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FOREX ASSASSIN

TABLE OF CONTENTS

Introduction
Strategy History
Mastering The Paper Trade
Trading: It’s Your Business
Free Demo Accounts…and other stuff
Forex Assassin Rules
Entry and Targets
Stop Loss, Parachute Stop Loss
Example#1 (AUD/USD)
Example#2 (EUR/USD)
Example#3 (USD/JPY)
Example#4 (EUR/USD)
Example#5 (USD/JPY)
Forex Assassin Summary
Reference Guide
TradeStation Info
FOREX ASSASSIN INTRODUCTION

Congratulations on purchasing the Forex Assassin manual and taking a step towards profitable trading.
We have included several links to sites that offer demo accounts to help you paper trade and have also
included several step-by-step examples for you to follow along with and to help you understand the
strategy.
This is, in our humble opinion, one of the most unique strategies being offered today, as you will see as
you study this manual. We hope you take the necessary time to paper trade (more on this later) and that
you plan on treating your trading career the same as you would any other career.
STRATEGY BACKGROUND
This strategy was founded on the most important information the market gives us…Price. The previous
price dictates where future prices will go. Keeping tabs on this price action helps us be patient in
waiting for the correct entry and keeps us from over trading. Other strategies trade by the adage “ya got
to be in it to win it”…to us this sounds more like Las Vegas; worse actually, because with every trade
you pay a commission and we want to avoid racking up needless commissions. So we have developed a
way that limits unneeded market exposure while still giving us a sufficient amount of trades to make
profits. This also gives us a way to take advantage of the Forex market, while avoiding the jiggles and
noise often found trading currencies.

We concentrated on developing a strategy that would suit the hardcore trader who is sitting in front of
his screens day in - day out, as well as the part time trader who might not have all day to watch the
markets but still wants to participate.

“The art of speculation is knowing when to speculate.”

When swing trading the Forex we are looking to measure the range of the market and play the break
out of this range. We look to have one trade a week per currency pair to avoid the trading “chop” that is
so often present in the Forex market.

Some of you will look to trade several currency pairs; others might already be familiar with one and
will stick with what you know. Some might want to scale out of a position and hold the rest for larger
gains (if you are an experienced trader and have a sufficient account) ... Whatever you decide, be sure
to paper trade any strategy that is new to you, including this one.
Mastering The Paper Trade (Rules for ANY New Strategy)
It is often said that paper trading is no use because it cannot mimic the feel of having real money on the
line. We agree with this, nothing is as real as a live account. However there are still valid reasons to
paper trade.

If you are looking to trade a strategy that you are unfamiliar with then it only makes sense to paper
trade it to understand the different nuances. It will also help in taking some of the emotion out of
trading, as you will use the time paper trading to become comfortable with the strategy.

Probably the most important and often overlooked aspect of paper trading is using it to put together
your trading plan. This is the chance to trade the strategy and adjust it to meet you own personal needs.
How many manuals have you bought where the authors have told you what the plan is without
knowing your personal situation…doesn’t make sense does it? We want you to formulate your own
plan using this strategy.
A couple of basic rules when you are paper trading;

Plan on paper trading for 4-6 weeks.


Trade the same size you would if you were trading with real money.
Record all trades made (And no cheating!!!)
Use this time to develop a trading plan to suit your personal situation.
Trading: It’s Your Business
A common mistake we see with new and old traders alike is that they don’t treat their trading as though
it were a business. This is a critical mistake and can cost you money if it is left unattended.
Every day you will have a list of trades, paper or real. These trades and their details need to be recorded
in a journal for future reference. (You should have downloaded two of them when you were taken to
the download page after purchase...If not contact us and we will email it to you) If you’d like to add
anything to it please feel free as this is your own personal trade journal. This journal will be the “proud
father when you follow your rules and profit” and it will also be the “tattle tale little sister” when you
don’t follow your trading plan.

Below is an example of a simple trading plan. It is not to be copied and used for this strategy. It is to
show the structure of what a simple trading plan looks like.

---------
Sample Trading Plan

Mission Statement
To become a net positive trader – 1k - 2k a month no later than the end of the 3rd quarter of this year.
I will not be scared money.
I will follow my plan.
I will succeed.

To accomplish this I will need to add the following:


Fund an account with XYZ broker
Purchase a UPS backup battery
Cordless mouse and printer
Entries
Only take trades that fall under #1 and #2
Set my buy and sell stops early Monday morning for the pairs I plan to trade.
Double check entry calculations
Start with one contract
Exits
Look for 50+ pips
If X pips in the money and comes back to entry get out flat.
Trades usually go in my favor right away...if I have to wait too long…get out.
First trade is a 100pip trade…stop for the week
Stops
No more than 30 pip loss per trade
Max loss of $300 gross per trade
Record Keeping
All trades are recorded and kept in a binder
All trades are recorded in a spreadsheet to tabulate results and show sharp ratio, win/loss %
etc.
Checklist of all things I need during the day

Morning Preparation
Visit thestreet.com to see what econ numbers are being announce that day
Visit Yahoo.com finance to see if there is any news from overseas, big earnings etc…overall any
BIG market news
Add Contracts
Needs to be done slowly and carefully
When have 5-8 net winning trades in a row. And then only increase 1 contract at a time.

*NOTE: This is just a template example for you to base your own trading plan on.
Free Demo Accounts…And Other Stuff
We have put together a list of websites that you will find useful, some demo accounts, news sites, free
stuff sites etc.

Demo Trading Accounts


www.forextips.com/forex_broker.htm
www.fxcm.com
www.forexdemo.com
www.mbtrading.com/fx/demo.asp
www.fxsolutions.com
www.oanda.com
http://www.gftforex.com/

News Based Sites


http://finance.yahoo.com
http://finance.google.com/finance
http://moneycentral.msn.com/home.asp
(All 3 of the above links are pretty standard but do offer a lot of info)
http://www.briefing.com/
http://www.thestreet.com

Free Stuff
http://alps.tradepub.com
Free subscription to FUTURES magazine. Simply search publication by name and follow the steps.
http://www.pokerstrategy.com
Free $50.00 poker account. No credit card needed. Just need to pass an open
book quiz. (Sorry we don’t have a strategy for winning at poker )
http://www.centsports.com
Site where you can bet on sports without putting any of your own money down. (Again, we don’t have
a strategy for betting on sports )
Forex Assassin Rules
Please pay close attention to the upcoming chapters, as we will be getting into the meat of the strategy
and how it is implemented. Before we get into the entry, exits and stops we will cover the general rules
for the strategy.

As mentioned earlier in the manual we look are looking for one trade to be triggered per week per
currency pair. We avoid trading Forex intraday for a few of reasons.

1.With the market open 24 hours there is seldom any consistency in price action using smaller time
frames. The market might be volatile during London hours, flat during New York and choppy
during Tokyo. And not everyone will be able to trade all 3 of these times. So just “hoping” the price
action will be as required in your part of the world…is not worth the risk.

2.The Forex market is driven heavily on economic data to produce trends, ranges etc… (For some
strategies that’s all they trade off of…this isn’t one of those strategies) So it seems as though
currency pairs are either reacting to an announcement or waiting for one happen. This explains the
tight ranges then the explosive moves. The ranges are often so tight they don’t really provide the
opportunity we are looking for. And the explosive moves are so violent that it’s tough to get filled
without a great deal of slippage.

3.The majority of Forex brokers make money off of the spread (diffrence between the bid and ask).
So naturally they want traders to make as many trades as possible throughout the day so they can
capture this risk-free profit. Ever wonder why they don’t charge a commission…cause they are
making more by capturing the spread from every trade a trader makes. We are not able to capture
this spread so we feel there is less risk looking for fewer trades and larger profit targets.

So this is why we take a longer-term outlook trading Forex.


Entry
We start by collecting the previous weeks high, low and close and enter it into the spreadsheet. We
begin the trading week on 00:00 GMT Monday, (ignore the trading action on Sunday) and end on
Friday GMT. Example spreadsheet below.

Previous Weeks HIGH LOW CLOSE Long Short Trade Week


Jan 28-Feb 01/08 0.00 0.00 0.00 Feb 04-08/08
Jan 21-25/08 0.00 0.00 0.00 Jan 28-Feb 01/08
Jan 14-18/08 0.00 0.00 0.00 Jan 21-25/08
Jan 07-11/08 0.00 0.00 0.00 Jan 14-18/08

The spreadsheet then calculates where our long and short breakout trades will be for the upcoming
week.

As these trades are considered passive in the amount of time it takes to monitor them, many traders will
look to calculate several pairs. Use your time paper trading to get used to monitoring multiple Forex
swing trades.

Targets
When taking a longer-term approach one needs to increase their profit expectations, this is not a
scalping strategy. Some traders will look to trade 3-6 pairs per week and set their targets to 30-50 pips.
Others will look to trade one or two and expand their targets from 75-100 pips.

We suggest you start out looking at one or two of the pairs listed below and set you targets to 75-pips
per week, per pair. This is where your paper trading will help you prepare your trading plan and define
your own personal targets, which will vary from trader to trader.

The following FOREX pairs are ideal for trading this strategy.
1.EUR/USD
2.GBP/USD
3.USD/JPY
4.USD/CHF
5.AUD/USD
6.USD/CAD
Stop Loss

Our risk reward ratio for the swing trades will vary from 0.75:1 to 1:1, we never want to risk more than
we are targeting. As an example if we were going for a larger gain such as 100 pips we would set our
stop loss to 75 pips. For smaller targets such as 50 pips we can risk an equal amount.

Parachute Stop Loss


We use this when a trade goes in our favor, fails to reach our target, then comes back to our entry. This
is a great way to save us from adding to our losing trades.

The thought behind this stop loss is that when a market breaks out of a range it will continue on and
have some follow through to new highs or lows. But if it fails to continue we want to get out of that
trade, as it will most likely end up as a loser.

If the trade goes in our favor 40% then comes back to our entry price, we get out flat.

I.E. our target is for 100 pips; the trade goes in our favor 40 pips then turns around and comes back to
our entry price…we get out flat.

* At the end of the manual we give an explanation on how to read the Tradestation results for the GBP/
USD and AUD/USD that you were able to download when you purchased the manual. These results
have different targets, stops and parachute stop losses than the rules listed above and in the examples.
Example #1 AUD/USD
Trade Week January 21-25/08

Now you have learned the steps involved; how to collect the data from the previous week, how to enter
it into the spreadsheet and how to set the targets and stop losses, we will now go through several step-
by-step examples. Throughout the examples we will show different targets for different
style/capitalized traders.

In the first example we will use the Tradestation settings that have been back tested. Our target will be
89 pips, stop will be 59 pips and the parachute stop will be 60% of our target.

January 14/08 – January 18/08 Price Collection

We begin by collecting the high, low and close of this week and entering them into the spreadsheet
under the corresponding cells. This gives us the long and short breakout entries for the trade week of
January 21-25/08. We prefer to use the weekly chart to gather this info, which is the easiest and
quickest way to do it. We need to be sure and double check that the chart is set to exclude Sunday
trading action...Monday to Friday only...and that the time zone is GMT. So the start of the week is
00:00 GMT

See chart below


You can see from the yellow box on the chart how easy it is to get the high, low and close by just
placing the charts pointer or cross hair tool over the weekly candle.
Once we have this data we enter it into our spreadsheet as seen below.

Previous Weeks HIGH LOW CLOSE Long Short Trade Week


Jan 28-Feb01/08 Feb 04-08/08
Jan 21-25/08 0.0000 0.0000 0.0000 Jan 28-Feb01/08
Jan 14-18/08 0.9017 0.8699 0.8790 0.0106 0.8896 0.8684 Jan 21-25/08

January 21/08 – January 25/08 Trade Week

As we can see from our spreadsheet the long entry is 0.8896 and the short entry is 0.8684. So starting
Monday January 21 at 00:00GMT we are looking one for these triggers to hit. (once one is hit we
cancel the other) The profit target is 89 pips, we are risking 59 pips and the parachute stop will be set to
60%

See chart on next page.


The short trade was triggered at 0.8684 on Monday January 21/08 and gave us the 89 pip target we
were looking for, later the same day.
Some more experienced and more capitalized traders might want to hold onto a portion of their position
and look for larger gains. This exit strategy should only be considered if you have been trading for
several years and have sufficient funds.

Below is the chart showing how holding a portion of your position can pay off.

In this example there was an extra 50+ pips for those holding on to some of their position. This also
shows how important it is to take the paper trading seriously. By keeping good records you will be able
to put together the trading plan that suits you best.
Example #2 EUR/USD
Trade Week January 21-25/08

In this example we will show you one entry but with two different targets and stops and see how both
turned out. We want to show you this to drill home the fact that by paper trading you will decide which
of these two targets might best suite your own personal situation.

January 14/08 – January 18/08 Price Collection

As usual we start of by collecting the high, low and close of this week and entering them into the
spreadsheet in the corresponding cells. This gives us the long and short breakout entries for the trade
week of January 21-25/08. We prefer to use the weekly chart to gather this info, which is the easiest
and quickest way to do it. We need to be sure and double check that the chart is set to exclude Sunday
trading action...Monday to Friday only...and that the time zone is GMT. So the start of the week is
00:00 GMT. The collecting of data can be done anytime over the weekend, before the Monday GMT
open.

See chart below


This chart illustrates how easy it is to grab the high, low and close using a weekly chart. Simply place
the cross-hair tool over the corresponding bar and read off the H,L,C as seen in the yellow box in the
bottom left .
Once we have the data we simply enter it into the spreadsheet.

Previous Weeks HIGH LOW CLOSE Long Short Trade Week


Jan 28-Feb01/08 0.0000 0.0000 0.0000 Feb 04-08/08
Jan 21-25/08 0.0000 0.0000 0.0000 Jan 28-Feb01/08
Jan 14-18/08 1.4921 1.4588 1.4617 0.0111 1.4728 1.4506 Jan 21-25/08

January 21/08 – January 25/08 Trade Week

As we can see from the spreadsheet the long entry is 1.4728 and the short entry is 1.4506. So starting
Monday January 21 at 00:00GMT we are looking one for these to triggers to hit. (once one is hit the
other is canceled)

As mentioned earlier in the example, we are going to look at two separate profit targets, stops and
parachute stops.

Example Plan A

Target = 75 pips

Stop = 56 pips

Parachute Stop = 40% of target, 30 pips (if the trade goes in our favor 30 pips then comes back to our
entry price we get out flat)

Example Plan B

Target = 130 pips

Stop = 97 pips

Parachute Stop = 40% of target, 52 pips (if the trade goes in our favor 52 pips then comes back to our
entry price we get out flat)
Example Plan A

In this example we see the trade went our direction more than 30 pips...our designated Parachute Stop
value...and then came back to our entry price. At this point we would exit the trade and get flat. Now in
hind site we could of stayed in and got a nice trade...but we don't have the benefit of being the
“Monday morning quarterback” so we are smart to stick to our trading plan and get out. A flat trade
doesn't cost us anything.
Example Plan B

With this plan the target was larger and thus the Parachute Stop is larger as well. This larger Parachute
Stop kept us in the trade, even though it came within one pip of triggering.

While one trade turned out flat and the other gave a very nice profit...both are good trades. This is
because they would belong to two different traders who have two different trading plans. We want to
stress the importance of paper trading and building the trading plan that suits your needs.
Example #3 USD/JPY
Trade Week January 14-18/08

In this example we will show you a trade on the USD/JPY pair using the standard or starting point
target, stop and parachute stop. We will also use a daily chart to collect the High, Low and Close
values.

January 07/08 – January 11/08 Price Collection


As usual we start of by collecting the high, low and close of this week and entering them into the
spreadsheet in the corresponding cells. This gives us the long and short breakout entries for the trade
week of January 14-18/08. We need to be sure and double check that the chart is set to exclude Sunday
trading action...Monday to Friday only...and that the time zone is GMT. So the start of the week is
00:00 GMT. The collecting of data can be done at your leisure over the weekend, before the Monday
GMT open.

See chart below


You'll notice this data collection chart is different from the other examples. While we suggest using the
weekly chart, some charting platforms might only have daily charts. This is what is shown above, with
the yellow vertical lines marking Monday and Friday of the week. So we simply move the cross hair
tool or pointer and hold it over the candle that has the high, low and close. This is still a very easy and
accurate way of collecting the data even if you are without weekly charts.
The next step is to enter the data into the spreadsheet.

Previous Weeks HIGH LOW CLOSE Long Short Trade Week


Jan 21-25/08 0.00 0.00 0.00 Jan 28-Feb01/08
Jan 14-18/08 0.00 0.00 0.00 Jan 21-25/08
Jan 07-11/08 110.10 108.49 108.84 0.54 109.38 108.30 Jan 14-18/08

January 14/08 – January 18/08 Trade Week


The spreadsheet tells us the long entry is 109.38 and the short entry is 108.30. So starting Monday
January 14 at 00:00 GMT we are looking one for these to triggers to hit. (once one is hit the other is
canceled) The profit target is 75 pips, we are risking 56 pips and the parachute stop will be set to 40%

See chart on next page.


The chart above shows a winning trade with a 75 pip target. For some traders they might have it in their
trading plan that they are looking for 50 pips, which the would have been a successful trade as well.
Others might have been looking for 100 pips with a 40% parachute stop, which would have triggered,
and they would get out flat. All 3 of those scenarios are acceptable because they are different plans to
meet different traders needs.
Example #4 EUR/USD
Trade Week January 28 – February 01/08

For this example we will outline the steps for a trade on the EUR/USD pair using the standard target,
stop and parachute stop. (75 pip target, 56 pip stop, 40% parachute stop) We will also use another daily
chart to collect the High, Low and Close values.

January 21/08 – January 25/08 Price Collection


We collect the high, low and close of this week and enter them into the spreadsheet in the
corresponding cells. This gives us the long and short breakout entries for the trade week of
January 28 –February 01/08. We need to be sure and double check that the chart is set to exclude
Sunday trading action...Monday to Friday only...and that the time zone is GMT. So the start of the week
is 00:00 GMT.

See chart below


Here we used a daily chart to collect the weekly data. The yellow vertical lines indicate Monday and
Friday of the week. So we simply move the cross hair tool or pointer and hold it over the candle that
has the high, low and close. This is an easy and accurate way of collecting the data for those who don't
have access to weekly charts.
The next step is to enter the data into the spreadsheet.

Previous Weeks HIGH LOW CLOSE Long Short Trade Week


Jan 28-Feb01/08 0.0000 0.0000 0.0000 Feb 04-08/08
Jan 21-25/08 1.4777 1.4364 1.4681 0.0138 1.4819 1.4543 Jan 28-Feb01/08

January 28/08 – February 01/08 Trade Week


The spreadsheet quickly tells us the long entry is 1.4819 and the short entry is 1.4543. So starting
Monday January 28 at 00:00 GMT we are looking one for these to triggers to hit. (once one is hit the
other is canceled) The profit target is 75 pips, we are risking 56 pips and the parachute stop will be set
to 40%

See chart on next page.


This chart shows the entry and exit of another winning trade with a 75 pip target. For some traders they
might have it in their trading plan that they are looking for 50 pips, which the would have been a
successful trade as well.
Example #5 USD/JPY
Weeks: Aug 20-24/07, Aug 27-31/07, Sep 3-7/07, Sep 10-14/07
Below is a screen capture of a series of 4 trading weeks, for the USD/JPY. In this example we will
break down each week calculation, trade and result.

August 13/07 – August 17/07 Price Collection


We collect the high, low and close of this week and enter it into the spreadsheet. This will give us the
long and short breakout entries for the following week. We use the weekly chart to easily gather this
info. We made sure to double check and change any settings needed to ensure the start of the week is
on Monday at 00:00 GMT and not Sunday.

See chart below.


We used the weekly chart to instantly give us the high, low and close, which we then enter into the
spreadsheet giving us our long and short breakout trades.

Previous Weeks HIGH LOW CLOSE Long Short Trade Week


Sep 3-7 07 0.00 0.00 0.00 Sep 10-14 trade
Aug 27-31 07 0.00 0.00 0.00 Sep 3-7 07
Aug 20-24 07 0.00 0.00 0.00 Aug 27-31 07
Aug 13-17 07 118.56 111.58 114.35 2.33 116.68 112.02 Aug 20-24 07
August 20/07 – August 24/07 Trade
The long entry is 116.68 and the short entry is 112.02. We set our target to 75 pips, we will risk 56 pips
using the .75:1 risk reward ratio.
See the chart below.

Our long trade was triggered at 116.68 but failed to give us the 75 pips we had set as our target. Notice
the lack of follow through in this example. We calculated our parachute stop loss at 40% of our
target…30 pips. The trade went our way 30 pips triggering the parachute stop loss. So as the price
came back to our entry we got out flat. This saved us from losing 56 pips.
August 20/07 – August 24/07 Price Collection
We follow the regular steps and we collect the high, low and close of this week and enter it into the
spreadsheet. This will give us the long and short breakout entries for the following week. We use the
weekly chart to easily gather this info.

Previous Weeks HIGH LOW CLOSE Long Short Trade Week


Sep 3-7 07 0.00 0.00 0.00 Sep 10-14 Trade
Aug 27-31 07 0.00 0.00 0.00 Sep 3-7 07 Trade
Aug 20-24 07 117.13 113.66 116.42 1.16 117.58 115.26 Aug 27-31 07 Trade
Aug 13-17 07 118.56 111.58 114.35 2.33 116.68 112.02 Aug 20-24 07 Trade

The spreadsheet gives us the long and short entries for the week of Aug, 27-31/07
August 27/07 – August 31/07 Trade
The long entry is 117.58 and the short entry is 115.26. The target is 75 pips and we are willing to risk
56 pips using a .75:1 ratio.

The short entry was triggered and gave us our 75 pips rather quickly. There were 125 pips available, so
if you target were larger you would have made a bit more. But 75 pips trading one currency pair is a
great trade. No need to be greedy as we are looking for consistent profits.
August 27/07 – August 31/07 Price Collection
We collect the high, low and close of this week and enter it into the spreadsheet. This will give us the
long and short breakout entries for the following week. We use the weekly chart to easily gather this
info.

Previous Weeks HIGH LOW CLOSE Long Short Trade Week


Sep 3-7 07 0.00 0.00 0.00 Sep 10-14 Trade
Aug 27-31 07 116.74 113.84 115.76 0.97 116.73 114.79 Sep 3-7 07 Trade
Aug 20-24 07 117.13 113.66 116.42 1.16 117.58 115.26 Aug 27-31 07 Trade
Aug 13-17 07 118.56 111.58 114.35 2.33 116.68 112.02 Aug 20-24 07 Trade

The spreadsheet gives us the long and short entries for the week of Sep 3-7/07.
September 03/07 – September 07/07 Trade

Our short entry was triggered at 114.79. We were able to get our target of 75 pips.
September 03/07 – September 07/07 Price Collection
Again we start off by collecting the high, low and close of this week by using the weekly chart and
entering it into the spreadsheet. This will give us the long and short breakout entries for the following
week.

Previous Weeks HIGH LOW CLOSE Long Short Trade Week


Sep 3-7 07 116.46 113.12 113.37 1.11 114.48 112.26 Sep 10-14 Trade
Aug 27-31 07 116.74 113.84 115.76 0.97 116.73 114.79 Sep 3-7 07 Trade
Aug 20-24 07 117.13 113.66 116.42 1.16 117.58 115.26 Aug 27-31 07 Trade
Aug 13-17 07 118.56 111.58 114.35 2.33 116.68 112.02 Aug 20-24 07Trade

The spreadsheet gives us the long and short entries for the week of Sep 10-14/07.
September 10/07 – September 14/07 Trade

We have another long trade and another great breakout reaching our target of 75 pips.

By now you are becoming very familiar with the strategy and the step-by-step process that is involved
in collecting the data and placing a trade.

You can see by these examples it is fairly easy to collect the data as it is done once a week. This makes
it ideal for those who might not have the time to trade intraday strategies but still want to put their
money to work using an excellent strategy.

By following the rules trading just the USD/JPY pair from example #5 we would have made 225 pips
over the four-week period above. For some they might have stopped after reaching 150 pips as their
monthly goal, others might have had smaller targets spread out over several currency pairs. Just make
sure you stick to your own trading plan.
FOREX ASSASSIN SUMMARY
As you have noticed throughout the manual we have spent the majority of time covering actual
examples of the strategy. Having bought enough trading manuals ourselves, we know that needless
filler about what a candlestick is and what a bid and ask is etc. is a waste of money. All that info can be
found on the internet for free.

We hope you have found the examples helpful and that you understand fully not only the background
and ideas behind the strategy but the routine that is involved when you are trading it. Please make use
of the demo accounts available, found earlier in the manual. Most last 30 days but there are enough of
them to enable you to paper trade for 3-4 months if you think you need that time.
REFERENCE GUIDE

Demo Accounts – Visit one or several of the links provided and sign up for a 30-day demo account.

During this time use your paper trading account to get used to the charting and order execution. Also
keep track of your trades using the journal we provided.

General Rules
1.No more than 1 trade per week for each currency pair.
2.The trading week begins at 00:00 GMT (ignore any Sunday trading action)
3.Use a weekly chart for collecting the high, low and close and enter it into the spreadsheet to
generate the next weeks long and short entries.

Targets
Depending on your paper trading results and your trading plan, the suggested targets are 30-50 pips
to 75-100 pips.

1.EUR/USD
2.GBP/USD
3.USD/JPY
4.USD/CHF
5.AUD/USD
6.USD/CAD
Stop Loss
Risk/Reward is .75:1 if your targets are 75-100+ pips and 1:1 if the targets are 30-50 pips.
Parachute stop loss is used when a trade goes in our favor 40% then comes back to original entry price,
we get flat.

Trading Spreadsheet
Depending on the currency pair, the spreadsheet will have to be altered to accommodate 2 to 4 decimal
places under the High, Low, Close, Long and Short headings.

The Journals
We have included a couple of journals to assist you in keeping track of your trades.
Journal #1 - Most people will find it easiest to print them out and manually fill them in with a pen.
These results are then transferred to Journal #2 each day.

Journal #2 – Includes 3 spreadsheets, one for you to record results on a daily/weekly basis, one to
record monthly results and one to record yearly results.
TRADESTATION RESULTS
One of our customers who bought the UTZ strategy ran some tests from November 2006-November
2007 on the GBP/USD, AUD/USD. As you will notice the targets and stops vary from market to
market. We suggest you spend time paper trading the strategy using the original targets and stops to get
the feel of the strategy. Then once you are comfortable you can try using the parameters used in the
Tradestation results as well as change them up to see what suits your situation best.

Reading The Tradestation Results


The key things you’ll want to look at are as follows;
1.Performance Summary
This will show you the profit or loss based on the targets that are used. It will also break down the Long
trades, Short trades and All trades.

2. Trade Analysis
This shows the number of trades. All trades, winning trades and losing trades. (Keep in mind when
viewing this section of the Tradestation report, it does not have a column for flat trades; they are
automatically placed in the losing column because there is a commission attached to each trade, thus
counting it as a loser.)

3. Trade List
This shows each trade that was triggered at what time, what direction and the result including
commission.

4. Performance Graph
This shows the equity curve line.

5. Settings
This shows the target and stop used to generate the report.
Under “TradeStation Strategy Inputs” you will see PT for Profit Target and SL for Stop Loss.
Under “TradeStation Strategy Settings” you will see the commission used and the number of contracts.
The “Initial Capital” was set to $100k as a default, which is obviously too high considering the tests
only ever, traded one contract.

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