Dear Forex Trader,

Recently, a close friend of mine who knows me for years admitted to me that he lost over $21,000 trading forex market in less than three months time. Well, there would be nothing strange about it if there wasn't one very important fact. He is MY friend. And he knows that I'm a forex trader and he also knows that I'm a very successful forex trader. So I asked him why didn't he consult me when he was starting, actually I was very disappointed that he even hid from me the fact that he was involved in forex. He told me that every time when he heard me talking about forex I was always using words such as "hard", "stressful", "dangerous"... He said that he didn't like to hear those words.

So one evening he was surfing the web and he stumbled upon one site that he says "stood out". Everything that he read on that site was completely opposite of anything that he heard me saying. "Forex trading is easy..." "Anyone can do it with just a little bit of effort..." "You can quit your day job..." And he was hooked. He bought their system and opened demo account. His demo account was set at $50,000, few lucky trades over the next four weeks and his demo account grew to $78,000. Wow! Twenty eight thousand dollars in four weeks. As any other beginner he was thrilled. He withdrew $10,000 from his hard earned savings account and he was all set to accomplish his dreams.

However, very soon he realized that trading for real money and trading demo account have nothing in common. When real money got at stake, he became different person. Nervous, scared, he took his profits way too early and stayed in losing trades far more than he was supposed to. His money was melting before his eyes! He added another $5,000. Then he borrowed another ten thousand from his line of credit. He came to me when he was down to the last three thousand and nine hundred dollars.

When you're starting out, one of things you discover is that only a few forex traders actually scoop profits out of the market consistently. Just a tiny minority. Everyone else is losing, or just breaking even.

So what's their secret? Do winning forex traders have some special talent? Have they found some inside knowledge and locked the rest of us out? Do they have a knack of thinking "positive" or thinking "winning"? Are their computer more powerful and their trading software more sophisticated?

What is it?

Well...It's none of the above!

Let's have a look at the figure below.

The typical beginner trader moves with the "herd". He sees a rally, doesn't want to be left out, and enters the market at point A. However, by then, winning traders, who were in earlier, start to cash in on their profits and the rally loses steam. So the beginner's position falls. His money is dissolving before his eyes! Either he panics and gets out at point B, when he can't bear the pain any more. Or, if he somehow manages to stay in long enough to see the next rally, he leaves at point C, relieved to recover at least some of his losses. This is exactly the kind of "herd" trader that successful traders prey upon.

But actually the beginner also lost at point C. Because during that exact same move the winning traders had leveraged their trading capital, entered and exited at the optimum times, and stuffed their accounts with profits!

If you want to learn how to enter and leave like the winners do, you should keep reading.

"How to leverage your capital in order to multiply your profits."

Many beginning traders don't fully understand the concept of leverage. Basically, if you have a start up trading capital of $5,000 and if you trade on a 1:50 margin you can effectively control a capital of $250,000. However, a two percent move against you and your trading capital is completely wiped out. If you are a beginning forex trader you should not use more than 1:20 margin until you get comfortable and profitable and then and only then you can attempt to use higher margins.

What does 1:20 margin mean? It means that with your $5,000 you will control a capital of $100,000. Let's say you are trading the currency pair EUR/USD and by using our entry strategy you have decided to enter the trade on a long side. That means that you are betting that USD will depreciate against Euro.

Let's say current EUR/USD rate is 1.455. Again, if your trading capital is $5,000 and you are using 1:20 leverage you will effectively be exchanging $100,000 to Euros. If the current rate is 1.455 you will receive 100,000/1.455 = 68,728 Euros.

If the trade goes in your direction margin will work in your favor and 1% decline in USD will mean 20% increase in your start up trading capital. So if EUR/USD rate moves from 1.455 to 1.469 you will be able to exchange your 68,728 Euros back to $101,000 for a profit of $1,000. Since your start up trading capital was $5,000 it is effectively a 20% increase in your account. However, if the trade went against you and USD appreciated 1% vs. Euro your account would be reduced to $4,000.

"If you want to get to the top of the forex market “food chain” you have come to the right place."

In our quest to find the most profitable and at the same time for a "small" trader feasible forex trading system we have tested and analyzed many different forex trading strategies. The strategies that we have tested were ranging from simple combinations of TA indicators to more complex trading systems that were utilizing support/resistance levels, pivot points, chart patterns etc... However in order to reduce the number of systems that were later scrutinized more closely, we have developed our own system selection criteria. Basically the system that we were after had to have following properties: Simplicity, Efficiency and Consistency.

As we all know forex trading strategies are becoming more and more complex and sophisticated. What does it mean for our average independent forex trader? It means that our simplicity factor when developing a trading strategy gains in importance.

What usage could an average person make from a forex strategy that requires or presumes a profound knowledge in mathematics at a PhD level and a computing power beyond that of the newest personal home computer? A type of highly complex strategies commonly used by investment companies are neural networks. A neural network is, in short, a model of interconnected neurons (also known as nodes) that was inspired by the logical neurons in human nerve system. Like the human brain a neural network can acquire, store and utilize experiential knowledge in order to improve its performance day by day. Regrettably, to consistently use a forex strategy based on neural networks one requires the complex knowledge of how to feed a neural network with history data as well as excessively high computing power not affordable to our average forex trader.

Therefore we have set ourselves with a goal of finding a forex strategy that is comparable in its profit potential to the most complex professional trading system and at the same time is feasible and understandable to our average trader.

Simplicity

It has to be, of course. You don't want to have to attempt to understand the sophisticated, complex trading systems employed by the major corporate investors, with their teams of fully-resourced professionals using highly developed automated tracking networks and advanced mathematical formulas spread through several floors of their head office. Neither do you want to have to spend on an expensive, top-of-the-line computer stuffed with proprietary trading software.

Rather, you want a simple strategy which you can understand and quickly implement, and yet gets the same trading results as those coming out from the corporate office tower blocks. Our forex strategy delivers the results, yet is striking in its simplicity and elegance.

Next, our forex strategy is efficient.

Efficiency

That means, it is profitable. This is how various trading strategies are compared, actually. A system that shows more profit during a specific period is said to be more efficient. Our personal experience with this new strategy, and the extensive tests we have run, all show it is ruthlessly efficient. In fact, we have noticed that if a trader will simply follow our forex strategy, they will succeed. Forex strategies just don't get more efficient than that!

"Here are the results achieved by our strategy"

To put it in layman's terms, a $5,000 start up capital combined with the power of leverage grew to $12,940 for the EUR/USD currency pair, and it grew to $15,171 for the USD/CAD currency pair. And that is for the period of only two months!

Images below are example trades for the time period described above. Simply click on the images to enlarge...