ill /lace the $L and T* and the trailing $L immediatel.N#E#- trade +ithout a $L in /lace as the do not ha%e a trading des of an ind. TF# D" ha%ee7cellent li%e chat at all times the trading is going on. ,ut ou +ill4 from time to time notice some>outages? on the /latform4 but the do a great 8ob of customer su//ort e%en at that and the s/reads areso small it's +orth learning and /utting u/ +ith the issues that do come u/4 in m humble o/inion.

"nce it's setu/4 /la +ith it until ou're comfortable +ith it. The trades are near instant and the s/readsare reall lo+. 2 /i/s on both B and # e7ce/t at ne+s times +hen it +idens a lot


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Oanda Color cheme ettings

0t too me a long time to figure out ho+ to mae "anda loo lie m Metatrader chart tem/lates did.ou ha%e to use the Custom color scheme and learn to edit it. The first screen shot belo+ sho+s +hereto find it. The follo+ing series after that sho+ the settings on m >Custom? color scheme so it looslie m other Metatrader Charts.


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$ettings:


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About Oanda and &ound Numbers

"anda does not allo+ for man of the cherished MT indicators such as >round numbers? ,T4 oucan still use them. ou 8ust ha%e to /lace them manuall on the main chart4 then o/en all other chartsfrom that one chart so the +ill alread be there. Then +hen ou sa%e the /rofile4 the +ill al+as be

there for ou. -emember to set them to >gra? and >dotted? lines so the match the color scheme anddon't distract ou too much.

5$ etu2 As I Trade It

Notice that 0 found a cloc to re/lace the candle time indicator in MT. 0t's called the >Borg? clocand ou can set alarms manuall for ne+s e%ents. Fere is the lin to the ahoo !idget that creates thecloc.

htt/:+idgets.ahoo.com+idgetsgorgcloc -eall hel/s in timing things /ro/erl.
http://widgets.yahoo.com/widgets/gorgy-clockhttp://widgets.yahoo.com/widgets/gorgy-clock


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About Ad%anced -ules

There are man4 man +as to use the lines of The Dance. A lot of tal on the thread has gi%en to+hat the might be. There are some4 and 0'll tal a small bit about them here4 but don't get caught u/ inthem. Learn and master the basics first4 then ou +ill be read to create our "!N >ad%anced rules?based on our e7/erience and +hat " see in the charts.

coo2ed 02> coo2ed Awa$:

This is /rett sim/le4 +hen the 1 #MA >turns? on one of the charts4 the bar after it turns often reteststhe line. $ometimes the second one does lie a >touch? trade in a normal setu/. #ither +a4 that retestoften /resents a fairl solid counter trend entr +orth at least 2) /i/s. 0f ou are using the $cri/ts/ro/erl4 ou can tae the first T* out reall ;uic4 mo%e to ,e and +ait for the trade to run our +a4or bounce at the higher lines and re%erse bac into the trend of the moment. ust +atch the charts4ou'll see +hat 0 mean.

Wic(ed:

The ti/s of %er long +ics on M14 and on F1 and D1 /resent some e7tremel /o+erful T* targets+hen /rice is heading that +a4 and the can also /resent strong re%erse trades as +ell. There is areason that /rice /re%iousl re%ersed lea%ing that long +ic4 and most liel that reason is still in /lafor at least 2) to ) /i/s after +hich /rice ma again head to+ard that +ic ti/. Learning to +atch forthem and use them is a %er strong +a to find good targets for e7its to ma7imi@e the trade4 and a /laceto find solid re%erse trades as +ell. -emember to ee/ reall4 reall tight $Ls in those area.

?ome on The &ange:

-anging marets can be a real challenge and more than once the ha%e iced m little ros red( The

best +a to trade DA0L ranging marets is to lea%e them alone. N"-MAL ranging marets /la %ernicel into The Dance's lines if that range is 1)) /i/s or so from high to lo+.

,T +hen that range is 0NT-ADA and onl about ) to /i/s4 most 8ust call it cho/ and +ala+a. 0 often do that because of the attention and focus needed to trade them /ro/erl. 0f ou reall+ant to tacle it though4 trade it the +a most +ould4 dra+ a >channel? at the most common highs andlo+s4 TF#N loo for bounces off the 3) lines for about 1 /i/s to mil it4 but D" N"T e7/ectanthing larger(

ou can also tae trades +hen the 1) >scoo/s? /rice u/ or do+n at the e7tremes of the range4 but again4D" N"T e7/ect more than about 1 /i/s. $"M#T0M#$ ou'll get luc and hit a good ) or 1)) /i/

trade in this stuff4 but mostl 8ust the 1) /i/s and 2) /i/s of trading


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$ummar

0f ou tae the time to learn to use the *rice Action and bounces of the Confluence of #MAs and>-ound Numbers? as a filters for entries and the #MAs as floating su//ort and resistance4 this strategcan literall mae ou rich. The man +ho hel/ed me learn most of this and to +rite do+n all the rulesa%erages a//ro7imatel Q) to 1)) /i/s /er da. Fe does it da in4 da out4 no matter +hat the maret.

Fe did it during the most %olatile maret e%er seen in 2))Q and 2))5. Fe did it in the consolidation/eriod that follo+ed and he +as doing it before that during the /re%ious trending maret.

$e%eral times 0 +atched him earn u/+ards of )) /i/s /er +ee and es4 those are >real? /i/s at a fulllot each /i/ +ith onl a O1)4))).)) account to boot. 0n addition4 se%eral times he has taen a O)).))account and gro+n it to o%er O4))).)) in less than t+o months4 then mo%e bac to earning a li%ing+ith that account.

0f ou thin ou need lots of mone to start4 thin again. $tarting +ith a large account is a great +a tolose a lot of mone. 0 +atched m friend tae a O3)).)) dollar account to O1Q)).)) in about & +ees.A moth later that same account had o%er O4))).)) in it. ols444 that's a return of o%er 1))K e%er

+ee and a half. 0f he can do it4 so can ou.

, the +a4 as of this +riting he is trading to standard lots e%er trade. ou do the math on that.0t's about a million a ear income(

*atience is the main e in all this. *atience allo+s ou to be less emotionall in%ol%ed so ou don'tmae lots of dumb mistaes. STIC T! T"# $%L#S4 and ou +ill be 8ust fine.


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Dancing 9ractice

Learning to dance4 +hether it's real dancing or this strateg4 re;uires /ractice. Al+as /ractice beforemaing a fool of ourself on a li%e dance floor(

!ith that in mind4 there is a good +a to do that. The first and best +a to /ractice this is to use the$trateg Tester /ro%ided b Puantem. Fis thread is no+ in the ore7actor -eccle ,in4 but the toolis still a good tool. Fere is the lin htt/:+++.fore7factor.comsho+thread./h/HtI)2

ou +ill /robabl ha%e a tough time getting to an real >success? on it because of the +a it +ors4 atleast at first. ,ut stic +ith it and ou !0LL start seeing some success. The follo+ing are the ste/s toget good at this strateg. ou +ill also not be able to use the three chart setu/ because of ho+ the$trateg Tester +ors4 but it's great /ractice.

1. At first ou should 8ust start a chart in the Tester and acti%ate the tem/late >The Dance? for thechart. Then 8ust sit and +atch ho+ it acts and reacts around the Mo%ing A%erages and around

the -ound Number le%els on se%eral different currencies. This +ill start to de%elo/ our abilitto >see at a glance? +hen trades are forming. 0t +ill be as boring as sucing nails4 but do it forat least a da or so on as man currencies as ou can 8ust for the e7/erience of learning the +a/rice mo%es around the Mo%ing a%erages and -ound Numbers.

2. "nce ou feel comfortable +ith the Tester4 start trading it and set the slide bar to no more than

2 so /rice action is slo+ enough for ou to actuall mae trades in the tester. Gee/ +ith ituntil ou are starting to see some success in trading this strateg. -emember to mo%e our $L/rogressi%el and to mo%e the T* +a out in front to let the trades run if the do see? the tradesso ou can understand ho+ the start and ho+ to enter them /ro/erl.

3. After no more than a fe+ das or e%en better4 /erha/s a fe+ +ees4 ou should be at a /oint+here ou can >see? the trades forming before ou actuall tae them. !hen that ha//ens4 it'stime to start to mo%e to a more >li%e? format on a Demo account. Demo trading itself isn't+orth much unless ou ha%e alread defined in ad%ance4 strict trading rules and had somee7/osure to them so ou can actuall stic to them. !hile Demo trading4 trade e7clusi%el themaret times the -ules call for. ou !0LL begin to see the trades better4 and ou !0LL start toha%e some success4 though it ma still be a +hile before ou reach an ind of consistenc in

our trading4 but stic +ith it.

. !hen ou feel comfortable +ith the li%e sessions in the Demo account4 o/en a li%e account+ith a broer ou feel ou might lie. There are se%eral that are acce/table lie Al/ari4 0,94A%a94 9CM4 9DD4 "anda and man more. ust do a search and find one ou thin oucan li%e +ith. -emember4 no broer is reall >good? all of them ha%e their issues. *ersonall4 0use 0,9. ust remember to N#E#- de/osit more than a O1)).)) in an account until ou get
http://www.forexfactory.com/showthread.php?t=70742http://www.forexfactory.com/showthread.php?t=70742


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reall4 reall consistent +ith this strateg. Then4 let the account gro+ itself as ou trade. Thereis nothing stronger or more satisfing that going through that /rocess4 and ou !0LLe7/erience all the >issues? and >/schological? challenges as +ith a larger account4 but +ithoutlosing huge sums of cash.

. #N" T-AD0NB ((( Don't e%er let it become a frustration to ou. -eali@e it's a challenge and

something ou CAN and !0LL master o%er time. 0t +ill tae a +hile4 so be /atient +ithourself as +ell as +ith the trading.


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It's A =usiness !!!

As +ith all things4 it taes a bit of time to get good at trading4 but no +here near as much time as most+ill tell ou. 0 ha%e heard of traders taing from t+o to fi%e ears before becoming consistent at

trading and some e%en longer.

0f ou treat this as a business4 not a game of chance4 then ou can dramaticall shorten the time needed.All businesses first of all4 ha%e a ,usiness *lan. !hen 0 started trading4 that /art mstified me. 0 ha%ebeen an entre/reneur from the time 0 +as %er oung and had m first >real? business4 as the o+ner4 bthe time 0 +as 22. ,ut for some reason4 0 couldn't thin of trading that +a4 not at first an+a. Fo+in the +orld do ou create a >,usiness *lan? for tradingH The ans+er follo+s.

,-" T?I I A =0INE

$o444 Lesson one is learn that this is a business. 0t +ill re;uire some time and dedication to mae our

ne+ business successful. D#D0CAT# T0M# to our ne+ business. Decide on +hich session of themaret and +hich currenc ou +ill be trading and stic to it( D" N"T CFANB# our time4 thecurrenc or the strateg. $tic +ith it( Most +ho lose4 lose because the +ill not >stic +ith it.?

um/ing around a lot +ill ill our ne+ business. 0f our customers couldn't count on ourmerchandise being the same and of high ;ualit and ou being at the same /lace to do business all thetime4 the +ould soon sto/ sho//ing +ith ou. " are our customer. 0f ou 8um/ around4 ou losean chance at de%elo/ing a high ;ualit /roduct


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The ne7t thing is immensel im/ortant4 tattoo it on our brain4 car%e it in the +all behind ourcom/uter so ou can see it and ne%er forget it.

,1" 6OLLOW T?E &0LE TO T?E LETTE& AND DO NOT @A&/ 6&O5 T?E5 !!

The -ules +ill hel/ ou a%oid fear and greed4 the t+o strongest illers in this industr. This /air can

reall get ou messed u/ /schologicall and get ou to the /oint of +anting to ;uit. The funn thingis that ou ma not e%en thin ou are being greed or fearful4 so let me gi%e ou an e7am/le.

#A-:

!hen ou trade4 if ou hesitate in the slightest in e7ecuting4 /ulling the trigger4 an indecision at all isfear. The same thing a//lies to e7iting a trade before the -ules tell ou to. ,"TF of these fear basedscenarios +ill ill our ne+ business before ou ha%e a chance to e%en start it. ,"TF +ill cost ou/i/s.

Fesitating maes ou miss o//ortunities AND !"-$T4 it maes ou doubt the -ules4 our 8udgment

and decisions. T"'T is fataland it is all fear based. As our account gro+s4 fear +ill tr to tell outhat for some reason4 1)K of O1)).)) is less stressful to lose than 1)K of O14))).)) or 1)K ofO1))4))).)). The truth is it is still 8ust 1)K and nothing more. 0t's all a matter of /ers/ecti%e and asour account gro+s4 so should our /ers/ecti%e(

The /roblem is not the /ercentage4 it is our familiarit +ith the amounts re/resented that o/ens a doorto fear in our trading. 0 once had a boss +ho told me m main /roblem in sales +hat that 0 had ne%erearned a si7 figure income4 but once 0 did4 it +ould become easier and easier to earn it and to learn togro+ it. Fe +as right. TF# $AM# A**L0#$ T" T-AD0NB(

0f ou listen to all the nasaers telling ou ho+ it >can't be done4? their /oison +ill infect ou +ith the

same doubts and limitations. A%oid them at all costs and find /eo/le +ho can encourage ou +ithoutselling ou their >cra/? +a of doing things. There are +a more than enough free resources around tomae sure ou get +here ou +ant to be in our trading. ust D"N'T B0E# *(

B-##D:

Breed is also e7tremel innocuous in trading in it's /resentation. Looing to get >8ust one more /i/? isgreed 8ust as much as +anting to rob a ban. TF#-# 0$ N" D0#-#NC#4 es/eciall not +hen ouare trading. Fanging on to a losing trade too long is greed4 and also /erha/s fear. ear ou +ill lose ifou e7it a bad trade4 and greed that it +ill come bac to ou and ou ha%e to hang on to the trade.

Breed can mae ou not tae that first fe+ /i/s +hen the /rice mo%ement hesitates a tin bit too long.Breed +ill sa >+ell4 it's onl been a fe+ seconds longer than normal4? then it +ill sa4 >hang on a bit44it's still going our +a.? Then it +ill sa4 >but the trade +ill come bac reall ;uic.? All those arebased on Breed.

,3" TAE /O0& 9I9 NOW!

At the %er first sign of /rice hesitating too long4 tae +hat e%er /i/s ou ha%e on one /osition4 e%en if


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it's onl three /i/s( TAG# TF#M and mo%e to ,rea #%en on an other /osition ou ha%e o/en onthat currenc. Then sit bac and +ait confident that ou ha%e made a /rofit. There +ill be anothertrade along in a fe+ minutes and ou can catch more /i/s then too.

Don't be afraid to /ull the trigger to enter4 or to loc in those first fe+ /i/s4 or too greed4 +antingmore. TAG# "- *0*$ N"!( Gee/ in mind that the >time e7/osure? to the maret is at least as

/o+erful a ris as the /ercentage of our account ou trade +ith on each /osition. $hooting formulti/le shorter4 stronger trades is an a+esome +a to >TAG# "- *0*$ N"! (((?

,4" ET O0T NOW!

"nce ou hit our target for the trade4 or get an e7it signal4 B#T "T N"!( N#E#- +ait4 8ust getout and tae our /i/s. ou can al+as find another trade4 it ma e%en be better and gi%e ou more/i/s4 but remember the old saing >a bird in the hand is +orth t+o in the bushH? 0t's true444 the /i/s oualread ha%e earned are the best /i/s ou +ill e%er ha%e. TAG# TF#M N"!(

0t is es/eciall critical to follo+ the rules on this issue. 0t reduces ris4 increases our account4 builds

our confidence and a hundred other good things. >ou ne%er go broe taing a /rofit? is another oldbusiness ma7im. 0t's also true.

>A ;uic nicel is better than a slo+ dime.? TFAT one is ama@ingl true. Mone has a %er definitetime %alue and the more time ou s/end +aiting to earn that ne7t /i/4 is more time at ris. 0n fact4 ifou are using an account that increases our trade e%er time ou trade automaticall4 the smallertrades can build u/ ama@ingl ;uicl. 0n addition4 +aiting for that ne7t /i/ ma cost ou a better tradethat is currentl onl de%elo/ing on a different currenc(

Ne%er be too greed or to afraid to tae our /i/s N"!(

,7" WAIT 9ATIENTL/!!

>*atience is a %irtue.? This is the strongest lesson to learn in trading. ,# *AT0#NT in +aiting for theright setu/s to ha//en. !hen the sa >Let the maret come to ou4? this is +hat the mean4 ,#*AT0#NT. ou can't /ush a ri%er4 shoot /ool +ith a ro/e4 fall u/stairs4 or hurr the maret.

Maing lots of trades is the +rong a//roach in all situations. #%en in scal/ing4 there is a /erfect setu/to loo for. Taing substandard trades is an e7cruciating +a to learn /atience and e7tremel costl.-emember4 ou are learning a business4 not a cra/ shoot or some sort of gambling.

#%en in card games such as ,lac8ac4 *oer4 *inochle4 -umm and so on there are rules to li%e b and

%iolating the rules means certain death of the effort and e%entuall the enter/rise. 0t is the same in thebusiness of trading "-#9.

0f ou tae "NL the strong4 i.e. >/erfect? trade setu/s4 our /robabilit of success is much greater andthe /otential /rofit of the trades is also much higher.

No+4 if ou don't thin that business has much to do +ith /robabilities4 lie "-#94 let me enlightenou. N" "N# has a crstal ball on +hat /roduct4 or +hat ad%ertising +ill gain absolute success.


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There A-# strategies that +or much better than others and bring lots of success4 but it is still a>game? of /robabilities.

!hen ,urger Ging started4 the follo+ed a %er sim/le strateg. McDonald's +as alread e7tremelsuccessful and the lines of those +aiting to be ser%ed +ere gro+ing. $o4 the man +ho founded ,urgerGing thought of a sim/le strateg. 0t +as to build a burger sho/ across the street and count on the fact

that McDonald's had alread done the /ro/er research to be successful and then sim/l +ait for theo%erflo+ for his ne+ restaurants.

0t +as a sim/l brilliant /lan4 and ob%iousl +ored.

"-#9 is that sim/le. Trading the trend +ors4 using *rice Action bars +ors4 using su//ort andresistance +ors. The Maret >breathes? meaning that /rice rises and falls because of the com/etingtraders in buing and selling /ositions.

All of that is alread /ro%en in the histor of trading4 as +ell as the histor of "-#9. All that is leftis to find a $0M*L# method ou can use to im/lement those ideas.

The sim/ler to im/lement and >see? and use4 the more /rofitable the method or strateg +ill be.

Lastl4 no business model is stagnant or static. #%er business needs constant attention as customerneeds and desires and /roduct su//l and im/ro%ements as +ell as costs of doing business are in aconstant state of flu7. 0T 0$ N" D0#-#NT from "-#9.

!ith that in mind4 e%erthing in this manual u/ to this /oint is aimed at hel/ing ou to understand thatthis is a business and ou can master it and be +ildl successful. AND it should N"T tae ou ears toget there. All it reall taes is a decent4 sim/le business /lan4 lie this one built on the strategies andmethods /ro%en o%er decades to +or.

#%erthing in this manual and the attached #7cel s/readsheet is our business /lan. Gee/ it sim/le andstic to it. All business o+ners need some time to learn to master their business. ortunatel4 ou canmaster this one in our s/are time4 as long as ou treat it lie a business4 set aside dedicated time fortrading at the same time e%er da and stic to the rules e7clusi%el.

No+4 let's learn to actuall trade.

Master the ,asics irst

This is one of the most critical /arts of an business. The basics +ill mae or brea ou. The basics of

this strateg ha%e been laid out clearl in this manual. MA$T#- TF#M 0-$T4 before ou doanthing else4 MA$T#- TF# ,A$0C$. Master the constrainment entries and bounces off the )#MA 0-$T4 and use the >-ound Numbers? for guidance on e7its or to sta in a trade( Constrainmententries are the absolute ,#$T there are in this strateg. Loo for /rice being constrained b one of the#MAs of a confluence of #MAs and -ound Numbers before ou start tring to get fanc. There areenough of them to allo+ ou to mae tons of /i/s. MA$T#- TF#$# 0-$T(

Trade them relentlessl in demo or in a %er4 %er small li%e account until the become mind


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numbingl boring and com/letel refle7i%e. 0n other +ords4 mae it such a refle7 that +hen ou seethe good basic trade4 ou tae it +ithout a single thought. TF#N ou can mo%e to ma7imi@ing ourtrades.

5aster The Trades !

"nce ou ha%e mastered the ,asic -ules and #ntries and started to learn to tae better and fe+er tradesa bit4 it's time to start mastering the actual Trade itself. This is done b using Mone Managementsills and managing ris at the same time.

A lot has been said in man areas of minimi@ing the riss4 and lots of tal is about limiting ris b thesi@e of the trade. Most +ill tell ou not to ris more than 3K on an gi%en trade. To me4 this is more

of a /ersonal thing than a hard and fast rule.

0 no+ of traders +ho use 3K4 some +ho use 2K4 some +ho use K and a fe+ +ho go much higher.0t's all about our /ersonal confidence4 e7/erience and abilities.

To be honest this /art is also ama@ingl sim/le4 if ou are +illing to stic to it. 0t eluded me for a longtime4 but no+ 0 +onder ho+ 0 e%er missed it.

!hen 0 trade4 0 often choing? the trade. 0 al+as mo%e to ,# J1 as soon as 0feel it is /ossible +ithout choing out the trade. That is as sim/le as trade Management gets to me.

No one has a crstal ball to determine that e%en +ith all our efforts and rules the maret +ill definitelgo our +a. 0 ha%e entered man >/erfect? setu/ trades onl to ha%e *rice go m +a Q to 1 /i/s thenhesitate and /lunge against me hard4 lea%ing me +ith a loss +hen 0 had a /rofit.

or that reason often 0 +ill mo%e to loc in /rofits at the first sign of strong hesitation4 +hich oftenoccurs at either Q4 124 1 or 1Q /i/s. 0 am not sure the reason for those figures and ha%e no hard data to

/ro%e them4 but those are the areas 0 ha%e noticed in mytrading. ou ma notice other areas. eel freeto learn to >feel? this /art of the strateg on our o+n. 0t is about our /ersonal ris and confidenceafter all.

0f a trades runs strong4 0 sim/l trail the sto/ as /re%iousl described.

ou can mae this a lot more com/licated4 but it's not necessar. -emember the goal is to be


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consistent4 not hugel accurate. 0f ou consistentl loced in onl Q /i/s /er trade and made threetrades a da4 ou +ould still ha%e a million dollars in a bit o%er a ear.

D" N"T get greed here(( se this to mitigate ris and to ma7imi@e our trading C"N$0$T#NC4ma7imi@ing /rofits +ill come +ith e7/erience. 0t is more im/ortant to be consistent than to mae hugegains each time.

5a(e It /ours !

No+ comes the reall fun /art. Mae it ours( This4 all of this to this /oint4 +as to get ou to +hereou could be consistent and that is the "NL goal of this manual. A sim/le +a to >see? and tae thetrades +ith clear >signals? to achie%e consistenc.

"nce ou get here4 the fun reall begins. No+ ou can /la +ith anthing ou +ant to4 as long as ouee/ consistent +ith our trading. Ne%er ;uit /rinting mone. That's right4 /rinting mone. That's+hat trading is all about.

Learning a strateg to the /oint of it boring ou immensel. 0f ou are not bored4 ou ha%e not becomeconsistent et. "nce ou do4 the dollar amounts +on't bother ou. The number of /i/s +on't im/ressou. !hat +ill im/ress ou is the freedom that a good strong income brings.

0 remember the first time 0 /aid cash for m car4 m daughter's car4 m girlfriend's car4 her daughter'scar and m house. All of it in the same /art of the same ear. !hat an ama@ing sense of freedom(TFAT is the goal of trading4 not sho+ boating about the huge gains4 but the boring4 stead4 consistentgro+th of great +ealth.

"nce ou start to become consistent4 ou +ill begin to >see? and recogni@e good4 solid /rice setu/s

almost +ithout looing to find them. The goal of all trading is to be able to sit do+n at a screen andno+ in a fe+ moments +here in the >scheme? of /rice action ou are and if ou ha%e a trade no+4 orone beginning to setu/.

rom there4 ou can modif this or an other strateg ou +ant to to mae things e7citing4 if ou neede7citement in our trading4 8ust remember ee/ one %er large account

The Simple Dance Part Two.pdf

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