382# Forex Millionaire Strategy
Submit by Janus Trader 24/07/2012
The Breakout Indicator signals a range.
The price moves within this range before it breaks out of it.
The Range ends each morning at 9.00 GMT.
The Support and Resistance Indicator shows all Support and Resistance levels
on the chart.
The "Wochentag" indicator ( Wochentag = day of week ) allows to chose the
actual day of the week.
1 = Monday
2 = Tuesday
3 = Wednesday
4 = Thursday
5 = Friday
The "Wochentag" indicator draws the actual daily High and daily Low on the chart.
This indicator is useful for checking the daily range of the last days
and for calculating the average market volume.
1a. How to analyze a Range
Ranges evolve constantly, but we must decide which range can be used for trading.
Let us have a look at the EURJPY chart (M15) below:
All Support and Resistance levels have been numbered.
Support 1 and Resistance 1 form a range of about 20 Pips.
Placing long or short orders at top or bottom of the range would be nonsense.
We would be stopped out with such low ranges because 20 Pips are not much for the EURJPY
in a ranging market.
Support 2 and Resistance 2 look much better.
The range is about 35 Pips.
We place a LONG-order at Resistance 2 with TP 35 and SL 35
At Support 2 we place a SHORT-order with TP 35 and SL 35.
Both orders have identical lot-size.
The SL of the Long-order is identical with the entry of the Short-order.
The SL of the Short-order is identical with the entry of the Long-order.
As soon as one of the two orders is active ,
the lot-size of the corresponding pending order must be modified = must be doubled.
If the active order hits SL, the modified order with doubled lot-size should recover
the loss and end in an overall profit.
The Breakout Indicator can be used too for trading, given that the Range is big enough.
In the example the range of the Breakout Indicator is 50 Pips, which is ok.
Only use ranges of 35 - 60 Pips (for EURJPY) for trading breakouts.
Everything below or higher than these is too risky.
Since GBPJPY is very volatile, a range of 45 - 80 Pips is recommended for this pair.
After doubling the lot-size 4 times without getting profits, we don´t double the lot-size
anymore, but we double the TP ( and SL ).
If TP has been 35 Pips , we double it to 70 and SL must be modified from 35 to 70 too.
3. Shadow Trend System
Find a currency pair with a daily range of 150 - 200 Pips.
On that pair find a range of 60 Pips ( 60 Pips difference between a Support-line and
a Resistance-line on the chart ).
Place a LONG order (pending = BUY-STOP) at the top of that range (= on the Resistance-line) with
TP 60 and SL 60.
Place a SHORT order (pending= SELL-STOP) at the bottom of the range (= on the Support line) with
TP 60 and SL 60.
Lot-size of both orders = 0.1 lot
Now the critical and most important point of this system:
Place a second LONG-order (pending) 10 Pips above the first Long-order.
TP 60 , SL 60
but lot-size = 0.2 lot.
Place a third LONG-order (pending) 10 Pips above the second Long-order.
TP 60 , SL 60
but lot-size = 0.3 lot.
You have 3 LONG-entry orders in 10 Pip steps.
The same procedure with the SHORT-orders.
Place a second SHORT-order 10 Pips below the first Short-order.
TP 60 , SL 60 Lot-size = 0.2 lot
Place a third SHORT-order 10 Pips below the second Short-order.
TP 60 , SL 60 Lot-size = 0.3 lot
When the second trade opens, the corresponding pending order has to be moved 10 Pips.
There has to be a 60 Pips distance for the corresponding orders.
The SL for the open order , which is 60 Pips, has to be the entry for the pending order
into the opposite direction.
We will now explain the system with a few examples
The 2 red lines indicate a range of 60 Pips ( = distance between both lines is 60 Pips ).
The distance of 60 Pips is used for TP and SL.
First Long entry is placed on the level of the higher red line (Resistance line).
First Short entry is placed on the level of the lower red line ( Support line).
Here an example how the entry-orders should be placed:
In this example no opposite order was opened.
The Short-Entries must be deleted after the first Long-TP has been hit.
1.long= Profit 60 pips x 0.10 lot = 60,-USD
2.long= Profit 60 pips x 0.20 lot = 120,-USD
3.long= Profit 60 pips x 0.30 lot = 180,-USD
Balance = 10360,-USD
Another Trade Session which should be analyzed closely:
1.long= -60 pips x 0.10 lot= -60,-USD
2.long= -60 pips x 0.10 lot= -120,-USD
3.long= -60 pips x 0.30 lot= -180,-USD
Result long session: -360,-USD
Balance = 9740,-USD
1.short= -60 pips x 0.20 lot= -120,-USD
2.short= -60 pips x 0.40 lot= -240,-USD
3.short= -60 pips x 0.60 lot= -360,-USD
Result short session= -720,-USD
Balance = 9040,-USD
4.long= -60 x 0.40 lot= -240,-USD
5.long= +60 x 0.80 lot= +480,-USD
6.long= +60 x 1.20 lot= +720,-USD
Result long session= +960,-USD
Balance = 10000,-USD
4.short= -60 x 0.80= -480,-USD
5.short= -60 x 0.20 = - 120,-USD
6.short= -60 x 0.30= -180,-USD
Result short session= -780,-USD
Balance = 9220,-USD
7.long= -60 x 1.60 = -960,-USD
8. long= +60 x 0.40 = +240,-USD
9.long= + 60 x 0. 60= +360,-USD
Result long session= -360,-USD
Balance = 8860,-USD
7.short= -60 x 3.20 = -1920,-USD
8.short= -60 x 0.20 = -120,-USD
9.short= -60 x 0.30 = -180,-USD
Result short session= -2220,-USD
Balance = 6640,-USD
10.long= +60 x 6.4 lot = +3840,-USD
11.long= +60 x 0.40 lot= +240,-USD
12.long= +60 x 0.60 lot= +360,-USD
Result long session 4440,-USD
Balance = 11080,-USD
It was a longer session but more profitable because often trades were closed
in profit before the session ended.
The complete session ends when the first trade hits TP, even after a series of losses .
All open pending orders must be deleted and all other open trades be closed.
Both variants ( first variant under money-management, second variant is Trend Shadow ) can cause a big drawdown.
Increasing Profits: How to make 210 Pips trading a 60 Pips range
This is a chart which I took a screenshot from early in the morning.
The Daily Range is small yet.
You see it at the two light-blue dotted lines on the chart.
We neglect the Daily High and use the High of the chart and the Daily Low.
The range (distance) between those is 40 Pips.
It is a perfect example to demonstrate the strategy.
I trade 0.5 lots per $10.000 balance .
At the High on 124.60 we place the first LONG-entry and 10 Pips above the second and 10 Pips
above the third.
We now have 3 LONG-entry-orders (pending).
Long 1: 124.60 0.5 lots
Long 2: 124.70 0.5 lots
Long 3: 124.80 0.5 lots
Now we place the SHORT-orders, starting at the bottom of the range at 124.20
Short 1: 124.20 0.5 lots
Short 2: 124.10 0.5 lots
Short 3: 124.00 0.5 lots
NO SL for all orders. Range = 40 Pips. We don´t need a SL for this strategy.
We assume that the price goes up and the first Long-order is opened at 124.60 .
Now we have to wait what happens.
If the price rises another 10 Pips, the second Long-order will open
If price moves another 10 Pips up, we move the SL of Long-1 10 Pips up
and place a SL for Long-2 to break-even.
Long-3 has been opened now.
We would have 3 open orders now.
Long 1 : 20 Pips in profit , SL at 124.70
Long 2 : 10 Pips in profit , SL at 124.70
Long 3 : 0 Pips in profit , no SL
(The whole example neglects the spread to make it more simple.)
If price moves up without retracing 10 Pips, we would get 555 Pips profit in a 100 Pips move
If price moves not in such a nice way and Long-1 has been opened but then the price
moves downwards, the first SHORT-order will open 40 Pips below the Long-1-entry.
If price would move 100 Pips down, the opened Long-1 trade would be no problem
because the 3 Short-orders would give us much more profit than the loss we would take
by closing the Long-1 at the end of the session.
If Long-1 is opened, then price falls and opens Short-1, then goes up 100 Pips, it does
not matter because the 3 Long-trades would give us much more profit than the loss
we take from the Short-1 trade by closing it at the end of the session.
If Long-1 opens, then price falls and opens Short-1 at 124.20 and Short-2 at 124.10, then price moves up 10 Pips,
our Short-1 would close at breakeven (remember: we move SL to breakeven when a trade is
10 Pips in profit).
In this case we open a new pending Short-order 10 Pips above = at 124.30 .
If that new Short-order is opened and price moves down again, we would have 2 open
Short-trades already, but now the distance of the new Short to Long-1 is only 30 Pips
instead of 40 Pips.
If price moves down in favor of our Short-orders, we can close Long-1 as soon as we
are contented with the overall profit.
If price does not move down but up, we would have 2 open Short and the open Long-1.
In this case we place a new BUY-STOP-order 10 Pips below the entry-price of Long-1 in order to reduce the distance to our Short-orders.
If price moves up and touches 124.50 , the new Long-order is opened.
We then have 4 open orders:
Long-1 at 124.60
Long-(4) at 124.50
Short-2 at 124.10
Short-(4) at 124.30
It is important to keep the range tight with this strategy because we will get confused
and loose the overview if the range is too big.
Price will break out in one direction sooner or later.
We only have to be patient and stay relaxed and continue to play this game.
Share your opinion, can help everyone to understand the forex strategy.