The Little Red Trading Book

Top-Down Trading
An airline pilot never leaves the runway without having a destination and flight pattern.

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Paul Dean You Learn Forex Spring 2009

THE LITTLE RED TRADING BOOK This eBook is about how to become a first class trader in Forex or any other financial market you choose. Its about the steps you can take in order to get to where you can trade on your own from the comfort of your own office, home, condo, penthouse, mountain or beach home. Unbelievable as it seems, I think the average person, of which I consider myself to be, can learn the basic concepts of successful trading in a matter of weeks. This is one of the reasons I have called this eBook, The Little Red Trading Book. I named it after a book of a similar title on writing and because of a concept written about in the first chapter of that book. That concept is a Top-Down Approach to writing. This book will take a Top-Down approach to learning to trade as well as trading itself. TopDown trading is trading with the conclusion in mind as author Brandon Royal summarizes with this quote, An airline pilot never leaves the runway without having a destination and flight pattern. What we will discuss in this eBook is how to start with a sophisticated method of trading and fill in the tools you may already know how to use, underneath. This is not a baby out with the bathwater book. If you have no knowledge then you will get direction and if you have some knowledge, even advanced knowledge you can gain from reading this book. Here is an illustration of Top-Down learning. I am sure many of you have seen commercials for a complete set of tools that you could use to build anything from a bookshelf to a house. If you buy all the tools, can you build a house? Probably not, especially if you have never built one.
Paul Dean, You Learn Forex

So what would you do? You could read some books. You can even go to school and learn about construction. You could become an architect. You could even decide to get a job on a construction crew and learn one nail at a time. All of those methods would be Bottom-Up in my view and how most people go about learning. Top-Down would be finding someone very good at building houses and sticking to them like glue while they built a house. You would keep notes, take still shots and put them in a notebook, or make movies of each step and the order of each step. You would also participate in as many of the on-site jobs as possible. After you had done this many times you could probably build a modest house, then a bigger one and so on. To me, this is the way to learn and the better the person you learn from and the more knowledge of how to build a good house, the better you will be. That is an example of Top-Down learning. Learning with a specific end in mind before you start. The same would be true of many professions or technical skills, including trading. I have no doubt that if you were looking over my shoulder day after day that before long you would be doing what I do and making lots of pips. Therefore my objective here is to get you started from the top, down. Most Forex trading or trading of any kind is from the bottom up. That would be learning about things like trend lines, moving averages, chart patterns and formations, candlesticks or price bars, Fibonacci, Elliott Wave, support and resistance, and on and on. Once you are done you have a tool box of items but you still dont know how to build a house or make a trade, or read a chart.

Paul Dean, You Learn Forex

I assume that many, if not most, have a basic understanding of the Forex market. It is not my intent to rehash those here. If you know absolutely nothing then it would be best to get a book and read it first or there are many websites that can give you the basics. If you would like my opinion you can email paul@youlearnforex.com and give me an idea of your trading knowledge and I can tell you what you might read, if necessary before you read this book. But let me reiterate, if you have some knowledge of trading and you walked into my office and said, Teach me how to trade. I would teach you from the Top, Down. A perfect example of this is golf which I played and taught for many years. Golfers have problems because they are so concerned with their grip on the club, their backswing, and their downswing that they dont think at all about the target until after the golf shot has been attempted. That is not what our pilot does and not what a good trader does. And lets be clear about something from the beginning. A good trader is someone at the end of the day, who makes money. There are 3 to 4 trillion dollars traded in the currency market every day. Statistics tell us that 95% of retail traders will fail when trading the Forex market. Statistics also show that there are about 1.5 billion Forex traders across the globe. That means there are about 75 million retail traders who are trading the markets and pocketing approximately 12 billion dollars a day. How do you get to a place where you are getting some of that money? Lets take a look at this illustration to get started.

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TOP-DOWN TRADING

Primary Trading Tool Guidelines Identifies Momentum in the Market Provides an Accurate Target Provides Accurate and Consistent Entry Point and Stop Loss. Allows for the Determination of Trade Worthiness Objective Judgments

Secondary Trading Tools Geometric and Patterns Trend lines Moving Averages Candlesticks Chart Patterns Support and Resistance Time Frames Behavioral Elliott Wave Theory Oscillators COT Fibonacci Analysis Price Action Gann Analysis

Dependent Trader Find Something or Someone to do the Trading.

Technical Trader Learn the Basics Tools of Technical Trading

Fundamental Trader Learn the Basics of Fundamental Trading

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The chart on the previous page is the structure of how one should learn to trade in my view. In general the most specific tools are put in use first by showing a trader all the elements of what makes a trader a good trader. For example, what if you won a day at the golf course with Tiger Woods and he was going to teach you how to properly swing a golf club. What if you spent the evening cleaning your clubs, in particular your driver. When you arrived the next morning what if Tiger greeted you and ask you to pull out your most important club. I wonder how many would pull out their putter. If you were asked what your favorite tool was for trading, what would you choose and why. I am suggesting that the list of things in the Red Box above need to be met first before moving on to any other trading tool. Next, working from Top-Down would be what I call Secondary Trading Tools. This is where most traders gravitate much as tool lovers do when they head to Lowes or Home Depot. These are without question the tools of the trader but how many of them will meet the criteria of the Primary Trading Tool Guidelines in the red box? The last boxes are where many people start and some never really get out of these first three boxes. However, by starting from the Top Down you may entirely eliminate even having to decide anything. These three boxes represent the choices made to people when they decide to learn about Forex. You see this illustrated in forums and webinars. People are trying to decide what is the best method for them to take. Lets take a minute to talk about each of the boxes at the bottom.
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Dependent Trader This person is looking at the option of having someone or something else do the trading for them. We would all love it if we could buy a computer program that traded for us and deposited thousands of dollars in our bank accounts over night. Unfortunately this is not the case and no matter how attractive this idea may sound it has not proven effective. If it had, all of trading would be automated and/or mechanical. Another aspect of this possibility is finding a person (expert trader) to do the trading for you. This is risky business. You should never have anyone trade your money who cannot present hard evidence of their success rate and, in my opinion, a clear explanation of how they approach the market. There are many people who will never recover from recent stock market losses because many money managers could not read the basics of the charts they were looking at. Many of the experts hide under the guise of selling you a trading program that is graphically appealing and seems to have the basis of a sound system. If you read About Paul on my website you will get a flavor for what this can be about and the money it might cost you. The Dependent Trader is looking for someone else to do the hard work. If this is the case, then this trader should also be ready to accept losses that perhaps they didnt count on, and frankly who does? Here is a list of other things that the Dependent Trader will come across eventually. 1. Selling trading platforms These are often offered in a free webinar setting where the charting package which can do everything including take you to the moon on weekends. It will
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have snappy features and handsome graphics none of which have anything to do with making money. 2. Proprietary Trading Methods This is an interesting method of hooking the Dependent Trader. This can come in the form of a carrot. In other words to get this trading method you would need to sign up for a $6000 training program from a top Forex training company. In return they have a proprietary trading method that you will gain access to. I have been there. 3. A Trading System in the Process of Development I bit on this too. Someone teaching their own method of trading that isnt quite completed yet, its in process. They are often selling a fancy indicator that you need to have in order to trade the system. Or they may be offering a membership to a monthly webinar. You also see this in forums. The problem here is that some people just never get the hang of the system being used and no one makes money. The Fundamental Trader There are many traders who fall under this category. After all, how can you not be concerned about the fundamentals; interest rates, unemployment, GDP, Existing Home sales, Retail Sales. The onslaught of economic indicators come day after day, hour after hour. You are told that the best way to trade is to focus on one or two currency pairs and get to know them well. Study all aspects of the economy before you make your decision to trade. Weigh everything in regard to which pair is going to have the upper hand. In every case that I have found of fundamental trading eventually the fundamental trader has to look at the charts and make technical
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decisions about when to enter. In a paraphrase of Andrew Cardwell, Technicals can tell you about the fundamentals but fundamentals cannot tell you about the technicals. I have traded entire weeks without knowing what the economic indicators were. Without looking at the stock market, oil prices, gold, CNBC or any business news. Fundamental trading can sometimes be the definition of paralysis by analysis. And even when you are sure about the direction of a trade, you can be wrong. What you will end up doing is spending hours online trying to build a consensus of opinion. Unfortunately you will most likely gravitate to the side of the argument you would like to come true. I will leave it at that. The Technical Trader I believe the best traders are technical traders. I believe the best technical traders understand two things better than all other traders that puts them in the winners circle time after time; market momentum and target. Why Market Momentum and Target? As I will list later when we talk about the Secondary Trading Tools, there are many ways to approach trading. You can for instance, draw a trend line on chart where is touches three points which is the conventional method of drawing trend lines that you will read in every book. But that definition although not wrong is misleading because all you are doing is imposing your trading method on price rather than letting price tell you what it is going to do. That is why people who say that price is all that matters are right. The problem, once you know that is, what is price telling you?
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If you are going to trade from the Top Down your method has to have the target in mind from the start. This is because the target is telling you what the value of that currency should be; the future value. If I am the pilot of a 757 leaving Los Angeles I know the future value of my target and it is four hours later in New York on a runway. Momentum is what takes me there. Momentum is also directional if the trader knows what to look for. That last sentence should be repeated over and over until it is never forgotten. If it is it will save you from many false entries. Lets assume we are a currency trader. What we are waiting for before we trade is momentum in the market with a highly accurate known target. That is not the concept of most traders. Instead they are thinking entry and how much they can afford to lose. They are often following one or two of their favorite pairs rather than seeing the market as a whole. Very traders have the target in mind first along with the evidence that there is the momentum to get to the target. A signal to buy or sell with no momentum is no signal. Its a jet on the runway with no fuel. If you dont know when and where momentum is coming, you will lose many trades to noise. When the target(s) are known and the engine is reviving the trade will have a much higher success rate. This is why Top-Down trading works and why traders should tip their idea of learning on its head.

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The RED BOX The First Step in the Top-Down Process

Primary Trading Tool Guidelines Identifies Momentum in the Market Provides an Accurate Target Provides Accurate and Consistent Entry Point and Stop Loss. Allows for the Determination of Trade Worthiness Objective Judgments

The items in this box outline what a highly profitable trading system must have. These are not so much tools but concepts that your trading tool or system must have to succeed. Identifies Momentum in the Market We have already discussed momentum to some extent. But my idea as far as I know has not been expressed by other traders. Obviously, even though I have read over 100 books, hundreds of articles, and spent endless hours on forums for more than four years almost 7 days a week, I could never exhaust all the ideas of traders. However no one I know of has put these thoughts down in any form that I have seen. I dont claim them as mine, but I do believe without them it will be extremely difficult to succeed. An extensive treatment on Momentum and Target will be part of my third book on RSI Advanced Trading Techniques.
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My theory is based on my use of RSI signals on trading charts and the commonality of those signals across a wide array of currency pairs at the same time on a particular time frame. In other words, if I am looking at 12 different pairs on the hourly charts nearly all of them are showing an initial readiness at a particular hour and then a confirmation signal in the next. I interpret this as momentum that is affecting all of the currency pairs. It is like an airport when all is relatively quiet and subdued. People are reading magazines and sleeping. Then you begin to hear the PA as flights are preparing to arrive. People get somewhat restless, some begin heading for gates. Then the planes arrive and people get off and head toward baggage while others are getting on the same planes that arrived. The planes arriving were the signal that something was about to happen. The planes lining up on different runways and taking off are the confirmation. The momentum is the fuel and the take-off. Or consider a herd of elephants or antelope threatened by a predator. They are at first agitated, then anxious and when threatened enough they will run away or in the case of elephants stampede. As a trader I am looking for that momentum in Forex across currency pairs because it gives me a sign that my signals are correct and the direction that I am trading is correct. I have traded as many as 12 pairs of currencies at once with stop losses of only 30 to 40 pips in which none of the trades were stopped out. That could be called Directional Momentum. It also reduces the chance that I will be stopped out by noise. When a plane takes off it goes in one direction. When elephants stampede they go one direction and nothing gets in their way.
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Provides an Accurate Target Why is target so important? Without a target you have no reason to trade, no prediction or estimate of the future value of a currency pair or other financial instrument. There is no destination. To trade successfully traders need to know where price is going if the trade is to produce the full potential of the trade. And it must be based on objective measurement that has proven to be true. If this not the case then the trade is not only a weak speculative trade, it is a subjective trade. For example, many traders have a goal of making 20 pips. If the trader reaches twenty pips then they are out except sometimes when they decide to stay in because they have a good feeling, or perhaps because the trade shot up to 40 before they could do anything about it. That of course is a good thing but if they dont take their profit, which they may not, thinking the trade will continue to move in their direction, they may find that the profit they made was impulse buying at the last minute and then a sudden drop occurs. How much will they let it drop? What if it drops to below 20? Hopefully they will get out but some traders will hold on thinking it will go back up. Then the next bar forms and price goes lower. If you have traded long enough you know what I am talking about. Youve been there. Top-Down trading means there is a specific and objective target well established by acceptable trading theory. It is one quarter of the equation however, as a target without a specific entry point that relates to the target and a specific stop which relates to the risk is just as bad as no target. The fourth part of the equation is the Reward to Risk Ratio and the question, Is this trade a trade I should take?
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Provides Accurate and Consistent Entry Point and Stop Loss We discussed this above but any Top-Down method of trading needs to be able to know where the entry point will be in reference to both the target and the stop loss. The entry point is more than just a place that the trade starts, it is a reference point for Risk and Reward. Once you have an entry you can decide the Risk and here is where many wannabe traders get into trouble and its really not their fault. Most trading systems leave it up to the trader to decide on Risk. In other words, how much can you afford to lose? That is arbitrary and subjective. But a stop or Risk should be based on where the trade has gone wrong. The trader should know in advance based on their trading system, where a trade has gone wrong. If your trading system cannot tell you where the trade is gone wrong then you do not have a trading system. You are gambling. Lets illustrate this now taking Momentum, Entry, Stop and Target together. We find an entry point when the market is ready to move. This would be a signal to buy or sell with momentum. We have take-off with engines running. We also have determined out pre-flight plan, we have a target. And our stop is the end of the runway. Hopefully that will not be a problem! Our signal to get in the market is to BUY. Our Entry is: 1.3000 Our Stop is: 1.2960 pips and based on where the trade has gone wrong. Our Target in this case is: 1.3120
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Are we ready for clearance from the traffic controller in the tower? No!!! Allows for the Determination of Trade Worthiness What is Trade Worthiness? Trade worthiness is your Reward to Risk Ratio and asks the question, under the circumstances do we take this trade? Is the tower going to give the pilot an all clear? We can decide that quickly. Risk = Entry Stop Loss Risk = 1.3000 1.2960 Risk = 40 pips

Reward = Target Entry Reward = 1.4200 1.3000 Reward = 120

Reward to Risk Ratio = Reward/Risk RRR = 120/40 RRR = 3:1 The last question is what RRR do we find acceptable in our trading system? In my opinion 3 to 1 is a minimum. For example, $1.00 traded has the potential to return $3.00.
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In this case the trade is ALL CLEAR! 1. We have momentum across the majority of pairs. 2. We know the target. 3. We place the trade. If the trade nears the target and momentum suddenly slows down (clouds or bad weather), we take all or a percentage of the profit. If we take a percentage we would move our stop. We could also be moving our stop as the price approached our target. Objective Judgments What does this mean when we talk about trading? When you look at every tool in the yellow box of Secondary Tools, many of them with the exception of Oscillators are subjective in nature. This is what is meant by that. A trend line is subjective if the trader is drawing the line on the chart because 10 traders looking at the same chart could draw trend lines from different points. Even the Elliott Wave which has many followers and takes many years to master is subjective. Traders rarely agree as to the wave patterns. An oscillator used properly can make trend line placement on price an objective exercise as the indicator dictates where the trend line must go. And these trend lines are from only two points, not three. The reason that I put Objective Judgments last was because any trading method to have consistency must have objective cornerstones in which to establish themselves; it is foundational. Does the highly respected Fibonacci Analysis do this? Yes and no. One of the best books on Fibonacci Analysis is by Constance Brown. One of
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her main points is that Fibonacci ratios are often improperly drawn. They must be drawn so that the lines of the ratios find the areas of previous support and resistance that have been respected by the market. If you are trading using Fibonacci then you have to ask yourself if 1.5 billion traders in the world are trading the EURUSD where are most of them placing Fibonacci ratios? Do you think there might be some differing opinions? And then add to that where the majority of traders are drawing them in terms of time frame and it is not hard to see that this is not the most objective method of trading. Brown has a very unique method of using Fibonacci ratios to locate confluence which can be very helpful but again as much as she tries to define objectivity in the placement, when you have millions of people using Fibonacci ratios, the placements are going to be different and they all havent read her book so they will not be doing it all the same. And if everyone did do it the same then there would be no market because everyone would be on the same side of the market! Enough about objective judgments except to say the trading method or tool that is used in Top-Down Trading must have a high level of objectivity to it. The oscillator that I depend on is the Relative Strength Index which is a momentum oscillator and it is a leading indicator. It answers all of the above criteria. We will talk about it more a little later on. Following is a brief summary and discussion of Secondary Trading Tools.

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SECONDARY TRADING TOOLS

Secondary Trading Tools Geometric and Patterns Trend lines Moving Averages Candlesticks Chart Patterns Support and Resistance Time Frames Behavioral Elliott Wave Theory Oscillators COT Fibonacci Analysis Price Action Gann Analysis

Trend Lines 1. Trend lines fall under the umbrella of the Geometric method of trading. 2. Basic trend line placement is 3 points that touch a line. Although this is the standard subjective idea, I propose that 2 points objectively placed is more accurate. 3. Price is not determined by the trend line. A trend line is only a method to frame what it thinks price is doing. It is just a visual tool of what the trader thinks the market is doing. 4. It indicates the direction of the trend. 5. It can also be used to indicate patterns that are recognizable and repetitive, something that will be discussed later. 6. Sometimes the most obvious place to draw a trend line is not the best place to draw it, nor is it the correct place. 7. A trend line with no objective purpose cannot tell you the truth about price. No matter how well you think you have detailed your chart with trend lines and other methods if they are subjective based on your instincts they will be wrong more than they are right. The only way to know you are going to be right more than
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you are going to be wrong is to change from a subjective method of trading to an objective method of trading. 8. When you draw a trend line can you find any reason other than your own subjectivity as to why the trend line you have drawn should be there? Moving Averages 1. Moving averages are calculated over time. 2. The reason moving averages are used is to determine trend. 3. Moving averages are less static then trend lines as they adapt to price as it moves. 4. Moving averages are lagging indicators. 5. Using moving averages to enter the market makes stops less accurate as well as targets. 6. As a standalone trading method, moving averages do not give us all the information we would like to have. They have value for helping to determine trend but that information may not be current enough for us to trade it successfully. Chart Patterns 1. Pattern recognition. May traders use the many trading patterns that occur on charts, defined by trend lines, to trade. This is less subjective then many methods and falls under the method of Pattern Recognition. 2. Traders speculate that prices will for example, break out in the direction of the previous trend. 3. An interesting view point on Chart Patterns is the following quote:

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It is most valuable to recognize when a pattern has failed and the majority of people have been caught off guard. And that failure happens when the market suddenly destroys the pattern that it tricked the majority of the people into believing was being formed. Here are some of the questions you might ask after reading the quote and assuming it was true or made sense. How do you know when the pattern failed? Wouldnt that only be evident when it failed and wouldnt everyone know by then? How would you know what failure was? Wouldnt it be based on what you thought was success? And if success is when failure happens, when the market suddenly destroys the pattern then when would you know which was which? Fibonacci Analysis 1. This falls into the Geometric Pattern of trading categories. Constance Brown, who has written extensively on Fibonacci, points out that many people place their start and end points for Fibonacci Ratios incorrectly. If nothing else Fibs can fib. In other words everyone using Fibs do not draw them from the same place nor on the same time frame. 2. Fibonacci analysis attempts to establish points of retracement. Although this can seem objective in nature it is relative and therefore subjective in many cases. It can be like drawing a line in the sand and saying dont cross this line. Some people will and some wont. If no one crosses than you can say the line was reliable.
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3. Fibonacci can be used to predict targets. Fibonacci extensions to find a target have merit. 4. Stops for Fibonacci trading can be somewhat subjective. 5. Constance Brown in her book, Fibonacci Analysis discusses finding points of confluence using multiple Fibonacci ratios. This is a very interesting technique and well worth reading however it is somewhat of a skill that takes time to develop and even after development, may not produce consistent results because the placing of Fib points top and bottom is so varied trader to trader. Price Action 1. Price Bar or bars that indicate price direction may be changing the direction of the trend. This is a method that Martin Pring developed when he discussed his Pinocchio bar. This is a bar that has a long nose and opens and closes within the previous bar. The nose of the bar is lying to you that price is going to continue in the direction of the nose but then changes its mind and goes the other direction. 2. Targets are not easily predicted primarily because Price Action does not have a sense of momentum. 3. There are other Price Action bars: Double Bottoms with Higher Closes, Double Tops with Lower Closes, Engulfing Bars and Inside Bars. Many of these have been studied at forum websites as James16. 4. Price Action bars should be used in conjunction (confluence) with other methods to help eliminate false signals.

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Elliott Wave Theory 1. This is a total trading concept and falls under the Behavioral methods. 2. The Elliott Wave takes much study and experience to learn. It is also open to many interpretations. 3. It is best used with another method that allows for precise entries, stops and targets. Confluence This is not so much a tool as a method of finding places where multiple trading methods merge at one point. For example, a Fibonacci level with a wave that coincides with Elliott Wave Theory. The Definition of Confluence 1: a coming or flowing together, meeting, or gathering at one point <a happy confluence of weather and scenery>2 a: the flowing together of two or more streams b: the place of meeting of two streams c: the combined stream formed by conjunction.

Non-Correlation This concept is presented by Constance Brown. She presents several categories in which trading tools fall. We have discussed several of them; Pattern Recognition, Geometric and Behavioral. The idea is that before placing a trade the trader should have an agreement using a trading method from each category.
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An example might be: Chart Patterns (Pattern Recognition), Fibonacci Analysis (Geometric), and Elliott Wave Theory (Behavioral). If two or three of those methods agree then you have a better chance of succeeding. I think this is a powerful tool to embrace. The question is which of the methods we have discussed is best and in what combination?

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THE ANSWER What follows is an answer to Top-Down Trading. It answers the question of Identifying Momentum which none of the Secondary Tools listed can do. Remember without momentum we have no take-off. Also momentum combined with set ups across a set of currency pairs can be a very positive factor in the determination of direction. Next is Target. The Target must be in place before you enter or take off. Third, Entries and Stops that dont just tell you what you are willing to risk, but where the trade has gone wrong. Fourth, you must decide Trade Worthiness by calculating the Reward to Risk Ratio and last, is your method of trading objective or subjective? There is only one tool I know that is objective in regard to momentum, target, entry, stop, RRR and that is The Relative Strength Index (RSI). RSI makes all the methods that are in the Secondary Tool Box into useable and reliable tools no matter which ones you use. It is also a standalone trading tool. It is called an oscillator as it measures momentum in the market. If there is no momentum there is no market to carry trades through to fruition. The use of this indicator across all of the currency pairs you are trading is the first signal that momentum has entered and/or slowed. It is a measurement of the collective behavior of the market, the psychology if you will. Welles Wilder developed RSI to determine overbought and oversold conditions. RSI does a poor job of determining overbought and oversold but many traders still refer to it for that purpose which is totally wrong and makes some traders think it is not valid. It also is used to locate and trade divergences. This method of trading has also been found to be incorrect.
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Andrew Cardwell discovered that divergences create the opposite of what many traders believe. So what is RSI good for? Cardwell also discovered Reversals. These Reversals are the key to trading RSI and in my opinion the key to successful trading. Reversals are not subjective, they are found on charts and can be traded from an objective point of view. Collectively I have found how currency pairs use this method to create and indicate momentum. The method has a Top-Down Target before the trade begins as well as an entry, stop and RRR calculation to determine if the trade should be taken. Once the trader learns this technique he or she can read a chart in a matter of minutes and know what is happening. Also because it is a leading indicator the trader can determine when the trade is about to leave the station and there is a simple method to confirm the trade. It allows the trader to get the total overview of the market rather than spend hours trying to figure out waves as in the Elliott Wave theory. Having said that, the Elliott Wave Theorist can use RSI techniques to pin-point their trades and significantly improve there profits. And this is true of all of the Secondary Trading Tools that we have discussed. They can be used to establish confluence and noncorrelation with RSI to increase the probability of success and confirmation of a trade signal.

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Conclusion Trading currencies or trading any financial instrument is one of the most difficult things someone can take up. The trade off is how rewarding it can be. The problem is how to get from 1 on the scale, where you know little, to 10. Most people will think that you must go from 1 to 2 then to 3 and 4 and so on to 10. I have attempted to show here that through my experience, that is the wrong approach. I believe the Top-Down approach is the correct method. As I said earlier, if you came into my office I would not start at point 1, I would start at 10. After all if you learn 10 you may not need 3, 4, 8 or 9. The next step is yours. I hope that you take the opportunity to learn some of the items I have discussed above and see the products listed on the products page of the You Learn Forex website. There is a video that simply teaches you what you need to know to get started trading RSI Advanced Techniques in 64 minutes. In 64 minutes you will have what you need to become profitable. I know because I have RSI Advanced Traders who have paid for the video, eBook or both in on trade. The video is short so that you do not need to take days and hours going through videos. The concepts are clearly presented and you can easily repeat them. The book does the same thing only it takes a little longer to read through. However there are things in the eBook that were easier to illustrate then the video. I would recommend either for learning RSI Fundamentals: Beginning to Advanced, or both. Either however, on their own will give you all the information you need.
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I refer to RSI as Advanced not because it is difficult but because almost no one knows about this method of trading. It took me nearly 4 years of studying trading day after day before I came across it. Fortunately I was alert enough to see that it made more sense than anything I had used in the past. You can actually use it as a standalone trading system and it will teach you more about trading currencies than any book I have read. I have enjoyed bringing you this material and trust that it will help you on your journey. Please feel free to email me: paul@youlearnforex.com We also have Free weekly webinars that are free where we discuss many of the topics above and a Daily Briefing that comes with a free month when you purchase the video or the eBook. Thanks again and much success, Paul Dean, President, You Learn Forex About Paul More about RSI Testimonials can be found with each product on the Products page. Other references can be provided on request.

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Paul Dean, You Learn Forex