1. Introduction: Good evening all. I am a 28 year old trader and I have been trading for living since 2006.

My main concentration is Spot Forex and specifically clearing of large positions for clients, but also trade to some extent commodities and stocks. I am a founding partner of a money management and trade advisory firm, and we have 36 employees. I am not going to mention names or places as they are irrelevant to the subject. As a trader I have nothing more to prove as on the eve of the financial crises, we took a bet against the current trend (bullish) with 90% of our capital, and the rest is history. The strategy I want to talk about is nothing secret, however it is very uncommon, and the reason for its success is its simplicity. There are 3 indicators that I use, but I have added one more to the downloadable zip file in order to make it easier to get started. The currency pair that I mainly (90%) trade is the euro dollar pair. This is simply because it is the most volatile and predictable pair. Euro-Dollar is the most traded pair, and since the opening of the Forex market to retail investors, its daily volume has increased dramatically. Euro-Dollar is also a common pair used by financial firms to hedge their clients revenues against market swings. The main problem I see every day when reading through forums, is the sheer number of different strategies. It seems that traders think that more complex the system, better the profits. Then, when they fail, they blame the system they were using, when in reality, the problem is behind the screen. No system will adapt itself to ever changing market conditions; it is up to the trader to adapt his/hers approach. I know that some will argue that this wont work in this or that market conditions, but they forget that the market itself is binary; the price can only go up or down. Such thing as ranging market doesnt exist; it is a definition of a common excuse used by losers. Also every trading system is at its core the same, the system and its indicators job is to detect the best entry and exit point for the trader. As an example: A seasoned trader will detect fast by naked eye the support and resistance levels on a chart. A rookie will not. The rookie will implement a strategy using stochastic, MACD and RSI, but what he doesnt realize is that these indicators give him the same entry points as the seasoned trader uses. For binary options, the knowledge of finding the best entry point accompanied with excellent prediction on the next price move is primordial. As with binary options every 10th of a pip count. I hope that my article will give rookies advice on how to turn to profitability and for seasoned traders some extra to implement in their own trading strategies. Disclaimer: The following articles represent my sole opinions and represent a strategy that I personally use. Please read through everything carefully, and do not jump to using the high-risk strategy before understanding fully how the evolution of this strategy works. Also, if you do encounter losses, it is because you are doing something wrong, so please demo trade before going live. This strategy is the Holy Grail for me because I do not get too greedy and if I do not feel the trade I simply pass, and wait for the next one.

The first fundamental is to understand what is forex and what is its main usage: Exchange of currencies that is ruled by the laws of supply and demand. Everybody knows the above, but can you define its meaning and how it works? Simple Hypothetical Example: Apple sells 1 million Iphones in Europe in September for 500 euros a piece with Euro as base currency, they deal through HSBC, meaning their invoicing receiving account is under HSBC. But Apple reports in dollars, and the governing account is with BOA. So Apple made 500 million euros that now sit in their HSBC account in Luxembourg. That money has to be now transferred to their BOA account and changed to USD. Now it gets interesting. The transfer order comes in on Tuesday at 4 pm GMT. It wont be transferred right away. The bank accumulates all the dollar orders during the night. The orders can be from yesterday or a month ago. The bank sends operation orders to their partners (like us) and the commission structure, and order deadline. Euro-Dollar is trading on Wednesday at 6 GMT at 1.27000. Apples account at BOA will receive 635 million USD at 8 am EST. The order is fixed at 1.27000. So how do us, and both banks get the maximum profit from that order? BOA get their commission from Apple, but what about HSBC? At 8 am GMT, London open, the liquidity is 380 million euros, and price is 1.27010. So 500 million euros is equivalent of 635 050 000 USD. Not good enough yet, and not doable as there isnt enough money yet in the market. Euro outlook is bullish, Asian markets rose during the night, and US fiscal cliff is getting resolved. Awesome, millions of retail investors and outlets take BUY orders and place their stops 10 pips under the current price. The market pending liquidity is 300 million euros and current liquidity is 380 million euros. SO, the total equivalent liquidity in USD on the market at the moment is (1.27010) 482 638 000 USD and 381 030 000 USD pending (equivalent of stops). The data tells us that the stops are at 1.26910, so at 8.15 am GMT, the order comes to SELL 2,8 times the available liquidity (840 Million Euro sell order) this pushes the price to 1.26905, where OUR (Banks + us) BUY orders are triggered and retail investors make new buy orders to cover their losses. The price flies to 1.27099, and this is when we start to exit our BUY positions gradually, and because the trend still seems strong, people buy our orders. On your chart this is shown by the green candles getting smaller in size after a good run upwards. So the market liquidity jumped to 380 + 300 = 680 million euros, and we exit at 1.27099 for a profit of 9.9 pips (from 1.27000). Not a lot you say, but we were provided with a leverage of 10 from Barclays on our position for a commission of 0.1 pip. So our 500 Million euros had a leveraged market value of 5 billion euros, or 5 billion / 100 000 = 500 000 lots X 10 USD = Pip value 5 million USD X 9.9 pips = 49.5 Million USD, or 36.1 million euros. This is then shared between HSBC, us and Barclays. The numbers above are just an example, the truth is that the volumes are huge (4 trillion USD daily) and a lot of players, but that example is to show you how FX works, and this is necessary when analyzing SR levels and trends.

SR levels are defined by the Big players (Smart Money) and they also hold really well because retail investors use them as well. The smart money cycle happens in 3 price cycles, and then we see a short-term channel where the price is stuck for a bit accumulating strength (GBPUSD last week during US session). These price cycles do not happen randomly, they have a sequence, and in fact every candle or price move has an inside cycle and sequence. This sequence is defined by a set of numbers called Fibonacci numbers. Fibonacci numbers were not developed for trading, and they happen everywhere around us. Even our subconscious uses the sequence inside our body. So it is only natural that each price cycle can defined in terms of Fibonacci numbers. The big players dont use indicators like RSI, CCI or MACD, their algos are based on the Fibonacci numbers. And combining Fibonacci algos with extremely precise price channel calculator and information on how others trade, you got the formula to rule over all other systems and strategies. Now, why would you as a binary options trader care less? Because unlike with spot FX, you need to be right every time, basically you have to have the ability to predict is the next candle going to be red or green. I kind of gave it away just above. So during day trading that doesnt involve Smart Money orders, I want to bag easy pips, so I need to use something that defines for me the price cycle moves and reversals. For binaries and spot fx day trading we got 3 indicators with very precise functions. Now, as you know what type of game you dealing with, you need to find it. Lets get started on the next step. 2. Indicators and their meaning: There are 3 main indicators used and 1 complimentary but useful: Value Charts: This is a detrended price indicator which tries to show the overbought and oversold conditions with detrended extremity levels. This indicators settings are default. Value chart basically just calculates the percentage move of the price from the current accumulative median. It has been around under different names since 1970s. Fibonacci retracements and projections: This is a tool part of every charting software. However, in order to use it with this strategy it has to be customized: Using the Fibonacci drawing tool on Metatrader 4, we can set the parameters to provide retracement and projection levels at the same time, with just one line. On your toolbar, click Insert, Fibonacci, and select Retracement. Or click the Fib tool icon . Draw a Fibo line anywhere on your chart and double left click on the line to make the Grab Points appear. Right click on the line then click Properties. Click the Fibo Levels tab

Enter the additional Values from the table below. To make changes to existing levels and descriptions double click the number.

To add new levels click the Add button.

MT4 comes with some existing Fibonacci levels (not highlighted), just add the %$ to these where suggested, this will add the level specific price after the fibo value. Level 0 0.118 0.236 0.382 0.5 Description 0 88.6 %$ 78.6 %$ 61.8 %$ 50.0 %$

0.618 1.00 1.27 1.618

38.2 %$ 100 %$ 127 %$ 161 %$

Center Of Gravity (Regression Channel): There are many versions out there but none of them can beat the original. The channel is defined by its median (Fibonacci number 100) and 4 extremities (Fibonacci numbers 127 and 161.8 at the top, and -127 and -161.1 at the bottom). Most versions of COG use just 161.8 as outer channels and 0 as median which leaves too much room for price movement. The indicator name is Regression.mq4 and parameters are default. Fib pivots: Just a useful extra indicator to show the weekly Fibonacci defined SR levels (plot on your chart and watch how the price reacts near one of these levels). Indicators can be downloaded here: Now, your chart should look like this (note that the fibo_piv lines had time to readjust to this week and should not be considered in these examples):

This is simple: Arrows and redline represent zigzag with default settings to give us longer price cycles. Channel Blue Zone: Last chance to exit your position, and get ready for potential reversal. Channel Red Zone: Reversal Zone, watch for stop hunting.

Bottom indicator window: Value Charts with levels 6 and 8.

Now you got the tools to find your prey. Next up stalking and striking it.

3. Conservative Long-term Strategy

This strategy is for those who are new to this game and want to build up their capital slow and steady. The point of this strategy is to minimize risk and wait for the perfect setup on the chart. In this case the perfect setup is using the ZigZags last 2 points, and draw a Fibonacci between them in the direction of the trend.

Draw your fibo from point 1 to point 2 for a down trend, and vice versa for an uptrend. Your target is 161.8 projection level. In order for the signal to be fully valid, there has to be a retracement to between 50 - 88.6. Higher the retracement goes, stronger the signal. In the example above, the retracement happens next to the number 2 in the up left corner. They key here is to be patient until all 3 factors line up. The entry rule is: Price hits Fibonacci projection level 161.8. Price is inside or outside of the bounds of the red channel. Value Chart hits level 8 or above

Your Expiry can be between 5 and 20 minutes. And your target is 1-2 trades per day.

And money management suggestion for this strategy is to take 2 equal bids per day for 20 days. Increase your position by 50% next day. If you lose, start with the last set of bids: Day 1: 10 + 10 Day 2: 15 + 15 Day 3: 21 + 21 and so on. You should reach around 5k in profits within 20 days, and next month just start over or carry on from where you left.

4. Semi-Conservative Strategy
The semi conservative strategy involves 4-6 trades per day. The rules are the same as for the conservative strategy, only with one exception: We take the trade at Fibonacci projection level 127 as well as 161.8.

Now, for level 127 trades, I would advise not to take the trade with more than 6 minutes to the expiry. This is because usually level 127 represents a consolidation level to draw buyers/sellers into the trend to get more liquidity and the price usually carries on in the direction of the trend within the next 3 candles. The rules for entry are the same as with the conservative strategy: Value Chart hits level 8 Price is inside the red zone Price hits the Fibonacci 127 projection level

Use the same money management as with conservative strategy, but your earnings will increase faster. And remember, You have to stick with the entry rules.

Now, the next article is a very aggressive strategy that defines the means of sane trading. This strategy represents the use of price cycles and Fibonacci sequence in fast trading. Trades are not only taken at levels 127 and 161.8, but also at breakouts. And Fibonacci levels are drawn for every cycle. This strategy also exploit the full potential of value charts. Above you learnt what you are hunting, where to find your prey, and how to bag some prey steady and safe. Now, we will go after the BIG 5.

5. Aggressive Strategy
Look at the chart below, how many price cycles do you see?

Yes, 9 cycles. Now, change your zigzag indicator parameters to 2,1,1. How many short-term price cycles do you see now?

Yup, 41+ short-term price cycles. In reality there are many many more, but lets not make it too difficult. Each of these cycles is a Fibonacci sequence with a high-low-retracement-projection-reverse. Look at the chart below:

Now it gets complicated and wonderful: 1. The Fibonacci is drawn between points 1 and 2 (in light blue)and marked on value charts the last high and low, 1 and 2 respectively. Now we have the levels and wait for the retracement which can be a wick, or a full candle. Above the retracement area is the white box marked by 3, and the green candle underneath touches that box.

2. The setup is ready when the retracement candle is followed by a red candle in the direction of the trend. Now wake up. 3. The next red candle closes below the open of the green retracement candle, BUT it doesnt touch value chart level 6 yet, nor the regression channels inner band. This is marked by the light blue rectangle. So this is our first breakout candle of this specific sequence. We enter PUT 10 seconds before the close of this candle, as the next candle WILL BE BEARISH, with 90% probability. This is marked by 3 PUT on the chart above. 4. The next candle closes below our 100 Fibonacci level but DOES NOT TOUCH LEVEL 127, which means it closed below the low of our current sequence. We enter PUT 10 seconds before the close of this candle because it will be followed by a bearish candle, or 2-3 bearish candles which will reach level Fibonacci level 161.8. This trade is represented on the chart by 1 PUT. 5. The last bearish candle hits Fibonacci level 161.8 and value chart level -8 and also the outline of the red zone, so we place a CALL. Within each price cycle between 3 points there are on average 3 ITM trade setups during normal volatility trading conditions. And for this strategy it goes without saying that if you dont feel the trade or something about the setup doesnt seem right, dont take it and wait for the next one. This strategy will produce around 100 setups per currency pair per day, so use it wisely, and be very sure to learn it by heart before you jump in full steam.

The 3 strategies explained here work for all currency pairs, commodities, stocks and indices. However, even with the conservative strategy, a trader can produce excellent results if they trade 5-6 assets, and take 2 high probability trades per asset per day.

6. Spot Forex
Now, you have learnt everything you need to know to be a great hunter, it is time for the grand finale. SPOT FOREX, that untamable beast that sucks poor traders accounts dry, and succumbs them to despair, agony and depression. Their strategies were perfect, they money management top notch, their indicators state of the art, they had digested all the possible info in the world, but still the beast got them and yet another trader bites the dust. But like all beasts, it has a weakness. European brown bear is Scandinavias greatest hunt, an elusive king of the dark Nordic forests that doesnt fear dogs not men. It can lose dogs trailing it, surprise hunters with sudden moves and appearances without ever giving a direct line of fire. Most hunters I talk to tell me that the only way to get a trophy brown bear is to become part of the forest, part of the surrounding nature, silent and unnoticeable, make yourself so humble that you become the moss on the ground, bark on the pine, a falling leaf in the cold autumn morning. Wait for your moment, you know the king of the forest walks this same path every morning, it is its territory, it has nothing to fear, nothing to suspect. Then it appears, spot on the exact time it does every morning. It stops to sniff that same tree, 30 yards and its chest and heart turned at you. Raise

your bow, and fire. The bear get hit but it doesnt even notice, it doesnt understand what happened. Few graceful steps and its heart stops beating. The trophy is yours. Dont go yelling around town and showing off your trophy, you will be noticed, hated and dispraised. Others will start to consider you a threat to their hobby, a threat to their existence. The forest will abandon you, you betrayed it, and you raise yourself above everyone and everything when you should have stayed humble. Now, everyone and everything know you, how you hunt and where you hunt. Now they are all after you. Remember what I wrote on the second page? How does the market work? Everyone wants to make a million bucks. But yet very very few succeed, but those who do have something in common: You cant read about their exploits online. They dont use indicators; they dont use any 1000 buck per month super hyper arbitrage secret. They simply use 3 simple rules: Be invisible: Dont use stops, dont post your earnings on forums, and dont offer social trading. Be patient: Wait for the exact moment before you strike and even then stay in disguise. Dont get greedy: Stay humble and respect the market.

To be extremely profitable, dont trade against the smart money, trade with them. Wait till they start their rattle right after London open, watch them take out the poor bastards, disguise your positions among theirs and start exiting when they start. If this strategy should have a name, call it the Breakout. This is nothing secret, it just is not very used since people dont believe that the simplest thing can be the most effective. Now lets setup the charts. Chart 1: Draw a rectangle between 5 and 7 GMT. The upper side of the rectangle has to be at the level of the above mentioned period high, and vice versa for the down side. Your Friday 9th November EuroDollar chart will look like this (Note: My chart is GMT+2):

Now, draw 2 other horizontal lines 5 pips above and below your existing lines. Then calculate 15 pips above and below those new horizontal lines, and redraw 2 more horizontal lines. Now, draw a rectangle between those 2 previously drawn horizontal lines, and remove the lines to make your chart look nice. Your chart will now look like this:

Use only manual entry and preset Take Profit, and when you get the touch you may use pending orders. The risk : reward ratio of this is 1:3, which is much higher than most super hyper systems will ever give you, and also this is the only way of trading that has over 90% success rate for me since 2007.

When I trade on my personal account, I use Tradersway and Dukascopy. They are both ECN brokers with very low spreads, and high enough leverage available to make trading interesting. Tradersway is currently offering a ECN account opening for 10 USD only, and even the regular lowest deposit is 100 dollars or euros or pounds. The key to very profitable trading and especially learning is to begin with a small bank, and use maximum leverage and lot size. This normally isnt advisable but in this case you need to learn from your mistakes aswell, and you need to learn what it feels like to get hit hard. Then only you will learn to detect the traps on the chart. Some will argue that making a million dollars is impossible, but the sad fact is that with a starting balance of 100 dollars, you will need only 900 pips to turn that 100 buck to 1 million. So break it down to 900 / 15 = 60 trading days. It is totally doable. The only problem will be the trader themselves and their mind starting to play tricks on them. There probably exists an MT4 indicator for the method I described above, but I still prefer to draw everything by hand every morning. The next and last is using value charts + regression channel + fibos for day trading spot forex: What we look for here is the same as the conservative binary options strategy:

But here we use the Fibonacci levels as guidance on price movement. The basic idea is to capture 15 pips from each price cycle from channel high to channel low. Of course this doesnt always happen so we use the Fibonacci levels as targets. Also, the regression channel indicator repaints, so we use the Fibonacci levels to avoid keeping our position for too long.

The order of setting up your chart for day trading is to draw the first Fibonacci on a daily chart for last month, between the high and low. Then move to 1 hour chart and draw your Fibonacci for last week. Under the parameters change the color of the lines to be able to identify them easily. The price will respect those levels as these levels are also used by the big players (Smart Money). Now, you have pocketed your daily 15 pips from the London open. Now watch the chart closely and draw your cycle Fibos as the cycles happen. Very often the cycle will run between 2 weekly or monthly Fibonacci levels. The regression channel will show you the extremities of the cycles, and use it to identify the entry zone for your trade. Then move to value chart, if the price hits level 8 when it is inside the red channel, and is very close/ touches a weekly or monthly Fibonacci level, the cycle reversal is imminent. Now use your cycle Fibonacci level 161.8 to confirm the price at which reversal will happen. When the price hits this level and all indicators line up, place a pending order 2-5 pips in the direction of the reversal and Take Profit 1015 pips depending on the length of the last cycle and your appetite for risk. When the price closes on the median line and value chart goes above/below level 6, if you have 10+ pips, then exit the trade. Dont push your luck. There are days when the Smart Money just piles up orders, especially during earnings season. This is a golden opportunity for you, as the price cycles can reach 50 pips in a short period of time. If you wanna play it safe, wait until the smart money run is over (watch those weekly and monthly Fibonacci levels), and then start your day trading exercise. This will prevent and protect you from 80% of the sudden market moves that the big boys make happen. Also, it goes without saying that be well aware of news releases and politics, as a sudden political event can trigger huge orders from clients and makes the smart money enter the market to profit from retail traders. The 2 main points for this are: Dont use stops, monitor your position at all times and assign hotkeys for entering and exiting your position. Use at least 1:3 Risk-Reward, otherwise you will get eaten up alive. And dont be afraid to think big.

As a great trader from Binaryoptionsdaily.com has said many times: A good binary options trader will make a great forex trader.

Happy trading everyone, and dont forget that it is not about who, what, where or when, but how much!