Forex Trend Directive - s3. · PDF fileThe Forex Trend Directive system relies on using...

FOREX GEMINI CODE

Presents

Forex Trend

Directive

Forex Gemini Code © Published by Alaziac Trading CC Suite 509, Private Bag X503 Northway, 4065, KZN, ZA

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2

RISK DISCLOSURE STATEMENT / DISCLAIMER AGREEMENT

Trading any financial market involves risk. This report and all and any of its contents are neither a solicitation nor an offer to Buy/Sell any financial market.

The contents of this material are for general information and educational purposes only (contents shall also mean the website http://www.forexgeminicode.com/ or any website the content is hosted on, and any email correspondence or newsletters or postings related to such website). Every effort has been made to accurately represent this product and its potential. There is no guarantee that you will earn any money using the techniques, ideas and software in these materials. Examples in these materials are not to be interpreted as a promise or guarantee of earnings. Earning potential is entirely dependent on the person using our product, ideas and techniques. We do not purport this to be a “get rich scheme.”

Although every attempt has been made to assure accuracy, we do not give any express or implied warranty as to its accuracy. We do not accept any liability for error or omission. Examples are provided for illustrative purposes only and should not be construed as investment advice or strategy.

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3

Introduction

Welcome to the Forex Trend Directive Report!

In this report you will learn how to trade this incredible system and also get

a chance to see how you can install the chart template that is provided

together with this powerful trading system. The Forex Trend Directive

system was developed and has been traded by professional hedge fund

traders. This is in fact, the very first time that the details of this unique

trading system are being released to the public.

The Forex Trend Directive system relies on using standard indicators that

are available on all trading platforms available on the web. The indicators

that are used with this system are the Moving Averages. If you’ve been

trading for any amount of time, you may already be familiar with the Moving

Averages indicator. However, when trading the Forex Trend Directive

system we will be using this indicator in a unique manner.

The trading method you are about to learn relies on 3 different moving

averages, each with a different configuration. But that’s not all, the true

power of this system comes from the manner in which we identify trade

signals. To aid us in identifying valid trade signals, we will refer to multiple

timeframes but in specific combinations. We’ll take a look at the specific

details of the system in the following chapters. All of the system settings

are provided for you in a chart template that can be applied immediately

onto your MetaTrader 4 trading platform.

This system performs extremely well on its own, but the techniques you will

be learning about can also be applied to any other trading systems you

may already be trading. The system is versatile as it can be used on all

timeframes and currency pairs. The rules are simple and straight-forward,

so you can start using it immediately after reading this manual. So, let’s get

started and take a closer look at how it works.


4

Setting Up Your Charts

In this section we will take a closer look at the indicators and how to

prepare your charts for trading. Before you can proceed with the steps in

this chapter, please ensure that you have downloaded the MT4 trading

platform or any other trading platform of your choice. Once the system

indicators are applied to your charts, it should look similar to the chart

shown on the following image.

The first thing you will need to do is configure your charts to display price

as bars instead of candlesticks. The system itself can also be traded with

candlesticks but I’ve found that reading the opens and closes on bars can

be easier.

In order to do this, open a new chart on your trading platform then press

the F8 key on your keyboard to open the chart Properties window. Next,

click on the Common tab and click on the Bar chart option on the right hand

side of the window. You can see an image showing you these settings on

the following page.


5

Once you have selected the Bar chart option on the right hand side of the

window click on the Chart shift and the Chart autoscroll options on the left

had side of the window to ensure the most recent activity on the chart

remains in constant view.

On the following image you can see an example of how the Properties

window should appear once you have configured the settings.

Once you have selected the options shown on the image above, simply

click on the OK button and you’re ready to add the rest of the indicators.

The next set of indicators we will be adding to our charts are the Moving

Average indicators. The Moving Average indicator is included among the

standard indicators that come bundled with the Metatrader (MT4) trading

platform and nearly all other trading platforms available to traders these

days.

In the following section I will show you how to add the 3 variations of the

Moving Average indicator we will be using to your charts and how to

configure the settings of each to accommodate our trading method.


6

To apply the Moving Average indicator on to your chart you will need to

click on Insert on the top menu of the trading platform. Next click on the

Indicators link then click on Trend and finally click on Moving Average.

You will then be presented with the Moving Average properties window as

shown on the following image:

As you can see on the image above, there are a few parameters to be set

on this indicator. The first setting to change is the Period setting which must

be set to 5. Next, choose the Simple MA Method from the dropdown list

then choose Low from the Apply to dropdown box.

Finally set the Style color to Red and click on the width dropdown and

select the second line to ensure that the line is thick enough to be visible on

your charts. If you feel that the line you see on your chart is either too big or

too small. Simply choose a different line thickness suit your viewing

preferences.

Once you have configured the settings on this window, simply click on the

OK button and the first Moving Average indicator will now be applied to

your chart.

Let’s now take a look at the next Moving Average indicator we will be using

in the Forex Trend Directive system.


7

The next indicator we will add on to our chart is a 5 period Simple Moving

Average of the Highs. Once again, to add this indicator to your chart simply

click on Insert on the top menu of the trading platform. You then click on

Indicators then click on Trend. Now locate the Moving Average option and

click on it to apply it on to your chart.

You will again be presented with the Moving Average properties window as


On the Parameters tab change the Period setting to 5. Next, select the

Simple option from the MA method dropdown list and finally select the High

option from the Apply to dropdown list.

You also have the option to set the Style properties of this indicator. I

personally like to use a DarkOrange colored SMA and also increase the

width of the line so that it is a bit clearer to see on my chart. You are

welcome to configure the Style options to suit your personal preferences.

Once you have configured the settings on this particular window, simply

click on the OK button and the indicator will now be applied to your chart.

At this stage we need to add just one more indicator to our charts before

we can start trading the Forex Trend Directive system. So let’s take a look

at the final Moving Average indicator we will apply to our chart.


8

The final indicator we will add to our charts is a 50 period Exponential

Moving Average. To apply this indicator to your chart simply click on Insert

on the top menu of the trading platform. Next click on Indicators then click

on Trend. Now locate the Moving Average option and click on it to apply it

on to your chart.

You will again be presented with the Moving Average properties window as


On the Parameters tab change the Period setting to 50. Next, select the

Exponential option from the MA method dropdown list and finally select the

Close option from the Apply to dropdown list.

Once again, you have the option to set the Style properties of this indicator.

I personally like to use a Blue colored EMA and also increase the width of

the line so that it is a bit clearer to see on my chart. Of course, you are

welcome to configure the Style options to suit your personal preferences.

Once you have configured the settings on this particular window, simply

click on the OK button and the indicator will now be applied to your chart.

Congratulations! You’ve now configured the indicators that we will be using

to trade the Forex Trend Directive system and you are now ready to learn

how to identify Buy and Sell trade signals with this system.

Let’s begin with the Buy trade rules and an example of a Buy trade.


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Buy & Sell Trade Rules

LONG ENTRY RULES:

1. On the higher timeframe the 5 SMA of the Highs and the 5 SMA of the

Lows should be above the 50 EMA (see timeframe combinations below).

2. On the higher timeframe, wait for a bar to close above the 5 SMA of the

Highs.

3. Switch to the lower trading timeframe (see timeframe combination below)

and confirm that the 5 SMA of the Highs and the 5 SMA of the Lows are

both above the 50 EMA.

4. Wait for a bar to close above the 5 SMA of the Highs then enter a Buy

trade at the open of the new bar.

5. Set a Stop Loss at or below the 5 SMA of the Lows.

6. Set a Take Profit at two times the size of your Stop Loss (2:1

Risk/Reward Ratio) or exit the position manually when a new bar closes

below the 5 SMA of the Lows.

7. Move your Stop Loss to breakeven when price reaches 50% of your

Take Profit.

Here’s a list of Lower timeframes and Higher timeframes. On the right side

we have the Higher timeframes used to identify potential trade entries and

on the left side we have the Lower timeframes where we place our trades.

M1 – M5

M5 – M30

M15 – H1

M30 – H4

H1 – H4

H4 – D1

D1 – W1

W1 – MN


10

LONG/BUY Example

This is a trade taken on the USDJPY currency pair on the M15 timeframe.

Since we are trading the M15 timeframe, we

begin on the H1 timeframe to identify a

potential trade setup. At point 1 on the H1

timeframe, the 5 SMA of the Highs and the 5

SMA of the Lows are above the 50 EMA.

At point 2 we have a bar that closes above the

5 SMA of the Highs. At this point we may

switch to the lower timeframe and identify our

entry level.

On the image below you can see the M15 chart where we placed our entry.

At point 3 the 5 SMA of the

Highs and the 5 SMA of the

Lows are both above the 50

EMA. At point 4, we have a

bar that closes above the 5

SMA of the Highs so we may

now enter a Buy trade at the

open of the next bar. At point

5 we set a Stop Loss at the 5

SMA of the Lows.

At point 6 we set a Take Profit

at two times the size of our

Stop Loss. With this trade

there was no chance to exit

early as no bars closed below

the 5 SMA of the Lows.

At point 7 we could have

moved our Stop Loss to breakeven but as you can see we were taken out

in profit a few bars later. Excellent trade!


11

Now let’s take a look at the rules for sell/short trades:

SHORT ENTRY RULES:

1. On the higher timeframe the 5 SMA of the Lows and the 5 SMA of the

Highs should be below the 50 EMA (see timeframe combinations below).

2. On the higher timeframe, wait for a bar to close below the 5 SMA of the

Lows.

3. Switch to the lower trading timeframe (see timeframe combinations

below) and confirm that the 5 SMA of the Highs and the 5 SMA of the Lows

are both below the 50 EMA.

4. Wait for a bar to close below the 5 SMA of the Lows then enter a Sell

trade at the open of the new bar.

5. Set a Stop Loss at or above the 5 SMA of the Highs.

6. Set a Take Profit at two times the size of your Stop Loss (2:1

Risk/Reward Ratio) or exit the position manually when a new bar closes

above the 5 SMA of the Highs.

7. Move your Stop Loss to breakeven when price reaches 50% of your

Take Profit.

Similar to Buy trades, we have a list of Lower timeframes and Higher

timeframes that are part of the Forex Trend Directive system.

On the right side we have the Higher timeframes used to identify potential

trade entries and on the left side we have the Lower timeframes where we

place our trades.

M1 – M5

M5 – M30

M15 – H1

M30 – H4

H1 – H4

H4 – D1

D1 – W1

W1 – MN

On the following page you can see an example of a Sell trade.


12

SHORT/SELL Example

This is a trade taken on the EURUSD currency pair on the M15 timeframe.

Since we are trading the M15 timeframe, we begin

on the H1 timeframe to identify a potential trade

setup.

At point 1 on the H1 timeframe, the 5 SMA of the

Highs and the 5 SMA of the Lows are below the 50

EMA.

At point 2 we have a bar that closes below the 5

SMA of the Lows. At this point we may switch to the

lower timeframe and identify our entry level.

On the image below you can see the M15 chart where we placed our entry.

At point 3 the 5 SMA of the Highs and the 5

SMA of the Lows are both below the 50

EMA. At point 4, we have a bar that closes

below the 5 SMA of the Lows so we may

now enter a Sell trade at the open of the next

bar.

At point 5 we set a Stop Loss at the 5 SMA

of the Highs and at point 6 we set a Take

Profit at two times the size of our Stop Loss.

Once again, with this trade there was no

chance to exit early as no bars closed above

the 5 SMA of the Highs.

At point 7 we could have moved our Stop

Loss to breakeven but as you can see we

were taken out in profit a few bars later.

Another excellent trade!


13

Installing the Template

The installation of Forex Trend Directive chart template is actually very

easy, as it comes with an autoinstaller which will take care of everything for

you. After you download ForexTrendDirective.zip, if you have Windows 7 or

higher you can either right click on the file and choose “Extract” or simply

double click to open it. If you have a Windows version prior to Win 7, you’ll

have to download a free tool for extracting zip files, like WinRar.

After you’ve opened (or extracted) the downloaded archive, simply double

click on the ForexTrendDirective.exe file inside to start the autoinstallation

process. If you get a security warning, click “Run”. If you get a User

Account warning, click “Yes”. First, you’ll be prompted with the main

installation window, where you can simply click “Next”.


14

Next step is to read the licence agreement, check “I accept this agreement”

and click “Next”

Next step is to select the MT4 folders in which you wish to install the

software. If your broker/platform is installed, but not showing up, you can

use the “Add a MetaTrader folder” button to manually select the folder

where your platform is installed. After that, hit the “Next” button.


15

For the next three steps, you can just click “Next” and the indicator will be

installed for you. Simply click “Finish” and you’re done.

If you open your MetaTrader4 platform, open a new chart then click on the

Templates button, you should see Forex Trend Directive there. Simply click

on this item to apply the chart template to your chart.

And that’s all there is to it! You should now have the ability to apply this

system to any chart and identify trade signals whenever the conditions for a

Buy or Sell trade have been met.

At this stage you should have a good understanding of how the Forex

Trend Directive trading system works and you should be ready to start

applying it on your own. As with any other trading system out there, trading

the system does require practice and discipline on the part of the trader but

with a little time and effort, you too can enjoy the benefits of this system.


16

Conclusion

You will notice that the examples used in this manual show trades taken on

the H1 and M15 timeframes. These are the timeframes that I personally

enjoy trading with this system but it can be applied to all timeframes and all

currency pairs with similar results.

When trading on the lower timeframes it is recommended that you enter

trades only during the most active trading sessions and avoid trading

during range-bound conditions. When trading on the higher timeframes you

will find that signals occur less frequently but you can be sure that that

signals tend to be a lot more reliable and less prone to whipsaw. Avoid

entering trades when the Moving Averages appear to be flat or in a ranging

pattern (i.e. moving horizontally). The best trades can be found in areas

where the Moving Averages are sloping either upwards for Buy trades or

downwards for Sell trades. In cases where you find that your Stop Loss is

too large it would be better to skip or avoid the trade. For example, if you

are trading the 15 minute timeframe, a Stop Loss of 50 pips is simply too

large and you should not enter such a trade.

It is strongly recommended that when trading this system you use a Risk to

Reward Ratio of 1:2 or greater. In the examples you have seen that I tend

to prefer the RR Ratio of 1:2 to suit my trading style. You are welcome to

use a maximum RR Ratio of up to 1:4 with this system for the best results.

Using trailing stops and exit strategies that allow you to move your Stop

Loss to breakeven when in profit also have a positive effect on the system’s

performance. I know that you will enjoy trading this system either as a

standalone technique or an additional filter as part of a larger system. Once

you have mastered this system I am certain that you will enjoy similar

success. I wish you the very best in your trading adventures!

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