The M15 Dance Manual

7/30/2019 The M15 Dance Manual

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Contents

Legal Disclaimer 3

Author's Note 3

What this manual DOES NOT cover 5

The Rules 5

Additional Considerations and Denitions !

The Sim"lied Rules #$

T%E CARD&NAL RLE #3

sing (rice Action #3

Chart Setu" #)

Ta*ing The Trade+ #!

The Constrainment Trade $#The AAA ,Touch- Trade Entr. $$

%o/ To Let The 0ar*et ,Sho/ &t's %and- $1

(utting &t All Together $)

Rening the Entr. $!

A Word A2out Wic*s 3#

Sta. OT+ 3#

Trade Ris* 0anagement 3$

Trailing the SL 35

Setting " The Charts 34

sing The (role 6

sing The Scri"ts #

Dancing (ractice 1

&t's A 7usiness+++ 4

0aster The Trades+ 5#

0a*e &t 8ours+ 5$A 9e/ Live E:am"les 53

Co".right Cla. 9errell; $66! < $6#6 an. e=ort to change >or this 2asic set o> rules o>the strateg. is strictl. >or2idden unless "rior /ritten "ermission is granted 2. theauthor?


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Legal Disclaimer:

Trading >oreign currencies is an extremely risky activity 2ut is "otentiall. a"rota2le o""ortunit. >or educated and e:"erienced investors? 7e>ore deciding to"artici"ate in the 9ore: mar*et; .ou should care>ull. consider .our investmento2@ectives; level o> e:"erience and ris* a""etite? Most importantly, do notinvest money you cannot aford to lose

? There is considera2le e:"osure to ris*in an. >oreign e:change transaction? An. transaction involving currencies involvesris*s including; 2ut not limited to; the "otential >or changing "olitical andoreconomic conditions that ma. su2stantiall. a=ect the "rice or liBuidit. o> acurrenc.; the ris* o> settlement discre"ancies; 2ro*er errors and mal>easance;outright >raud and man. others?

0oreover; the leveraged nature o> 9 trading means that an. mar*et movement /illhave an eBuall. "ro"ortional e=ect on .our de"osited >unds? This ma. /or* against.ou as /ell as >or .ou? The "ossi2ilit. e:ists that .ou could sustain a total loss o> allinitiall. de"osited margin >unds and 2e reBuired to de"osit additional >unds tomaintain .our "osition /ith an. given 2ro*er? &> .ou >ail to meet an. margin calls/ithin the time "rescri2ed; .our trading "osition ma. 2e liBuidated and .ou ma. 2eres"onsi2le >or an. resulting losses; including amounts "otentiall. more than .ourde"osit?

The content "rovided herein is "ut >or/ard in good >aith and 2elieved to 2e accurateand e=ective; ho/ever; there are no e:"licit or im"licit /arranties o> an. *ind madein connection /ith this in>ormation? Should .ou choose to use this strateg.; .ou /ill2e trading e:clusivel. at .our o/n ris* o> .our o/n >ree /ill?

7. using this Strateg.; the reader thats .ou+F agrees not to hold the author o> thisin>ormation; or an. o> his or hers aGliates; assigns; or heirs lia2le >or and to

e:"licitl. hold harmless >rom an. decisions that .ou ma*e 2ased on in>ormationcontained in this document; or an. in>ormation >ound on an. electronic >orum or>rom an. email discussing this strateg.; no matter /here it is or /here this strateg./as "ut >or/ard?

&> .ou do not agree /ith the all o> the a2ove; do not trade using an. o> thisin>ormation or an. "art o> this strateg.?

Author's Note:

Learning to trade is a ver. "ersonal thing? The @ourne. can 2e e:tremel. >rustrating;is almost al/a.s a lonel. @ourne.; 2ut is al/a.s /orth it?

Rule num2er # in learning to trade 9ore: is that .ou can get ever.thing .ou need >or>ree i> .ou are /illing to do some research and some /or* on .our o/n? (a.ing >or,s.stems- is stu"id? The. are a dime a doHen and al/a.s /orth less than .ou "a.>or them? 8our o/n mind is the onl. thing .ou need? 7en@amin 9ran*lin said;,Em"t. .our "urse into .our mind and .our "urse /ill never 2e em"t.+-

That is amaHingl. good advice? Training is /orth "a.ing >or; 2ut in 9ore:; .ou canget all .ou could ever /ant or need mostl. >or >ree?

9or the most "art & have >ound trading to 2e an arena lled /ith tons and tons o>/anna2e gurus; sheister "romoters and most im"ortantl.; ,sel>I>ullling"ro"hecies?- 9or e:am"le; 9i2onacci lines; Andre/s (itch>or*s; 0oving Averagesand Su""ort Resistance levels all /or* reall. /ell 2ecause so ver.; ver. man.


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"eo"le use them; 2ut the. o>ten >ail as /ell 2ecause some larger "la.er moves themar*et or some other inJuence does?

,Round Num2ers- also /or* ver. /ell >or the same reasons? There is nothingmagical in an. o> this; @ust "lain old human "s.cholog. at /or*? 9ear *ee"s "eo"letra""ed and ma*es certain levels stronger than others? Kreed does much the same

@ust in a di=erent /a.?

&> .ou /atch "rice action around Andre/'s "itch>or*s; .ou /ill see the e:act samesort o> movement as .ou do around longer term 0oving Averages? Nature loves a2alance and "eo"le instinctivel. understand that?

What goes u" must come do/n; ever.one *no/s that+ &nertia *ee"s moving o2@ectsin motion and resists o2@ects at rest >rom movement? Ever.one *no/s that too+

Li>e is lled /ith c.cles; /hich scientists no/ call ,circadian rh.thm?- Night andda.; rise and >all o> the tides; slee" and /a*ing; e:citement and de"ression?Ever.one *no/s this too+

9ractal technolog. is the science o> ho/ larger things are 2uilt on smaller things?ust loo* at a tree? One line ,2ranches- into multi"le lines and eventuall. /e havethe sha"e /e recogniHe trees to have; 2oth in 2ranches and roots?

(eo"le have 2een tr.ing to a""l. all these "rinci"les in di=ering methods to themar*ets >rom /hen the rst mar*et "lace /as ever created? ust loo* at ho/ longthe a"anese *e"t records o> the rice mar*ets /ith candlestic* charts? The same istrue o> the grain mar*ets in more Euro"ean areas; @ust not /ith candle stic*s?

The /hole "oint in all this is that li>e is 2uilt on sel>I>ullling "ro"hecies ande:"ectancies? So are the mar*ets? &t is s"ecicall. the ,sel>I>ullling "ro"hecies-that ma*e 9ore: tradea2le and "rota2le i> .ou learn to use them e=ectivel.? Also;each "erson is 2uilt di=erent and di=erent ,sel>I>ullling "ro"hecies- /ill /or* >or

di=erent "eo"leTrading is no more diGcult than nding one or more o> these that .ou canunderstand; ,see- clearl. on a chart and trade e=ectivel.? &t's reall. more li*e adance or a video game than an.one /ants to admit?

There is an old countr. /estern song that sa.s; ,One ste" >or/ard and t/o ste"s2ac*; no one gets ver. >ar li*e that?- 7T; that is not true?

&n a dance there are t/o "artners? One leads; one >ollo/s? 9or the most "art the,male- leads and the ,>emale- >ollo/s? She is traveling along in the dance @ust as>ast as he is; onl. she is doing it 2ac*/ards+ She is also ta*ing all o> her ,cues->rom him? Without 2oth "artners there /ould 2e no dance?

&n trading; the mar*et is ALWA8S the ,male- and traders are ALL ,>emale- ta*ingtheir cues >rom ,him- AND; the. must do it in res"onse ra"idl. and 2ac*/ards?

&> one over anal.Hes a dance techniBue the. mess it u"; the ,Jo/- o> the dancesu=ers and sometimes the. even get hurt? &> the. don't understand the cues thesame thing ha""ens; onl. o>ten it's /orse? Trading is no di=erent? So; learn todance? Learn to ta*e cues >rom the mar*et and @ust have >un+

Credit where Credit is Due!

This strateg. is a com2ination o> t/o main strategies that & greatl. admire? The rstis trading 0oving Average 2ounces /hich osh 9ord taught me? Second is ames#1


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>or his thread on (rice Action 7ars at 9ore:9actor.? Lastl. & learned a2out ,RoundNum2ers- and their e=ects reading ac*o's Thread also on 99?

All & reall. did /as to listen attentivel. to /hat osh taught me and document man.o> the ,nuances- o> trading 0oving Averages the /a. he does it? &t is amaHingl."o/er>ul+

A Word About Idiots and Neanderthals

This strateg. /as originall. "osted to 9ore:9actor. /ith the intent o> it 2eing a ,>or>ree- trading strateg.? Nothing /as ever as*ed >or in return and no o=ers /ere evermade in regards to its use; training to use it; and the Author NEMER EMER tradesAN8 managed accounts? There is no need to?

Still; >or some reason a >e/ decided that the Author's ,/riting st.le- /as similar tosome idiot /ho su""osedl. de>rauded some on that >orum 2. trading managedaccounts? Though & am not >amiliar /ith the stor.; let me sa. this? AN8ONE /ho

EMER gives their hard earned cash to a stranger the. meet on an internet >orum >ortrading; is as much o> an idiot as the "erson doing the trading is? 7OT% o> them arereall. stu"id?

With that said; the neanderthals on 9ore:9actor.; /ithout an. evidence o> an. *ind;and the lame 2rained site administrator /ho admitted in his "ost 2anning theAuthor that he had NO hard evidence o> AN8 *ind; still destro.ed the teaching o> aver. solid and >ree strateg. to man. /ho reall. needed that >ree teaching?

The strateg. is still there in the ,Rec.cle 7in- i> .ou /ant more in>ormation on this2asic set o> rules at the >ollo/ing lin* and a trader using the screen name o> ostas#has ta*en it u"on himsel> to continue the original /or*; /ith this Author's a""roval?

T%&S manual is "ro2a2l. "osted on his thread to *ee" m. /ord that & /ould reI/or*it a 2it and to assist him in his e=orts to continue the /or* teaching The Dance?

The Dance is here htt"///?>ore:>actor.?comsho/thread?"h"PtQ$$1!4

ostas#'s thread is here htt"///?>ore:>actor.?comsho/thread?"h"PtQ$31$#6

Disclaimer The Author o> this manual has no relation to the trader *no/n asostas#; and is NOT res"onsi2le in AN8 WA8 >or /hat is taught on that thread andacce"ts NO lia2ilit. in an. /a.; sha"e; >orm or >ashion >or /hat occurs on thatthread?

What this manual DOES NO coer"

This manual's "ur"ose is to clean u" a 2it some o> the rules and the 2asics o> TheDance >ore: trading strateg.? &t is NOT a ,s.stem- and reBuires the reader toactuall. learn to trade? 7ut the re/ards >or that learning are staggering indeed /ithan average o> increase dail. "ossi2le until the account 2ecomes large enoughthat liBuidit. 2ecomes an issue?

&T DOES NOT include AN8 o> the ,advanced- rules though some are alluded to in thesections /here using ,Wic*s- is mentioned and others?

8O can also gure out the advanced rules sim"l. 2. their names &9 .ou are /illingto s"end some time in the Simulator and in trading Demo >or a /hile

The Advanced Rules; i> & ever decide to ma*e them "u2lic a>ter m. e:"erience at
http://www.forexfactory.com/showthread.php?t=224697http://www.forexfactory.com/showthread.php?t=236210http://www.forexfactory.com/showthread.php?t=236210http://www.forexfactory.com/showthread.php?t=224697


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teaching >or >ree at 99; are sing Dail. Wic*s >or entries and e:itsF; sing %ourl.Wic*s and Long Wic*s >or entries and e:its; %ome On The Range trading rangingmar*etsF; Scoo"ed trading strong reversalsF and (ing (ong learning to trade the,"ing "ong- area on the %#; D# and SO0ET&0ES the 0#5 charts?F

There are a >e/ more; 2ut &'m doing T%&S revision e:clusivel. to *ee" m. ,/ord-that & /ould do one and give it >or >ree as /ell?

& still DO NOT *no/ /hat & am going to do .et; a>ter the asco at 99; 2ut & /ill @ust*ee" mastering m. strateg.; ma*ing mone. and learning and hel"ing 9OR 9REE; a>e/ /ho have as*ed me to hel"? & W&LL NOT 2e acce"ting an.one to mentor /hichis also 9REE /hen & do itF?

he #ules:

7e>ore /e 2egin the rules section; .ou need to ma*e some decisions a2out .ourtrading right no/; right here? &> /hat .ou are loo*ing >or is a never >ail; "oint and

clic*; automated; does it all >or .ou sort o> thing; "lease don't trade at all; &m notsa.ing don't trade The Dance; &'m sa.ing nd something else to /aste .our mone.on?

&> /hat .ou /ant is reall.; reall. high "i" counts; "lease move on? That is NOT the"ur"ose o> The Dance? &> .ou /ant to trade ever. signal .ou see; move on to someother strateg. or s.stem? The Dance is not >or .ou?

&9 .ou /ant to learn to trade a sim"le s.stem that is >airl. eas. to learn; ma*e lotso> mone. and never need more than 6 "i"s a da. to do it? Welcome home; this isthe "lace? With time; .ou /ill also get to the larger "i" counts and to /here .ou can

ma*e a lot more trades; 2ut the 9&RST thing .ou have to do is master ONE strateg.and no more than t/o or three t."es o> entries and NEMER var. >rom them?

T%AT is /hat "ro>essional trading is a2out? A disci"lined a""roach to trading thatconsistentl. earns .ou income and /ealth? %ere are the rules?

rading imes:#? Trade ONL8 during theLondon$ N% Oerla& or (SD"airs?$? Trade ONL8 during the Asian$London Oerla& or )*%"airs?3? Trade ONL8 during the +ran,urt or E(#"airs?

#? O2viousl. some "airs t more than one session? Loo* u" the times on .ouro/n? Do SO0E /or*+ & use Eur".; K2"sd and Aud". 2ut onl. ONE on achart at a time? &t has m. TOTAL attention /hen & trade; /hichever one itis?

ime +rame:-" -. /inute charts ONL% or all entr0 signals"

#? The other charts are >or direction and ne tuning the entries and e:its asneeded?

$? The ti"s o> /ic*s on %#and D# are great SR Levels to ta*e trades o= and>or e:its?

3? Onl. ,Touch- trades are acce"ta2le on %# and D# and should also match(A on 0#5?

Chart setu&:


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#? No more than ONE ,main- chart set to 0#5 and t/o smaller charts >or each,main- currenc.? Smaller charts are set to %# and one to D#? 05 is ONL8 usedto ,ne tune- an entr.; 2ut DO NOT use it in the setu"? Learn to change the

T9 on the 0#5 to use it?

Entries:#? rade WI1 the 2trendo> the moment- +O# ALLtrades and assume the

trend /ill continue >rom the "revious session on the rst entr.? &> .ou2ecome reall. "rocient; .ou /ill learn to trade ,ranging- and Scoo"ed "areas as /ell; /hich are discussed later?

3" he .4 E/A with the 5. S/A moing aerages determine the trendor the moment on /-.!#? Loo* >orlongs ONL%/hen (rice; is a2ove the 56 E0A 35 S0ALines?$? Loo* >or shorts ONL%/hen (rice; is 2elo/ the 56 E0A 35 S0ALines?5" NO E6CE*IONS or beginners! *rice and 1E .4E/A$ 5. S/A

/(S A7#EE WI1 1E #ADE8 *#E+E#A9L% +#O/ A *(LL 9ACO the .4 or 5."

5" 2ouch rade Entries;#? a,en o< o a stee& 5. S/A are onl. acce"ta2le &9 (rice has have

moved at least #5 "i"s in the direction o> the trade; and o""osite the,touch- /hich is a short; ver. >ast ,run u"- or ,run do/n- to the Lines?e:"lained in the "rice action sections?F#? ,Touch Trades- o= the 35 S0A and 56 E0A are also ver. eas. to see 2ut

0ST 2e ta*en ONL8 i> the E0As are "arallel or ,on to"- o> each otherFand at a stee" angle; sa. a2out $6 Degrees or more as sho/n later inthis manual? 7e MER8 care>ul i> the. are nearl. horiHontal as the trade ismuch much /ea*er?

$? A ,Touch- 2. denition is usuall. onl. t/o or three 2ars in the reverse

more and most o> the time onl. one or t/o?#? &> there are lots o> smaller 2ars as "rice a""roaches the lines; DONOT ta*e the trade; /ait >or "rice to demonstrate res"ect >or the lineor constrainment?

3? %igher Time 9rame ,touch- trades against an. 0A are MER8 "o/er>ul?LOO 9OR T%E0+

$? a,en o< a stee& -4 E/A must also 2e a2ove the 56 E0A 35 S0A Lines>or longs and 2elo/ >or shorts?#? ONL8 trade the ,touch- o> the #6 E0A &9 it is the 9&RST or SECOND 2ar

in the retrace; it has a MER8 STEE( angle see e:am"le later in manualF;"rice has moved a strong ,distance- o> more than #5 "i"s and .ou

trade it EACTL8 at the ,touch- /ith no more then !I## "i"s SL?$? TWO BAR RULE >or #6 E0A ,Touch Trades- is sim"l. this? &t is a

,retrace- trade and normall. the E0A is at a ,ver. stee"- angle o> a2out5 degrees or more AND ta*es no more than TWO large 2ars to ,getthere- to ,touch- the #6 0AF and the retrace should 2e almost verticalor .ou should "ass on the trade and /ait >or (A to reveal /here (rice isreall. going?

3? On 0#5; "rice must ALSOhave moved over #5 "i"s 2e>ore the retraceto the ,touch- entr.+

? %igher Time 9rame ,touch- trades are MER8 "o/er>ul? LOO 9OR T%E0+

? I+ %O( /ISS ONE; DO NOT chase it or ta*e the entr. ,late- /ait >or anotherone; there are lots o> trades to ta*e? Ta*ing late entries /ill onl. increase .ourris* and >rustrate .ou?


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5? 2Constrainment rades;are ne:t 2est signals against the 35 or 56? The.can also ha""en at the #6 E0A @ust 2e more care>ul /ith the ones o= the #6E0A and use tighter sto"s?#? 7. denition ,constrainment- is a series o> 2ars that ,res"ect- a s"ecic

moving average in the Strateg.? suall. the 35 or 56 2ut can 2e the #6?$? O>ten these occur /ith several smaller 2ars 2eing ,constrained- 2. the

moving average involved and are Buite clear to see?

3? Constrainment ALWA%S has at least three barsin the setu" and o>tenseveral more?

Counter rend Entries: NO #ECO//ENDED AND NO NECESSA#% +O#7#EA 7AINS! Still; in a later section /e do discuss them a 2it?

/a=imum Number o rades!: NO E6CE*IONS E>E# !!!#? 0a:imum o> 5 success>ul trades? K&ME &T A REST a>ter that and s"end

some time doing something else; KET A L&9E a"art >rom trading?$? 0a:imum o> 3 Losing Trades? LEARN to sto" and get over it+

#? Three TOTAL (ER SESS&ON+

$? 0A&00 O9 TWO &N A ROW; then /al* a/a. and get a >resh"ers"ective+++

Sto& Loss:#? Sto" Losses need to 2e ,adeBuate- and that means di=erent SL on di=erent

currencies? &> .ou nd .oursel> using more than #5 "i"s consistentl. >or theSL; .ou need to rene .our entries?

$? 0ove the SL to 7E as soon as .ou >eel the trade /ill not ta*e out .our SL on a,2reath?-

3? A good "lace to set .our original SL is S"read @ust a cou"le o> "i"s 2elo/ ora2ove the "revious ,round num2er- or ema that "rice touched and moved

a/a. >rom? 7e sure to include the s"read?? EE* 1E/ I71!:During a move; *ee" the SL reasona2l. tight? 0eaning

move it to the 2ottom or to"F o> the last 2ar each time one closes until .ouget strong /ith this strateg.? This is es"eciall. im"ortant /ith AN8 sort o> (A2ar that might indicate a reversal; Tighten to the close o> the (A 7arimmediatel.+

*ro?t argets:#? Though there is no s"ecic T( in this strateg. other than the rst #5 "i" T(

set in the scri"ts? A>ter that is hit the 2est /a. to loc* in "rots is to move

.our SL to the e:treme o> the "revious 2ar s"read and /ait >or the current2ar to close? The onl. e:ce"tion to this is /hen a""roaching a ,roundnum2er- level or a stronger E0A li*e the 56 E0A 35 S0ALines on a retrace?

Tighten .our sto"s at those levels as "rice has a nast. tendenc. to reverse atthem? The other o"tion; /ith more e:"erience /ill 2e to e:it and immediatel.short at that ,rst touch- o> the 56 E0A 35 S0ALines?

$? &> it 2ecomes a""arent .ou are in a ranging or cho"". mar*et; @ust 2e a 2itmore care>ul and loo* onl. >or solid entries 2ased on SR levels such as theRound Num2ers and constrainment o> the lo/er level E0As; usuall. around a,round num2er- or "revious (A or SR level?

3? DO NO 9E A+#AID O AE %O(# *I*S EA#L% there will be more

trades!8ou don't have to *noc* it out o> the "ar* ever. time to 2e ver."rota2le /ith this strateg.; and it ta*es e:"erience to master the longertrades? Ta*ing a Buic* $6 or so on a move is com"letel. acce"ta2le and .ouW&LL get 2etter as time "rogresses?


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? &> (A indicates a reversal 2et/een ,round num2er- levels; get out+ There /ill2e more o""ortunities?

5? N+* DA%S @non arms &a0rolland heav. ne/s da.s can 2e un"redicta2le?sing the scri"ts /ill hel" a lot; 2ut latel. & have 2een ignoring the ne/sreleases in >avor o> the ,>actored in alread.- a""roach /here & @ust acce"t thatthe ,mar*et- has alread. ,>actored in- the ne/s and /hat it "ro2a2l. /ill 2e?With such high "ro2a2ilit. entries and short SLs Ne/s is much less o> a

concern to me latel.?

Loc,ing in *ro?ts:#? DO NOT change the entr. scri"ts unless .ou have alread. mastered The

Dance and have enough e:"erience to ma*e that decision? The. arema:imiHed >or "rota2le consistenc.; NOT huge "i" counts?

$? 7e cautious in moving .our SL too aggressivel.; 2ut *ee" it no >arther 2ac*than the 2ottom or to"F o> the second 2ar 2ac* >rom current "rice action and"re>era2l. no >arther 2ac* than the last 2ar 2ottom or to"F?

3? &> .ou have an e:tremel. large 2ar; move the SL to the @ust 2elo/ the last,Round Num2er- it "assed land /atch "rice movement ver. closel.? &> ithasn't .et "assed a Round Num2er level; move to slightl. less than 46 o>the 2ar's total and /ait? &t /ill either continue to e:"lode or retrace "rett.ra"idl. and ta*e out .our sto"? LARKE 7ARS RETRACE O9TEN; so don'thesitate to ta*e .our "i"s 2e>ore it hits the SL .ou are trailing AND SE T%E,round num2er- levels+

? &> a large 2ar ,dead ends- at a stronger E0A; or a ,round num2er- level; move.our SL ver. close to the level? (ro2a2l. a2out $ times S"read or less and/ait? &> the move is strong; it /ill continue and 2lo/ through "rett. Buic*? &>not it /ill ta*e out .our sto"?

#anging$ Consolidating /ar,ets:#? The 56 E0A 35 S0ALines have a strong tendenc. to either ,/ind- aroundeach other and ,Jattening- /hile stic*ing close to each other during a "eriodo> consolidation or ranging? On ,ranging- da.s .ou /ill o>ten see "rice also/ind around them and give .ou denite o""ortunities to enter at solid SRlevels or at Round Num2er levels on either side o> the 56 E0A 35 S0ALines?

$? 7e ver. cautious in these mar*ets unless .ou are e:"erienced /ith thisstrateg.? Wait >or 2etter signals i> not e:"erienced?

3? &> .ou do trade them; the scri"ts /ill hel" .ou mitigate ris* amaHingl. /ell?? 0OST o> .our entries in a ,rangingmar*et /ill 2e against the #6 E0A and the

move to 7E 0ST ha""en immediatel. a>ter the rst "osition is closed at the

T( o> #5 "i"s+

Com&ounding:

The Scri"ts allo/ .ou to use ,com"ounding- ver. easil.? DO NOT reIset the ris* inthe scri"ts unless .ou have lots o> e:"erience and do not ,com"ound- .our tradesiHe more than ONCE "er DA8 at the END o> the da.? Tr.ing to com"ound an. >aster/ill more than li*el. cause .ou "ro2lems?

Additional Considerations and De?nitions

Additional Considerations:Things to learn as .ou "rogress and denitions o>terms used in this manual?


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Currencies#? Though this document used the K7(SD and the ER(8; an. set o>

currencies .ou are com>orta2le trading is acce"ta2le? (re>era2l. one /ithlo/er s"reads and certainl. nothing /ith a s"read over 5? The larger thes"read; the more the trade must move 2e>ore .ou reach 7E? That increases.our ris* "er trade?

$? se onl. t/o currencies during the learning "hase? 8ou ma. increase the

num2er as .ou see t as .ou gain more e:"erience? 7ut 2e sure to *ee" .ourscreen and charts ,clean- so .ou can see clearl. as (A develo"s?

News: SA% O(!#? DO NOT trade during Ne/s?$? &> .ou are alread. &N a trade during the hal> hour 2e>ore Ne/s; AND in good

"rots /ith some loc*ed in; .ou might sta. in and tighten .our sto" loss 2ut2e care>ul? NO SL is guaranteed during ne/s?

3? &> .ou are NOT in a trade 36 minutes "rior to ne/s; WA&T >or the ne/s andthen WA&T >or (rice to ,settle do/n- a 2it 2e>ore .ou ta*e a trade? That can2e as little as 5 minutes a>ter the ne/s; or as long as 36? DON'T RS% &T+

9a*eIouts#? 0OST >a*eouts occur 2ecause o> a violation one o> the rules >or entering a

trade? DO NOT M&OLATE T%E ENTR8; T&0E; SessionCurrenc. correlations ORT&0E 9RA0E RLES+

$? &n addition; this is the "ur"ose o> moving the SL to 7E ASA(+ This strateg."rovides /a. more than enough o""ortunities to trade? Avoiding the Loss isas im"ortant as catching the good moves; @ust don't let ,>ear- get to .ou?

3? 9a*eIouts usuall. occur around levels o> resistance; such as the lo/er E0As/hen the. a""ear to 2e counter trend and close to Round Num2ers /here

"rice is slo/ing; so @ust /atch out >or them?? DON'T 9ORCE A TRADE+ Wait >or a "er>ect setu" to enter+5? NEMER ta*e a "rice action 2ar counterItrend 2. itsel>? &t 0ST also meet all

other criteria; such as a""earing at a SR level; a 2ounce o= an 0A or ,roundnum2er; or a""ear A9TER a signicant move a/a. >rom the 56 E0A 35 S0ALines; o>ten the. need another conrming 2ar; or >or the area to 2e "reviousl."roven as an SR level?

Denitions Denitions are used on the charts in discussion o> (rice 0ovement?#? ,#ound Numbers- are the lines o> SR dra/n on the charts at areas o>

signicance such as the ?66 and ?56 levels?

$? ,9ounce- is /here a candle hits and retreats at least # "i" >rom an area o>Su""ort Resistance?#? Almost al/a.s indicates a reversal; even i> it is onl. a >e/ "i"s i> it is also a

,dead end- at a round num2er or a stronger 0A such as the 56 E0A 35S0ALines?

3? ,Dead End- is /here a candle sto"s ,dead- at a level o> Su""ort Resistance/ith no /ic* through it?#? Almost al/a.s indicates a reversal; even i> it is onl. a >e/ "i"s?

? ,Constrainment, is /here (A is limited 2. and res"ecting a "articular levelo> resistance such as one o> the 0As or a ,round num2er- >or more than one2ar; es"eciall. i> there are several smaller 2ars involved? O>ten it is aconJuence o> more than one 0A or 0A round num2er?#? Almost al/a.s indicates a direction o> movement; usuall. a continuation o>

an e:isting Trend O> The 0oment?$? The most "o/er>ul entries are /hen (rice is Constrained in one direction


11/68

a>ter a signicant "eriod o> 2eing ,9lat lined- and the entr. is ta*en o= oneo> the stronger 0As?

5? ,rend- is the URRE!Tdirection o> (rice a2ove or 2elo/ the 56 E0A 35S0ALines and it can change several times in a da.?#? Never violate the Rules o> the Trend OR Counter Trend on Entries+

1? ,Counter rend- is the reversal o> an immediatel. "revious Trend? &t isalmost al/a.s "receded 2. either a >airl. strong move )6 "i"s or moreF

>ollo/ed 2. a "eriod o> ,constrainment- o> "rice at a SR level and then areversal o> "rice /hich ma. also 2e a ,constrainment- o> "rice 2. a one o> thelo/er E0As and a round num2er level in the o""osite direction?#? 0OST ,counter trend- trade setu"s /ill occur A9TER "rice has moved a

>airl. long /a.s >rom the 56 E0A 35 S0ALines; usuall. over )6 "i"s?4? ,ConBuence- is /here more than one SR indicator has merged or met at a

s"ecic "oint on the chart? suall. it is a ,round num2er- and a level o> "riorresistance >rom (A? &t can also 2e /here more than one 0A has ,2unched u"against each other and ma. include a ,round num2er as /ell? These areKREAT Areas to ta*e a ,2ounce- or ,continuation- trades?

)? ,#eest- is /here (rice has alread. moved "ast a SR level and thenretraced to that same level AND is re@ected there?

!? ,Clear 9rea,- is /here (rice ma*es a thrust through a SR level that is,signicant;- usuall. meaning several "i"s?

#6? ,+irst ouch- trades are /here "rice hits either a ,round num2er- levelor an 0A that has held as SR strongl. 2e>ore and .ou trade &00ED&ATEL8 inthe o""osite direction moving to 7E as Buic*l. as "ossi2le to ma:imiHe thetrade? O>ten these trades are good >or Buite a 2it o> "i"s; 2ut @ust as o>tenthe. are onl. good >or a2out #$ to $6 "i"s; so /atch them closel. >or the e:it?#? T%E 7EST ,9&RST TOC%- trades are al/a.s at the 35 S0A and can 2e on

AN8 o> the >our time >rames /e loo* at >or ne tuning our entries? The

higher the time >rame is; the more signicant the ,touch- /ill 2e inindicating a reversal?##? ,+lat Lined- is /hen (rice moves in an e:tremel. narro/ range; usuall.

less than $6 or 36 "i"s u" or do/n total? DO NOT TRADE this area o> chartactivit.? The onl. e:ce"tion to this is i> "rice is /inding around the 56 E0A35 S0ALines in a /ide enough range o> at least 56 "i"s to give .ou ,room->or a trade at the SR levels?

#$? ,/oing Aerage Sou&- or ,/A Sou&"- This is an area /here theE0As are all 2unched u" together; usuall. also ,stuc*- 2et/een or ver. closeto the 56 E0A 35 S0ALines and demonstrate no direction >or a trade? This isa ,STA8 OT- area; do not trade it? O>ten the lo/er E0As get ,stuc*- 2et/een

a stronger 0A and a round num2er level?#3? ,*rice ra&- is /hen "rice is ,stuc*- or ,tra""ed- 2et/een t/o or more

areas o> SR as mar*ed 2. the ,Round Num2ers- or one o> the stronger 0As/ith a level o> SR indicated 2. "rior (A? Normall. ha""ens 2et/een the 35S0A and the 56 E0A on 0#5 or %#? 7rea*outs tend to 2e e:"losive?

#? ,Wic,ed- "ronounced ,/ict-F is an area o> the chart /here (rice 2arshave ,/ic*s- ever./here on 2oth sides and it's starting to loo* li*e a"orcu"ine? DO NOT TRADE T%&S AREA; WA&T >or "rice to settle do/n; or tostart to trend 2e>ore even considering a currenc. li*e this?

#5? ,CO9- is ,Close o> 7ar?-#1? ,Washed Out- A "rior SR level re"resented 2. a 0A or a round

num2er 2ecomes ,/ashed out- and not immediatel. usa2le as SR /hen "ricehas crossed it and reIcrossed it several times in the immediate "ast on thechart? ,Washed Out- SR levels should 2e ignored in this strateg.; 2ut the.2ecome valid again ver.; ver. Buic*l.?


12/68

#4? ,Wic, hrough- is /hen "rice hits a level o> SR and "ushed through it2ut closes on the side o> the original move? The Longer the /ic*; the morecautious .ou should 2e a2out a trade here?

#)? ,Wic, Orom it as inthe case o> a ,"in- 2ar? A ,/ic* o=- is also a ,re@ection- o> "rice at that level o>SR and o>ten indicates either a continuation o> the original ,Trend- or areversal o> it; de"ending on /here this ha""ens?

#!? ,*orcu&ine- is an area o> "rice /here there are lots o> >airl. long /ic*son 2oth sides o> the candles? O>ten the candles have /ic*s on 2oth side o> asingle candle? SA% O( AND DO NO #ADE 1E *O#C(*INE"

$6? ,ri&le o&- or ,Double o&- is /here t/o or more candles hit andsto" at EACTL8 the same "rice "oint on a chart one right a>ter another?,ri&le 9ottoms- and ,Double 9ottoms- are the same? 8ou ma. use thestandard denition as /ell; 2ut >or this strateg.; /e are loo*ing >or immediate"rice action; SO0ET&0ES cou"led /ith "rior (A? These o>ten occur at a Trendo> the 0oment continuation; or a reItest on a reversal?

$#? S$# Leelsare most clearl. visi2le 2. loo*ing at the recent "ast on thechart and using the 2idas* lines to ,see- them more clearl.? 8ou ma. alsoHoom /a. out to see and mar* one or t/o >rom the "ast t/o da.s at thea2solute most? DO NOT clutter u" .our charts /ith lots o> SR Levels+

$$? E=haustion bars and Suat 9arsare ver. small 2ars that are usuall.>ound at the turning "oint in a trend or a s/ing /ithin a trend? suall. the.are ver. >e/ "i"s; "ro2a2l. no more than a2out 5 to #6 total? & also call these,tin. 2ars- in that the. can o>ten 2e even less and loo* e:actl. li*e a ,"in- ora do@i? When there is a cluster o> these ,tin. 2ars- 2eing constrained 2. oneo> the higher 0oving Averages; the 35 56 lines; the. almost al/a.s indicate a>airl. large move in the direction o> the constrainment? The. are ver. solidindicators o> "rice reversals?

&n later sections /e tal* o> (A and ho/ to ta*e advantage o> it on 0#5; es"eciall./ith a 2ounce o= one o> the Round Num2ers and stronger 0As? Standard (A 2arssuch as (in 2ars; Do@is; S"inning To"s; %ammers %anging 0an and Outside 7ars/or* @ust ne on 0#5; @ust don't hang .our hat com"letel. on them alone? Theremust 2e conrmation o> some sort >or each (A 2ar used? The Trend O> The 0omentas dened 2. the 0oving Averages and "rior (A "rovide that conrmation?

Additional #esources:

&> .ou a2solutel. must read more; here are some great threads on 9ore:9actor.?com?

ames#1 (rice Action Thread? huge threadFhtt"///?>ore:>actor.?comsho/thread?"h"PtQ$33#

ac*o's 9ore: %ouse o> (leasure and (ain trend trading; also a huge threadFhtt"///?>ore:>actor.?comsho/thread?"h"PtQ$4$)1

No 7rainer Trades su""ort and resistance tradingFhtt"///?>ore:>actor.?comsho/thread?"h"PtQ)1$!

Trade What 8ou See; Not What 8ou E:"ect the. ma*e huge "i"s here; 2ut a 2itcom"licated >or m. taste?F htt"///?>ore:>actor.?comsho/thread?"h"PtQ#$#41#

There are more; 2ut /h. con>use .oursel> /ith them /hen the sim"lest strategiesare al/a.s the 2estP These resources should 2e all .ou need?
http://www.forexfactory.com/showthread.php?t=2331http://www.forexfactory.com/showthread.php?t=27286http://www.forexfactory.com/showthread.php?t=86429http://www.forexfactory.com/showthread.php?t=121761http://www.forexfactory.com/showthread.php?t=2331http://www.forexfactory.com/showthread.php?t=27286http://www.forexfactory.com/showthread.php?t=86429http://www.forexfactory.com/showthread.php?t=121761


13/68

8ou ma. also read m. original thread at 9ore:9actor.; and & a"ologiHe in advance >orthe /a. it ended /ith >alse accusations >rom a 2unch o> neanderthals and an idiotsite admin /ho never chec*ed out an. in>ormation; @ust /ent along /ith his croniesaccusing me o> 2eing someone &'m not?

This manual and the 2asic strateg. is >ree >or all to use and change; ada"t or modi>.

as the. see t to hel" them master their trading? No mone. is or has ever 2eenas*ed >or it; e:ce"t 2. some >raudster on E2a. >rom an eastern Euro"ean countr.?

The strateg. is and al/a.s has 2een and al/a.s /ill 2e 9REE to all?

he Sim&li?ed #ules

Sim&li?ed #ules:

This strateg. is e:tremel. sim"le? EE( &T S&0(LE +++ This strateg. is NOTcom"licated; DO NOT com"licate it? The 2asic rules are sim"le? DO NOT com"licate

them either?

#? Chart is 0#5 ONL8 >or all decisions? T%E ONL8 e:ce"tion is the ,touch- tradeson D# and %# /hen the. ha""en++#? 05; %# and % are >or clarifcationo> overall trend and rening entries and

e:its? NOT trade determination E"E#T $%en price is a&out to 'touc%(t%e )* +MAon one o> them? 05 is not "art o> the setu"?

$? Trading Time is a session ,overla"- "eriod o> t/o mar*ets one o> /hich coversat least one countr. o> the currenc. "airs .ou have chosen to trade?

3? Entries are ALWA%Sat either a SR level re"resented 2. one o> the RoundNum2ers; a re@ection o= one o> the 0oving Averages or a round num2er

ta*en at the ,Touch- onl.F ANDa (rice Action 7ar O#constrainment in theseareas /ith several smaller 2ars?#? ,ConJuence- o> multi"le 0As or 0As and SR levels are ver. strong entr.

"oints?$? Entries can 2e either on a ,Touch- &9 that ,touch- is a ,Touch- /ith a stee"

angle; or a series o> small 2ars ,constrained- 2. the resistance o> one o>the Round Num2ers; 56 E0A 35 S0Astronger 0As; or a reItest o> the3556 lines or #6 E0A on a reversal or continuation entr.?#? TWO BAR RULE>or ,Touch Trades- o= the 0#5 #6 E0A; is this? &t is a

,retrace- trade and normall. the E0A is at a ,ver. stee"- angle o> a2out36 to 5 degrees or more AND ta*es no more than TWO large 2ars to,get there- to ,touch- the #6 0AF and the trade is almost a verticalretrace or .ou should "ass on the trade and /ait >or (A to reveal /here(rice is reall. going? The SL is a2out #$ "i"s?

$? ,Touch Trades- on 0#5 o= the 35 S0A and 56 E0A are also ver. eas. tosee 2ut 0ST 2e ta*en ONL8 i> the E0A is at a reasona2l. stee" angle;sa. a2out $6 Degrees or more as sho/n later in this manual AND (R&CE0ST have moved at least #5 "i"s 2e>ore the retrace ,Touch- occurs?suall. three are no more than three 2ars ,to get there?- (ass on trades/ith lots o> ,smaller- 2ars to ,get there?-

3? Constrainment trades are al/a.s good on either time >rame 2ut the

%igher Time 9rames are e:tremel. "o/er>ul?? /a=imumo> ve success>ul trades "er session or three losing trades "er

session or t/o in a ro/? T%EN STO( and get a >resh "ers"ective+ DO NOTtrade /ithin the ne:t hour at least; 2est to sto" >or the da.? NO


14/68

E6CE*IONS+++5? SL is nevermore than #! "i"s and o>ten Buite a 2it less /ith e:"erience; i>

.ou have entered "ro"erl.?1? 0ove to 7E # as soon as "ractical /ithout cho*ing out the trade 2ut

denitel. a>ter the rst T( is hit >or #5 "i"s?#? To allo/ trades to ,run- move the SL to the last candle's e:treme S"read

and #"i" NO 0ORE +

4? The E&T is governed 2. (rice; SR levels and the Round Num2erse=clusiel0? &> "rice ,2lo/s through- the ne:t Level; stic* /ith the trade andmove u" .our SL; leaving some 2reathing room?#? &> "rice 2egins to hesitate at a round num2er or close to one; ma*e sure

.ou are at least at 7E and decide /hether /ait it out and "ossi2l. get le>t/ith onl. one "i"; or ta*e /hat .ou have and loo* >or another trade+

$? &> it has ,2lo/n throughAND CLOSED"ast a round num2er; move .our SLto NO 0ORE than S"read #"i" short o> the last round num2er or 2ar that/ent through it and /ait?

3? &> (rice starts to reverse /ith a (A 2ar; get out and /ait >or an entr.?? Long 2ars 36 "i"s or moreF o>ten retrace Buite a 2it? Consider ta*ing .our

"i"s i> a large 2ar hesitates; ES(EC&ALL8 at an SR Level?." Learn to trail 0our sto&s!

)? Trade ONL8 W&T% T%E TREND unless .ou have alread. mastered these2asics++#? Counter Trend trading is >or ONL8 e:"erienced traders /ho have mastered

the 2asics alread.?!? Never trade the ,"orcu"ine- Jatlined areas o> "rice action or ,0A Sou"- ++#6? Do not trade Ne/s+

&> .ou com"licate it more than this; it /ill ta*e .ou >ar longer to master this strateg.?

Once .ou have read this manual; and mastered these 2asic rules on this "age; then.ou can move on to more aggressive entries such as trading during ,cho"".-mar*ets as long as .ou do not trade the ,"orcu"ine- it $ill *ill .our account?

THE CARDINAL RULE:

DO NOT ENTER NLESS T%E CANDLE &STOC%&NK A L&NE+ T%&S ASSRES T%E LOWESTR&S (OSS&7LE ON T%E TRADE AND T%E &CEST

0OME TO 7E W&T% (RO9&TS+

A word about 2Batlined; areas"

There are some /ho tal*ed a2out ,Jatlined- areas as "resenting good tradingo""ortunities as "rice esta2lishes a ,channel- o> sorts /ith a high a2ove and a lo/2elo/ the 3556 lines? While this does ha""en; and in other strategies /here 2rea*outs are used; it /ould 2e a great "lace to loo* >or 2rea*outs; The Dance DOES NOTuse 2rea*outs and tr.ing to use them /hen .ou are starting out /ill onl. con>use.ou? Leave them alone until .ou have lots and lots o> e:"erience? The. reBuire0C% larger SL settings than The Dance uses?

(sing *rice Action


15/68

(rice Action is used in t/o /a.s in this strateg.? 9irst are the normal (A 2arsdescri2ed immediatel. 2elo/; /hich can 2e used on an. time >rame; 2ut here /eare interested onl. in the 0#5 charts?

(rice action is the most relia2le o> all indicators in determining momentum anddirection in trading? (rice action can indicate relia2l. "rice reversals and

continuations? All other indicators are 2ased on "rice action in some >orm? &n thisstrateg. /e /ill 2e loo*ing "rimaril. at a >e/ standard (rice Action setu"s to assistus in ltering the moves /e ta*e? ust *ee" in mind that on 0#5 (A though ver.strong; can turn literall. on a dime and give .ou change?

The rst 2ars /e loo* >or are (in 7ars and Do@i 7ars; that are accordin to ourde-nition; then &nside 7ars; and Outside 7ars; in that order; 2. the /a.? These arethe "rimar. indicators /e /ill 2e loo*ing >or to determine most entries? LOO 9OR

T%E (A+ The 0oving Averages are >or determining i> the (A is valid >or a trade?8ou must have 7oth (A in the right direction o> the trend and a 2ounce orconstrainment >or a trade to 2e valid+

OUR .E/0!0T0O! O/ #0! BAR+

(in 7ars and Do@i 7ars are Candlestic* 2ars /hose ,2od.- is both inside andsmaller than the bod0 o the &receding barand have a longer ,u""er /ic*-than ,lo/er /ic*?- O>ten these 2ars are ver. small? &n addition; it has an area /ith,room- around it on all sides; meaning that there is lots o> em"t. chart s"aceimmediatel. to the ,"ast- o> the 2ar?

Loo* at the "receding charts as /ell as the ones that >ollo/ and .ou can see lots o>

them at the turning "oints? 7E ETRE0EL8 CARE9L o> trades using ,"in 2ars- thatare not e:actl. "er this denition here?

The >ollo/ing are images o> some o> the more common versions o> (rice Action asthe. a""ear in real charts?

*in 9ars:

These are 2ars ver. similar to the Do@i; e:ce"t that the o"en and close are atdi=erent "rices? The correct (in 7ar >or our "ur"oses is one where the bod0 othe *in is inside the bod0 o the &reious baras seen 2elo/?

0ost o>ten the 2est trades have the 2od. o> the signal (in 7ar closer to the to" o>the "revious 2ar as seen here 2elo/ and are >airl. short candles over all? O>tenthe. are less than #6 "i"s?

The last image is included to demonstrate that (in 2ars ma. come in multi"les? 7esure that /hen entering on a (in 2ar that it agrees /ith the Trend or a 2ounce indirection o> the trend? One could have entered on either o> the t/o do/n/ard"ointing red "in 2ars in the last image? O>ten these t."es o> (rice Action occur at or


16/68

ver.; ver. close to one o> the ,Round Num2ers- and the larger 0oving Averages?

Doi *rice Action 9ars

Do@i 7ars also have the >eature o> not reall. having a ,2od.- 2ecause the o"en andclose o> the ,7ar- ha""ens at the e:act same "rice level? The >ollo/ing are "ictureso> some ,(in 7ars- according to our denition o> them? The second 2ar is the Do@i?

suall. (rice continues the o""osite direction o> the Do@i? Some sa. .ou should ta*ea Do@i entr. at the to" /ithout Buestion; 2ut /ait >or conrmation o> the second 2arclosing at the 2ottom? This strateg. agrees /ith that statement? Wait on 2ottomDo@i 2ars >or conrmation 2ars?

Inside 9ars:

&nside 2ars are o>ten re>erred to as ,sBuat- 2ars? The. al/a.s are contained /ithinthe 2od. o> the "revious 2ar? The second or third 2ar is the &nside 7ar or &7?

Outside 9ars:

These are 2ars that com"letel. engul> the "revious 2ar? The second or third 2ar isthe Outside 7ar; or O7? &t should 2e o2vious?

(rice Action 7ars are NEMER used alone to enter a trade unless .ou have lots o>e:"erience /ith this strateg.? The. 0ST 2e conrmed 2. either resistance levelsat a ,Round Num2er;- 2. resistance as seen 2. "rior (A; a moving average; or 2.additional candles in the ,right- direction?

Double o&s and Double 9ottoms:

The terms ,dou2le to"- and ,dou2le 2ottom- has a ver. di=erent meaning in this

strateg.? 8ou can still loo* >or the ,normal- dou2le to"s and 2ottoms /here "ricehas moved to/ard and a/a. >orm an area o> su""ort and resistance over a "eriodo> several 2ars; 2ut >or our "ur"oses in this strateg. /e /ill >urther dene it as t/o2ars /hich have e=actl0 the sameto" or 2ottom? &> the 2ars are also the same


17/68

length; it can dene an entr. "oint or an e:it "oint de"ending on it's location on thechart? 7oth 2ars 0ST have the same EACT to" or 2ottom; 2ut the can 2edi=erent in ho/ the. achieve that?

9or e:am"le; in the images 2elo/ .ou /ill see some that are 2oth /ic*ed to"s or2ottoms; some that are 2oth 2od. to"s or 2ottoms and some that are one o> a 2od.and one o> a /ic*? &t is the >act that the. are EACTL8 the same "rice "oint that

tends to indicate the reversal o> "rice?

0a*e sure the signal also agrees /ith the trend and /ith the 0oving averages toachieve the 2est results?

The >ollo/ing are dou2le to" and dou2le 2ottoms signals? See i> .ou can nd theone not mar*ed?

Dou2le to" and dou2le 2ottom 2ar sets almost al/a.s signal either an entr. or ane:it "oint? As long as .ou are >ollo/ing the rules o> trading W&T% the trend o> themoment; and the Rules o> the moving averages .ou should 2e ne? Still; this doesta*e some "ractice to master?

DO NO AE A DO(9LE O*$9OO/ SI7NAL 1A CON#ADICS 1E#END O+ 1E /O/EN!!!!!!!

*rice Constrainment:

&n our strateg.; /e also use ,(rice Constrainment- trades 2ased on (rice Action/here (rice is ,constrained- 2. a Su""ortResistance level? These ,levels- can 2eeither a 0oving Average; a classical horiHontal line o> SR; or and this is thestronger o> themF an area /here (rice is ,constrained 2. one o> the stronger movingaverages; such as the 35 S0A or the 56 E0A? This also /or*s /ith the ,Round


18/68

Num2ers- levels ver. /ell and o>ten indicates either a strong continuation trade; oran u"coming reversal signal?

The >ollo/ing images are /here "rice is Constrained 2. either the 5; #6 or 56 E0As?(a. s"ecicattention to those areas in the images /here the 0oving Average constrainment isalso accom"anied 2.

Round Num2er constrainment? Those areas o> ,constrainment conJuence- andthose around the 56 E0A are the strongest entries in the /hole strateg. /e usehere and the easiest tosee?

Loo*ing >or ,e:haustion 2ars- at areas o> ,constrainment is an e:tremel. strongentr. tactic? &t allo/s>or an entr. /ith an e:tremel. small Sto" Loss; o>ten less than ) or ! "i"s; and also

indicates a strongmove in the direction o> the constrainment that; as .ou can see is o>ten good >or $6or more "i"s on themove? & am sure .ou can see @ust ho/ "o/er>ul this ,constrainment- t."e o> entr.is? The a2ove images sho/ some trades /here there /ere several o> the ver.small ,e:haustion- 2ars and an. o> them /ould have 2een a good entr. "oint?

Additionall.; o>ten the candle /ill ,/ic* o=- o> a ,round num2er- and the 2od. /ill2e constrained 2. the 0oving Average? Sometimes "rice /ill also ,/ic* o=- o> ahigher 0A and the 2od. 2e constrained 2. a lo/er 0A? &n 2oth cases T%AT &S

CON9&R0AT&ON &N ONE 7AR o> the momentum o> the trade as a continuation trade?&n some instances it also indicates a reversal area to /atch >or an entr.? &n theseareas there /ill 2e times; as .ou get more e:"erienced /ith this strateg. and usingthe 0oving Averages /ith the Round Num2ers; /here .ou /ill 2e a2le to enter onthe ,touch- o> a level or a 0oving average; >urther increasing the value o> the trade?


19/68

That; ho/ever ta*es a 2it o> e:"erience? At rst; .ou should concentrate ONL8 on,seeing- the tradesthat are ,constrained- in a "articular direction 2. a CON9LENCE o> the 0ovingAverages and theLevels as the. are the strongest?

O>ten (A li*e sho/n in this section is used more >or nding e:it "oints than entriesin this strateg.; es"eciall. i> the. ha""en at or ver. close to a Round Num2er? 9orthe most "art; stic* to ,Constrainment- and ,Touch Traces;- .ou'll have a lot moresuccess?

NOE: All good constrainment trades hae /O#E than two and oten morethan three er0 small bars in the beginning o them! Loo, at the Si=th8Eighth and Ninth images in the image series aboe or both /A reall0strong 2lower /A; constrainment trade entries" he others o< the .4 arestronger8 but sometimes a little more diFcult to see or a beginner"2O(C1 #ADES; are ONL% ta,en i the0 ha&&en with NO /O#E than twobars to 2get there";

Chart Setu&:

&n this strateg. there is onl. ONE chart setu"? Three 0oving averages; a 2ar cloc*/ith s"read; a cloc* to indicate mar*et times and a ,Round Num2ers- indicator?

There are three time >rames used >or each currenc.; t/o o> them used onl. >orconrmation o> Trend and the other >or ne tuning entries? The 0oving Averages are

>or trend determination; as /ell as to indicate a Joating level o> Su""ort andResistance? The Round Num2ers indicator "laces light lines on the chart to sho/areas o> "s.chological im"ortance >or most traders and the Candle Timer is to hel".ou in "in"ointing the close o> candles >or entries? The #6 E0A; the 35 S0A and 56E0A are use as Joating Su""ort and Resistance Levels and to sho/ areas o>,Constrainment;- ,ConJuence- "oints >or SR and Trend o> the 0oment >ordetermining entries and e:its?? The 56 E0A dictates /hether .ou /ill 2e loo*ing >orlong or short trades?

Adding an. more to the charts /ill onl. serve to com"licate the issue and o"en thedoor to con>usion and additional o""ortunities >or mista*es?

7elo/ is an image o> the K2"sd chart and one >rom the Eur". >rom a normalda.'s trading? 8ou can see that it Buite literall. is at the end o> the chart; not cherr."ic*ed?


20/68

Notice ho/ (rice res"ects the round num2er levels as /ell as the stronger E0As onthe chartP &t is es"eciall. a""arent on the Eur". chart a2ove? 0ost o> the time;/hen .ou see a reversal; it ha""ened at the 56 E0A; a conJuence o> 0ovingAverages or at one o> the round num2er levels? The chart a2ove is clear evidence o>that?

This /or*s on all time >rames on all currencies; 2ut >or our "ur"oses though; /e /ill

2e re>erring e:clusivel. to the 0#5 charts; these 0oving Averages; and the ,RoundNum2er Levels?-


21/68

As .ou can see; /ith this strateg. there are lots o> o""ortunities to trade and totrade success>ull.?

Tem"late sed &n this strateg. includes tem"late titled ,The Dance?- Thro/ it on achart and have >un? &t reall. &S T%AT S&0(LE? EE( &T T%AT WA8+

Don't go getting >anc. /ith AN8 other indicators; the. @ust com"licate things? &> .ou/ant to dra/ the "revious da.'s high resistance o> lo/ su""ort that's ne; @ust don't

clutter u" the charts+ 7T ES(EC&ALL8 AMO&D OSC&LLATORS; the /ill lie to .ou/aaaaaaa. to o>ten?

&ndicators sed #6 E0A; 35 S0A; 56 E0A 0oving Averages; Round Num2ers 7eige;Candle Time S"read; Cloc* and NOT%&NK 0ORE+

DO NOT SE OSC&LLATORS; the. /ill onl. con>use .ou and cloud the (rice Actionsignals given+

a,ing he rade!

0#5 is not onl. a great chart to trade on; it's a >a2ulous teacher? &> .ou miss atrade; 2e "atient and .ou /ill get another shot in a little /hile+ & have "ersonall.had da.s /ith several "otential trades; /atching onl. a cou"le o> currencies?

The >ollo/ing 0#5 chart illustrates that e:act "oint ver. /ell? The areas circledindicate "otential trades over a t/o da. "eriod? Notice that trades around the 56E0A 35 S0A Lines are "articularl. strong trades /hen the. also are used W&T% thetrend; /ith constrainment or (A 2ars+

Ever. area circled in the chart a2ove indicates a "er>ect ,2. the rules- "otentialentr.? Thro/ the tem"late on a chart and scroll 2ac*? &t should 2e as "lain as thenose on .our >ace ho/ this strateg. /or*s? EE( &T T%&S S&0(LE; or don't trade+


22/68

Once .ou enter; move to 7E as soon as "ossi2le /ithout *illing the trade? &t /ill ta*esome time and /or* to get good at this; 2ut it's 2etter to lose some at the2eginning at 7E # than to ta*e lots o> losses? &9 .ou do ta*e losses; Not even oneo> them should 2e more than ## or so "i"s; EMER+

sing (rice Action; the 56 0A 35 S0A Lines; the 5#6 E0As and the Round Num2erlevels to ta*e ,2ounce- trades against is an e:tremel. a/esome strateg. /ith lots

o> o""ortunities >or trading; as .ou can see?

9inding entries on those da.s /hen "rice does /hat & call a ,slo/ 2urn- in a ver.;ver. slo/ trending movement can 2e challenging to sa. the least? On those da.s;this strateg. hel"s a lot? Loo* >or high "ercentage entries against the strongerE0As and then @ust stic* /ith it as long as it does not reverse? %ere are some trade"otentials circled on an Eur". chart >rom the recent "ast?

Notice that as .ou gain e:"erience; .ou /ill 2e a2le to ta*e some ,rst touch-entries o= the 56+

he Constrainment rade

The Constrainment Trade can ha""en against an. o> the three 0oving Averages inthis Strateg.? T%E STRONKEST o> them are al/a.s ta*en against the 35 S0A /henit and the 56 E0A are literall. ,on to"- o> each other and the #6 is on the side the.are '2ending' to/ard? suall. (rice /ill sort o> ,2ounce along- the 35 >or several2ars; at least three 2e>ore .ou ta*e the trade? &t can ha""en against the #6 E0A as

/ell 2ut these trades are a little ,/ea*er- and .ou need to *ee" an e.e on themuntil .ou get some "i"s loc*ed in >rom one?

Constrainment trades o>ten .ield 36 to #66 "i"s or more; so 2e sure not to cho*e it


23/68

out earl.? 7elo/ are some images ta*en >rom random areas o> recent chart activit.?&> .ou scroll 2ac* .ou /ill see lots and lots o> e:am"les o> this sort o> constrainment/here entries /ere not onl. "ossi2le; 2ut /here the trades also .ielded large gains?

he AAA 2ouch; rade Entr0

,Touch Trades- are almost as strong as the ,Constrainment- entries? The. are a 2itharder to ,catch- as the. can ha""en e:tremel. Buic*l. 2ut the gains are normall.reall. good and ha""en reall. >ast? Remem2er in ,Touch Trades- to "a. STR&CTattention to the TWO 7AR RLE? &> .ou don't; .ou'll get 2it /a. more o>ten that is

necessar.? Also remem2er that on ,Touch- trades the SL is NEMER more than ##"i"s?

%ere are the criteria >or strong ,touch- trades?

-4 E/A 2ouch rades; on /-. Charts:


24/68

#? 0ust 2e at a ,ver. stee"- angle o> a2out 5 degrees; or more? Less o> anangle /ea*ens the trade?

$? NO 0ORE than t/o 2ars to ,get there?-

3? Sto" loss is NO 0ORE than #$ "i"s EMER?

? ConJuence o> an %# 0A strengthens the signal?

5.$ .4 Line 2ouch rades; on /-. Charts:

#? A reasona2l. stee" angle o> a2out $6 degrees or more; OR 2oth lines ,on to"-o> each other? %aving 2oth ha""en is ver. strong?

5? Sto" loss is NO 0ORE than #$ "i"s EMER?

1? ConJuence o> an %# 0A strengthens the signal?

7elo/ are some e:am"les o> the ,Touch Trade- entries? This one is o= the 3556

lines /hen ,on to"- o> each other?

This one is o= the #6 E0A /hen at a stee" angle? &t a""ro:imates a 5 degreeangle and & use the ,rectangle tool- o> 0T to create the ,2o:?-


25/68

sing the ,Angle Tool- in 0T >or ,Touch Trades?-

&n the ,line studies- menu o> 0T there is a ,trendline 2. angle- tool that can 2eaccesses as seen 2elo/?

When used on the charts; it creates a trendline /ith an area /here .ou can see the,angle- o> the line li*e seen 2elo/?


26/68

8ou sim"l. select the tool; then clic* the chart at the "oint /here .ou /ant to startto measure the angle then drag it across the chart >or a little 2it so the lines and theangle a""ear? &> it is an u"/ard move; the angle /ill a""ear in a normal /a. 2ut i> itis a do/n/ard move; then .ou have to do a little mental math to get the angle?

&n the e:am"le a2ove; the angle on the chart is 3##?4 degrees? Remem2ering thereare 316 degrees in a circle; /e then su2tract this num2er >rom 316 to nd that /ehave an angle o> )?3 degrees? This means that a ,Touch- o> the 35 at this "oint ismore than li*el. a good short entr. as a ,touch trade?-

8ou /ould do "recisel. the same >or the 56 E0A and the #6 E0A? ee" in mind the

/hole "oint is to ,measure- the "otential strength o> a 2ounce >rom a ,touch- andnothing more? ee" it sim"le? The shar"er the angle; the stronger the trade? nder$6 degrees angle; & /ould "ro2a2l. "ass on a #6 E0A Touch; and under #5 degreeson a 3556 trade?

Once .ou let go o> it it should sta. highlighted so .ou can hit the ,delete- 2utton onthe *e. 2oars and get rid o> it? Once .ou have measured the angle; .ou don't needit an.more cluttering u" .our charts?

NOW; measure the line W1E#E I IS; not >rom /here the move started or .ou /illget a >alse reading on it's angle? &> it has started to ,Jatten- out a 2it; then measure>rom the last >e/ 2ars /here the ,Jattening- 2egan?

Ne:t let me sho/ .ou ho/ to ,customiHe- .our tool 2ar to .ou don't have to ,hunt->or it /hen .ou need it?


27/68

Setting u& the oolbar:

Right clic* on the tool 2ar and the menu to modi>. it a""ears? As seen here?

Select ,CustomiHe- >rom the list and this ne:t /indo/ a""ears?

%ighlight the ,Trendline 2. Angle- selection then /hen .ou clic* the ,&nsert- 2uttonit /ill move it to the right side o> the list? At that "oint .ou can use the ,u"- o>,Do/n- 2uttons to "lace it /here .ou /ant it in the list so it /ill sho/ u" in the tool2ar >or eas. access as seen 2elo/?

1ow o Let he /ar,et 2Show It's 1and;

0ost /ho have traded even a little 2it or researched a little 2it have heard the term?,let the mar*et sho/ it's hand?- The su""osition is that once that has ha""ened;.ou can ta*e a sa>e trade /ith this ne/ in>ormation? & struggled >or a long timetr.ing to gure out @ust ho/ this ha""ens and /hat it means?


28/68

&t's reall. "rett. sim"le? (rice Action is the 2est ,indicator- o> the direction themar*et /ill move? The "revious section descri2es some; 2ut 2. no means all o> the/a.s that (rice Action can 2e used to /atch as the mar*et ,sho/s it's hand- so .oucan trade sa>el.? Even /ith this arsenal o> tools; sometimes; the mar*et /ill ,sho/it's hand- then @ust go the other /a.? &t can 2e ver.; ver. schiHo"hrenic at times?

Still; 2. using "rice action .ou can mitigate .our ris* on the entr. e:tremel. /ell?There are sections later that e:"and on this to a great degree; even an additional"art o> this manual that is a2out the ,Three 0ain Trades- o> the Dance Strateg.?

%ere is a short version o> all this?

A (in 7ar; at the to" or 2ottom o> a ver. long run o> "rice movement is a good /a.the mar*et ,sho/s it's hand- that "rice has e:hausted itsel>? O>ten it is also"receded 2. "rogressivel. smaller 2ars in the direction o> the movement? &> "rice isalso a""roaching a SR level o> a Round Num2er; or a "lace /here (rice reversed inthe o""osite direction "reviousl.; or one o> the 0oving Averages used here; thosethings ALL can 2e used to determine i> the mar*et is trul. ,sho/ing it's hand- to thetrader /ho is attentive?

When "rice is constrained 2. one or another 0oving Average; Round Num2er; SRlevel or a conJuence o> an. o> these; that is also ho/ the 0ar*et ,sho/s it's hand-to the trader?

Let's ta*e an e:am"le? Let's sa. that "rice has @ust dro""ed 56 "i"s going short andthen retraces a small amount; sa. $5 "i"s and in the Dro" crossed the 3556 lines>airl. shar"l.? 8ou might not have had an. /arning and might have missed theentire move? NOW though; "rice is in a retrace and heads 2ac* to the 3556 area? &>it hits and starts to sort o> ,2ounce along- one o> these t/o main averages; that isconstrainment and the mar*et demonstrating a resistance to going u" an. >urther?

T%&S &S ALL T%E CON9&R0AT&ON 8O NEED at this "oint?

A>ter a cou"le to ma.2e 3 or 2ars li*e this; i> .ou have not alread. ta*en a trade2ac* in the original direction o> the movement o> (rice; short i> it /as short; long i>it /as longF then .ou have "ro2a2l. alread. missed the 2est entr. "oint? Themar*et's ina2ilit. to cross 2ac* through a Su""ort or Resistance Level; /hateverthat ma. 2e; is the mar*et ,sho/ing it's hand?- &> .ou /ait to long; it /ill more thanli*el.; suddenl. move #6 to $6 "i"s the /a. it /as sho/ing it's move /ould 2e; and.ou have missed the trade's 2est entr. i> .ou are not alread. in the trade?

The ,Touch- trades descri2ed in this strateg. are much the same? The mar*et o>ten/ill ,hit- or ,touch- a signicant SR level and then literall. ,RN- a/a. >rom it asmuch as $6 to 56 "i"s in one or t/o 2ars? &> .ou are not e:"ecting that to ha""en;

.ou /ill miss it ever. time until .ou learn to trust it and use ver. short sto" lossesto ta*e advantage o> it?

Learn the (rice Action 2ars in this strateg.? Learn the "o/er o> the 3556 lines; theRound Num2ers and learn the "o/er o> more traditional SR "atterns as /ell?

Things li*e dou2le and tri"le tests; o>ten called ,dou2le to"s 2ottoms- or tri"leto"s 2ottoms- at an area o> SR can 2e e:tremel. "o/er>ul and o>ten allo/ .ou tota*e 2asicall. the e:act same trade a cou"le o> times in a session >or good "i"gains?

The value o> learning ho/ "rice moves around the 0oving Averages; RoundNum2ers and traditional SR levels cannot 2e e:aggerated? The more .ou can ,see-them; trust /hat the mar*et is telling .ou through them; the more success>ul andthe /ealthier .ou /ill 2ecome in trading?

&n the rest o> this manual /e discuss the three main t."es o> trades; /e


29/68

demonstrate /hat the. loo* li*e in ,real time- through the use o> Screen ca"tures atthe "oint o> the trade and @ust a>ter at either the move to 7E; or the e:it >rom thetrade?

SE T%E S&0LATOR A LOT and "a. attention to the e:am"les given and .ou /ill doreall. /ell? 8ou ma. even sur"rise .oursel> and master this strateg. a lot >asterthan .ou thin*?

*utting It All ogether:

Screen ,Setu"- or ,real estate- is ver. im"ortant in trading? One must 2e a2le to,see at a glance- /hether or not a trade is imminent or not and the direction it mostli*el. /ill go? 0ost com"uter screens are not large enough; and most s.stems tonot allo/ >or multi"le monitors to allo/ one to see the charts in the 2est "ossi2le>ashion?

This manual /as created using a #4 inch monitor; /hich is "rett. standard intoda.'s /orld? Still; that is "rett. small /hen .ou need to ,see- several charts at atime? The ans/er to this dilemma is to ,stac*- the chart /indo/s?

The >ollo/ing is a screen shot o> our setu" on 0etatrader? 8ou /ill notice that & onl.monitor three or >our currencies at the moment? With a larger screen & /ould"ro2a2l. monitor more; 2ut & /ant to see CLEARL8 the setu"s?

%OWEMER; it is "ossi2le to trade onl. ONE currenc. and ma*e great "rots and2ecome e:tremel. success>ul? Never underestimate the "o/er o> sim"licit. in thisarea as /ell+ Learning the ,"ersonalit.- o> a currenc. is amaHingl. "o/er>ul as /ell?

8ou /ill notice that this setu" leaves room >or access to the ,Scri"ts- area o>0etatrader? & have discovered that using Scri"ts to trade /ith is much >aster; moreJe:i2le; and in short a lot easier to do?


30/68

Entering a trade is as sim"le as dragging the a""ro"riate scri"t 2u. or sellF to thechart .ou /ant to e:ecute an order on and letting it dro"? The e:ecution should 2ea LOT >aster than using the normal 0T Order inter>ace? 8ou could also @ust clic* onthe chart .ou /ant to e:ecute on then dou2le clic* the scri"t .ou /ant to e:ecute?

That /or*s even >aster?

The Scri"ts >or 7u. and Sell orders; have "reset SL and T( levels? These scri"tsaccess a glo2al varia2le "reviousl. set 2. the AUSetLotSiHe scri"t? & suggest setting.our traderis* once "er session at the 2eginning? That /ill automaticall.increment .our trades >or a 2it more aggressive com"ounding /ithout running theris*s o> ,instant com"ounding- /hile trading?

There are other scri"ts >or moving 2oth 2. sim"l. dragging the a""ro"riate Scri"t tothe a""ro"riate chart and dro""ing it?

The SL or T( scri"ts /ill move .our SL or T( to the e:act s"ot on the chart /here.ou dro" it?

There is even a 7E Scri"t >or moving to 7rea* Even to mitigate Ris* in a trade? Wetal* a2out the Scri"ts later?

#e?ning the Entr0

sing three charts on di=ering time >rames >or a single currenc. is nothing ne/?0an. do it? The di=erence /ith this Strateg. is that /e do NOT change to di=erent0oving Averages on the various time >rame charts? Once .ou get used to seeing

the (A around the averages; it @ust doesn't ma*e much sense to me to changethem? &n addition; the 35 S0A is ver. strong on all the charts+

7elo/ are is an image >rom one o> m. trades? & have mar*ed the SA0E time on t/oo> the charts in the grou"? One on 0#5; the larger chart; and one on 05; the smallerle>t side chart? Remem2er; the reason >or three charts is so .ou can see the overallrecent trend on %#; start to choose .our entr. on 0#5; then rene it on 05 >or the2est "ossi2le entr. and e:it? & don't use 05 much an.more 2ut this sho/s the"rinci"le reall. /ell?

Notice that on 7OT% o> the lo/er time >rame charts "rice /as 2eing ,constrained-2. the SA0E E0As? On 0#5; there /as a three 2ar area /here a good entr. could

have 2een made; 2ut on 05 the same area /as several more 2ars? This all is @ustadded conrmation o> the trade and should give .ou more condence >or an entr.?

%o/ever; once in the trade; it's 2est to manage it on 0#5 trailing .our sto" loss on0#5 2ars as it eliminates the ,cho"- that sha*e "eo"le out o> other/ise strongtrades? &> .ou had trailed the SL on 05; .ou /ould have 2een sha*en out a cou"le o>times? Stic* to trailing the SL on 0#5; it /ill greatl. increase .our gains overall?

This trade /as ultimatel. good >or a2out 6 "i"s?


31/68

This ne:t image sho/s the same "rinci"le /ithout the use o> the 05 chart? Thetrade /as ta*en at the immediate %# ,Touch- o> the 35 and gave u" a2out 6 "i"sas /ell and .ou can see on 0#5 /here it hit resistance?


32/68

A Word About Wic,s

Wic*s on candles are used lots o> /a.s in all sorts o> Strategies? &n ,The Dance- /euse them onl. >or immediate SR levels >rom the immediate "ast t/o or three da.s?Longer than that @ust messes u" the charts? sing /ic*s to set 2oth e:it levels andentr. levels can 2e "rett. "o/er>ul? ust don't get too carried a/a. /ith them and*ee" them sim"le and .our charts clean or it gets con>using?

&> there are lots o> /ic*s on 0#5; use the %# chart >or the levels .ou need? &> %# istoo ,cho"".- /ith too man. /ic*s; use D#? & seriousl. dou2t D# /ill ever have ,tooman.- to mess /ith .ou?

7elo/ is a chart that sho/s /hat & am tal*ing a2out? There is one >rom 0#5; then &Hoomed 0#5 out to and %# chart to nd a cou"le more levels; and mar*ed them2oth on %# and 0#5 to ma*e them more a""arent to .ou; and even one on D# @ust>or em"hasis? Trade these li*e a ,normal- SR Level; /hen the. ,get there- ta*e the

trade and give it no more than a #! "i" SL? &9 the. stall /ithin a cou"le o> "i"s; ta*ethem and /ait /ith .our SL li*e .ou /ould normall. use it?

& don't recommend trading ,cho"- 2ut as in the chart 2elo/ /here there are clearSR levels; MER8 close to the Round Num2ers areas it can 2e acce"ta2le to ta*e thereverse trade ,as i>- it touched on a second candle? ust 2e sure .ou use a longenough Sto" Loss so .ou don't get ta*en out in the entr. candle?

En@o.+


33/68

Sta0 O(!

As /ith all strategies; there are areas to avoid at all costs? As sim"le as this ma.sound; it /ill vastl. increase .our "rota2ilit. and success rate?

#? NEMER TRADE a "rice action 2ar 2. itsel>+ There 0ST 2e some sort o> otherreason >or the trade such as the 2ar occurring at a Su""ort or ResistanceLevel; a ,Round Num2er;- as a 2ounce o= o> a 0oving Average as aconstrainment trade in a counter trend trade ONL8 a>ter "rice has traveled asignicant distance a/a. >rom the 56 and 2oth turned 2elo/ and retested alo/er 0A?

$? NEMER 9ORCE a trade; /ait "atientl. >or the ,"er>ect- setu"s >ound in thismanual?

3? NEMER TRADE i> .ou are not #66 ,sure- o> the trade? 7ut at the same time;don't let >ear sto" .our trading; .ou must trade; @ust 2e #66 ,sure- the tradets the rules 2e>ore .ou do?

? Lastl.; !E1ER TRA.E T2E #ORU#0!E3 The ,(orcu"ine- is an area o> "riceactivit. /here the "rice 2ars have lots o> /ic*s on 2oth sides o> them; andthose /ic*s are ,signicant- in siHe; meaning more than @ust a >e/ "i"s? The,(orcu"ine- is demonstrated in the e:am"les o> ,Sta. OT- >ollo/ing thisarea o> denition?

9a*eouts occur o>ten in 9ore: Trading 2ut there are /a.s to mitigate them? 9irst;DON'T LET (R&CE 9OOL 8O+ %ere are a >e/ e:am"les o> /hat & mean?

RE0E07ER; & no longer use the 05; the line colors have changed and & no longeruse the "ur"le 0A?


34/68

&n the a2ove chart; the last area in the 2o: is /here lots o> ,>a*e outs- ha""en?Things ma. loo* good; 2ut an. entr. in these areas /ould violate the rules andleave .ou vulnera2le to indecision and man. other 2ad things such as reversals thatare too >ast; e:tremel. /ide SL settings and more?

Avoiding the 2ad trades is @ust as im"ortant as ma*ing the good ones? &> .ou are not,sure- o> the trade; STA8 OT and /ait >or a 2etter setu"?

rade G #is, /anagement

#is, /anagement:

Ris* is a "ersonal thing and it should 2e? No one can assess ris* the same /a. .oudo and no one should? There are man. /ho sa. never to ris* more than $ on atrade; some sa. 3 and & have seen traders use as high as $6 on a trade? &t allde"ends on .our condence level and ho/ much .ou can a=ord to lose i> .ou do?

(ersonall.; trading /ith $ to 3 ris* (ER (OS&T&ON is acce"ta2le to me? What thatmeans is that i> & ta*e a "osition in one currenc.; usuall. it's no more than a 3 ris*>or that currenc.? Sometimes; & ta*e t/o "ositions in a currenc. and that meansthat each "osition is 3 or 1 total ris*? Sometimes; & see reall. good trades inmulti"le currencies and & can mitigate ris* 2. ta*ing a single "osition in more thanone currenc.? As long as each "osition is no more than $ to 3; & am "ersonall. ne/ith it?

0. suggestion is that .ou trade /ith no more than $ "er "osition to start learningand O!L4one currenc. /hen .ou start? 8ou need some time to learn to trade TheDance and to learn the s"ecic currenc. .ou choose? All currencies have a slightl.

di=erent ,"ersonalit.- 2ecause slightl. di=erent traders overall trade them?

rade /anagement:

Trade management is NOT the same as ,ris*- management though it can greatl.a=ect and either reduce or increase the ris* o> .our trading? 9or e:am"le; i> .outrade one lot; or one "osition; then .ou need to have a /a. o> trading that allo/s.ou to ,loc* in- as >ar as that is "ossi2le; some "i"s earl. on and then tr. to ,let itrun- a>ter that? &t can 2e done; 2ut /ith one "osition it's a 2it harder and some2ro*ers /ill not let .ou ,scale- out a>ter the entr. thus ,loc*ing in- some "i"s earl.on 2. actuall. ta*ing them O99 the ta2le /hen .ou do this?

The 7EST /a.; in m. hum2le o"inion is to ta*e t/o "ositions /ith less ris* each/hen trading and e:it the rst "osition at some "oint /here .ou have made a solidgain; then move the SL to 7E and let the last "osition ,run- and trail the SL ,2. therules?- to ma:imiHe the last "osition and .our trade?

The scri"ts included in this strateg. /ill o"en TWO "ositions each /ith #?5 ris* >ora total o> 3 overall? The rst "osition /ill have a ,ta*e "rot- set >or #5 "i"s andthe second one >or a2out #66; /hich .ou can increase /ith the T( scri"t i> it's reall.,running- hard .our /a.?

DO NOT change this /hile .ou are learning? Ta*ing some o> the "i"s earl. isETRE0EL8 "o/er>ul? &t all 2ut guarantees /inning trades; &9 .ou >ollo/ the rules tothe letter; AND mitigates or eliminates most o> the ris* o> the trades ta*en? &n


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addition; it allo/s .ou to ,let it run- as .ou have heard so man. times and "ro2a2l.struggles /ith as & did earl. on?

& never reall. could gure out ho/ to ,let it run- and it al/a.s seemed to end u"going against me? T%&S SOLMES all that? &t eliminates; >or the most "art the"ossi2ilit. it /ill go against .ou once .ou are in "rots; AND it allo/s a #66 "i",2reathing s"ace- >or the trade to run to/ard so .ou can learn to trail the SL as

/ell?

Now let's tal, E=its"

E:its can actuall. 2e more importantthan entries? This is the 0A&N reason >orusing t/o "ositions and ta*ing one out earl.? 0ost o> this manual is dedicated toltering; ,seeing- and ta*ing strong entries so .ou can avoid lots o> losses? The"ro2lem is that even /ith a/esome entries; i> .ou don't have an eBuall. strong e:itstrateg.; .ou /ill still most li*el. >ail? & did >or a long time?

When & rst 2egan; & had man.; man. trades that /ent "rota2le "rett. Buic*l.; 2utin an e=ort to let the trade ,2reathe- as so man. tal* a2out; & o>ten ended u" at aloss? Letting a trade ,2reathe- too >ast is o>ten >atal? &> the trade is a strong trade;it should give .ou at least TWO 2ars o> "rot 2e>ore an. reItest occurs o> an.signicance? &> it doesn't; .ou reall. don't /ant to 2e in the trade an. /a.?

Still; allo/ing a trade to ,2reathe- is e:tremel. im"ortant to long term tradingsuccess; 7T at the 2eginning; NOT LOS&NK is 0ORE im"ortant? &t 2uilds condencein the strateg.; .our a2ilit. to use it and it 2uilds .our account as /ell? &> .ou have"er>ect entries ever. time; 2ut let lots o> them go negative .ou /ill lose condencever.; ver. Buic*l. and have "ro2lems; 2eginning to thin* the strateg. is Ja/ed;

/hen .our ,e:it strateg.- is the REAL "ro2lem+ SE T%E SCR&(TS (ROM&DED toght this+

Earl. on & >aced this; and the /a. the scri"ts are set is the a2solute 7EST solution &could nd? There are man. /ho /ill tr. to tell .ou to use more "ositions; less ris*and man. di=erent com2inations? Those ma. all /or* /ell /ith T%E&R strateg.; 2utNOT >or The Dance? SE T%E SCR&(TS AND DO NOT change them?

ee" in mind that /hat .ou are aiming >or is consistenc.; not huge "rots; at leastat rst? The "rots and trade siHes /ill gro/ i> .ou are consistent? The main idea isto hit .our targets ever. time? T%EN /or* on ma:imiHing the trades in other /a.s

such as moving .our SL on each 2ar and so on? 8our ,target- is NOT the #66 "i" T(set 2. the scri"ts >or the second "osition? &T &S to 2e "rota2le EMER8 S&NKLE

TRADE; /hether it is >or onl. 7E# or and e:it >or a >e/ more "i"s /hen "ricehesitates too long >or .ou; or an e:it at or ver. close to the ne:t Round Num2erlevel? ALL ARE ACCE(TA7LE trades? Even a 7rea* Even trade is a good trade in the2eginning and in >act even >or veterans o> trading?

At rst; .ou /ill "ro2a2l. onl. 2e a2le to "rot #6 to $6 "i"s consistentl. /ith thisstrateg.? T%AT &S (ER9ECTL8 9&NE; and acce"ta2le? CONS&STENC8 is the goal nothuge "i" counts?

As .ou gain more and more e:"erience; .ou /ill 2egin to have a ,9eel- >or the tradeand "rice's movement and momentum? T%AT is /hen .ou can 2egin to /or* onma:imiHing the trades and increasing "i" counts?


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One o> the 2est /a.s to ma:imiHe a trade is to "rogressivel. move .our SL u" to thelast retrace level and *ee" it @ust a >e/ "i"s short o> that? Then; 2. moving it u"a>ter each level; .ou /ill in e=ect 2e allo/ing (rice itsel> to dictate .our e:its; not a"redetermined T( level? &t /ill ta*e some "ractice to learn this; 2ut *ee" at it as it.ields reall. strong re/ards?

NOW; TRA&N 8ORSEL9 TO &KNORE T%E VV &N T%E TRADE and .our account? 9OCS

ON (&(S instead? There are a great man. /ho /ill argue vehementl. that .oua2solutel.; "ositivel. must "a. attention to the o> ris* each trade; the total o> thetrade and in .our account; .our e:"osure and on and on and on? That's all CRA(unless .ou can rst 2ecome consistent in .our trading? Without consistenc.; .ou/ill never have an.thing to manage+ 7esides; using the Scri"ts descri2ed later; .oucan manage ris* reall.; reall. /ell and easil. too?

SO; i> .ou reall. /ant to gro/ .our ne/ 2usiness account and have lots o>,inventor.- to /or* /ith; 9OCS ON KOOD ENTR&ES; STRONK E&TS and (&(S ONL8AND ECLS&MEL8? Let the Scri"ts do the /or* o> Ris* 0anagement >or .ou so .oucan >ocus on other things?

Once .ou are used to >ocusing on the num2er o> "i"s; the stress o> the VV >airl.disa""ears? Then .ou are le>t /ith either gaining or losing a >e/ "i"s; nothing moreor less monumental than the "oints in a video game? T%AT is the mindset .oua2solutel. 0ST nurture and master to 2ecome success>ul? The more ,2oring- this2ecomes; the more success>ul .ou /ill 2e?

&> .our trading is more li*e dancing; or "la.ing a video game to .ou; the stress and,>ear- that so o>ten *ills others /ill have Hero e=ect on .ou? 8ou /ill 2ecomeimmune to it and it /ill 2ecome much easier to >ocus on the actual trading strateg.;

the "rice action; and im"roving .our s*ills?

E:its are acce"ta2le at an. "oint .ou are in "rots? &> .ou have care>ull. chosen astrong entr.; moving to 7E # >airl. Buic*l.; sa. a>ter a2out #5 "i"s or so shouldn'teven have an. e=ect on the trade? &> .ou are consistentl. 2eing sto""ed at thatlevel; reIread this manual; use the Simulator and ne tune .our entries some more?

With the entries mastered; 2egin mastering the e:its ne:t? The more s*illed .ou2ecome at ma:imiHing the trades to "reserve the "i"s alread. gained; in the tradeon the rst "osition and learing to ma:imiHe the second "osition; the >aster .ouraccount /ill gro/?

That's it? ee" it sim"le and learn to be consistent /0R+T; then move on to longertrades; more "ositions and sta.ing in to ma:imiHe the trade?

railing the SL:

Once in the trade; and .ou have moved to 7E #; learn to let it run? The >ollo/ingchart is a great e:am"le o> that?

(lace each ne/ SL at the last e:treme o> the last candle $ "i"s and NO 0ORE? &9

the trade sto"s .ou out; .ou WANT T%AT 2ecause it >rees .ou u" >or a ne/ tradeand "ro2a2l. indicates at least a reItest reversal an./a.? 0oving an. moreaggressivel. /ill 2urn .ou too o>ten?


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&> the trade is starting to ,run- 0OME 8OR T( /a. out in >ront to allo/ .ou toma:imiHe the trade?

%ere is a good chart e:am"le? Each 2lac* line is /here the SL /ould have 2eentrailed to a>ter each 2ar until sto""ed out in the trade? & no longer use the 5E0A; orthe longer "ur"le one and & have changed the line colors >or sim"licit.; 2ut the charte:am"le is a great one?

NOE:The averages used are no/ the standard 0T averages and are coloredslightl. di=erentl. and the "ur"le $66 is no longer used? This chart; ho/ever sho/se:tremel. clearl. ho/ to trail the sto" so & *e"t it in the manual >or .ourconvenience?

ee" in mind that i> "rice has 2een ranging; or a 2it more cho"".; .ou ma. /ant tota*e .our "i"s a 2it >aster near a Round Num2er?

The >ollo/ing e:am"le /as actuall. created >or a di=erent illustration; 2ut it sho/sanother as"ect o> trailing sto"s on The Dance; /hich "ersonall. & thin* is a/esome?

The conce"t is getting a ,second 2ite- at the a""le /hile trading? &t means that .ouenter; get sto""ed out "i"s; then the trade ranges 2ac* to ANOT%ER entr. "oint/here .ou reIenter and ta*e that second 2ite; thus harvesting some "i"s TW&CE inthe trading "rocess? %ere is the chart 2elo/? This chart does NOT sho/ the othert/o; 2ut .ou get the idea >rom it ver.; ver. /ell? Comments are on the image 2elo/and 2eside it?


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NOTE This &S a "ro"er setu"; 2ut & have eliminated the thic*er lines in >avor o>sim"licit.? The thinner lines are the correct setu"? 8ou can "la. /ith the highertime >rame ,eBuivalent- lines i> .ou /ant to; & >ound them distracting and Buit using

them?

Setting (& he Charts

#? 9ind .our 0etatrader installation on .our hard drive?$? 9ind the (roles >older and dro" in the entire >older titled ,The Dance- in it??3? 9ind .our &ndicators and Scri"ts >olders under ,E:"ert Advisers- and dro" the

indicators in the a""ro"riate indicators >older; and the Scri"ts in thea""ro"riate Scri"ts >older?

? 9ind .our Tem"lates >older under E:"ert Advisers and to" the included

tem"late ,The Dance- in it?5? Start 0etatrader and a""l. the ne/ (role ,The Dance?- Ever.thing should

loo* e:actl. li*e this manual no/?

&> it doesn't; .outu2e?com has some great videos and this lin* on 99 might hel" as/ell?

htt"///?>ore:>actor.?comsho/thread?"h"PtQ145$!

%ere is a short tutorial on it as /ell?

Right clic* .our ,home- 2utton; then select ,E:"lore- >rom the menu
http://www.forexfactory.com/showthread.php?t=67529http://www.forexfactory.com/showthread.php?t=67529


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&n the ne:t /indo/ that o"ens nd .our ,(rograms- >older; clic* on the icon ne:t toit and e:"and it? As seen here? Then in the right /indo/; scroll do/n to .our0etatrader installation? 9or me that is an &79 >older? 8ours might have the name

o> .our 2ro*er on it or it might @ust have ,0etatrader- on it?

Once .ou nd it; clic* it and e:"and it?


40/68

Once e:"anded; .ou /ill then see >olders >rom 0etatrader in the right /indo/? 9ind,(roles- and dou2le clic* it to e:"and it as /ell? This is the >older the included"role ,The Dance- is dro""ed into as seen here 2elo/?

E:"anded vie/ o> ,(roles- is 2elo/?


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Ne:t is to nd; clic* and e:"and the Tem"lates >older in the le>t /indo/? Then "lacethe included tem"late ,The Dance- in it? Once .ou have "laced the (role and the

Tem"late correctl.; then in the le>t /indo/ nd and e:"and ,E:"erts- and in theright /indo/ .ou /ill then see the Scri"ts; &ndicators >olders? (lace the scri"ts andindicators included in the Hi" le this came in; in those >olders and start 0etatrader?

&> .ou get the error message ,Waiting >or "date- in the chart /indo/; @ust o"en the,0ar*et Watch- are o> .our "lat>orm and drag the a""ro"riate currenc. to the"ro"er charts and the. /ill u"date immediatel.? This /as done /ith a StandardAccount; so i> .ou use a 0ini; micro or some other designation >rom .our 2ro*er; thiserror ma. occur? The solution is e:"lained in the ne:t section?

(sing he *ro?le

&ncluded in the Hi" le is a ,(role- >or .our use in setting u" .our charts? (roles

are a neat >eature o> 0etaTrader that allo/ .ou to save a ,"role- and ra"idl. a""l.it to another set o> currencies? When installing the ,"role- @ust nd .our0etaTrader installation as in the "revious section on installing them?

Once .ou have ever.thing installed; .ou ma. see an error message that sa.s


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,Waiting >or "date- or something similar in .our chart /indo/s? &> .ou are using a0ini; 0icro or some other account; .our 2ro*er ma. use di=ering currenc.designations to u"date to .our charts than these /ere created /ith? Should thatoccur; there is a Buic* and eas. :?

ust o"en the ,0ar*et Watch- /indo/ and select the currenc. .ou /ant >rom thelist? Clic* and hold the mouse 2utton on that currenc.; then drag it to the chart .oudesire and .ou /ill instantl. see it change to that currenc. and u"date? &t reall. isthat sim"le? Re"eat >or each chart /indo/?

&> .ou decide to du"licate this >or more currencies; @ust save the "role /ith a ne/name and >ollo/ the same "rocedure to re"lace the currenc. in the /indo/sdis"la.ed /ith a ne/ one?

See the image 2elo/? ee" in mind the ne/ "role onl. used three charts on ONEcurrenc. >or trading?

(sing he Scri&ts

Several ,Scri"ts- are included in this strateg.? The intent o> these Scri"ts is to ma*etrading much sim"ler; Buic*er and easier to do? #RAT0E 0! .EMO2e>ore usingthem so .ou *no/ /hat .ou are doing /ith them +++

The Scri"ts are as listed 2elo/? NOTE sing the ,one currenc.- setu" .ou ma.sim"l. ,dou2le clic*- the scri"ts instead o> draggin and dro""ing i> .ou li*e?

AHSetLotSie: This scri"t sets the siHe o> Lots .ou /ill 2e trading >or each


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session? I /(S 9E SE +I#S5or eac% sessionor the ne:t t/o scri"ts/hich e:ecute a 2u. and a sell W&LL NOT /or*? &t is used to set the Lot siHe2ased on the account 2alance and the Sto" Loss .ou choose to use? &t is "reIset to a #5 (i" SL 2ut /hen clic*ed launches a "o" u" .ou can use to changethe ris* and the SL setting i> .ou /ant to? That is not recommended?

AH9u0:This Scri"t e:ecutes a single order 2u. sim"l. 2. dro""ing it on the

chart? &t is "reset to enter TWO "ositions /ith a SL o> #$ "i"s on each /ith aT( o> #5 and a #66 "i"s res"ectivel.? Once e:ecuted .ou should ma.decrease the SL i> .ou have the e:"erience to do so? The settings on the rst

T( is %ARD; DO NOT change it? The SL and the second T( are onl. to give .outime to thin* a2out /here to set it; 2ut still have them in "lace?

AHSell:This Scri"t e:ecutes a single order Sell sim"l. 2. dro""ing it on thechart? &t is "reset to enter TWO "ositions /ith a SL o> #$ "i"s on each /ith a

T( o> #5 and a #66 "i"s res"ectivel.? Once e:ecuted .ou should ma.decrease the SL i> .ou have the e:"erience to do so? The settings on the rst

T( is %ARD; DO NOT change it? The SL and the second T( are onl. to give .outime to thin* a2

Documents

The M15 Dance Manual