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FOREX GEMINI CODE

Presents

Forex Trend
Directive

Forex Gemini Code


Published by Alaziac Trading CC
Suite 509, Private Bag X503
Northway, 4065, KZN, ZA
www.ForexGeminiCode.com
Copyright 2014 by Alaziac Trading CC, KZN, ZA

Reproduction or translation of any part of this work by any means, electronic or mechanical, including
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Trademarks: Alaziac Trading CC, Forex Gemini Code, Forex Trend Directive
www.ForexGeminiCode.com

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Introduction

Welcome to the Forex Trend Directive Report!

In this report you will learn how to trade this incredible system and also get
a chance to see how you can install the chart template that is provided
together with this powerful trading system. The Forex Trend Directive
system was developed and has been traded by professional hedge fund
traders. This is in fact, the very first time that the details of this unique
trading system are being released to the public.

The Forex Trend Directive system relies on using standard indicators that
are available on all trading platforms available on the web. The indicators
that are used with this system are the Moving Averages. If youve been
trading for any amount of time, you may already be familiar with the Moving
Averages indicator. However, when trading the Forex Trend Directive
system we will be using this indicator in a unique manner.

The trading method you are about to learn relies on 3 different moving
averages, each with a different configuration. But thats not all, the true
power of this system comes from the manner in which we identify trade
signals. To aid us in identifying valid trade signals, we will refer to multiple
timeframes but in specific combinations. Well take a look at the specific
details of the system in the following chapters. All of the system settings
are provided for you in a chart template that can be applied immediately
onto your MetaTrader 4 trading platform.

This system performs extremely well on its own, but the techniques you will
be learning about can also be applied to any other trading systems you
may already be trading. The system is versatile as it can be used on all
timeframes and currency pairs. The rules are simple and straight-forward,
so you can start using it immediately after reading this manual. So, lets get
started and take a closer look at how it works.
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Setting Up Your Charts

In this section we will take a closer look at the indicators and how to
prepare your charts for trading. Before you can proceed with the steps in
this chapter, please ensure that you have downloaded the MT4 trading
platform or any other trading platform of your choice. Once the system
indicators are applied to your charts, it should look similar to the chart
shown on the following image.

The first thing you will need to do is configure your charts to display price
as bars instead of candlesticks. The system itself can also be traded with
candlesticks but Ive found that reading the opens and closes on bars can
be easier.

In order to do this, open a new chart on your trading platform then press
the F8 key on your keyboard to open the chart Properties window. Next,
click on the Common tab and click on the Bar chart option on the right hand
side of the window. You can see an image showing you these settings on
the following page.
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Once you have selected the Bar chart option on the right hand side of the
window click on the Chart shift and the Chart autoscroll options on the left
had side of the window to ensure the most recent activity on the chart
remains in constant view.

On the following image you can see an example of how the Properties
window should appear once you have configured the settings.

Once you have selected the options shown on the image above, simply
click on the OK button and youre ready to add the rest of the indicators.

The next set of indicators we will be adding to our charts are the Moving
Average indicators. The Moving Average indicator is included among the
standard indicators that come bundled with the Metatrader (MT4) trading
platform and nearly all other trading platforms available to traders these
days.

In the following section I will show you how to add the 3 variations of the
Moving Average indicator we will be using to your charts and how to
configure the settings of each to accommodate our trading method.
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To apply the Moving Average indicator on to your chart you will need to
click on Insert on the top menu of the trading platform. Next click on the
Indicators link then click on Trend and finally click on Moving Average.

You will then be presented with the Moving Average properties window as
shown on the following image:

As you can see on the image above, there are a few parameters to be set
on this indicator. The first setting to change is the Period setting which must
be set to 5. Next, choose the Simple MA Method from the dropdown list
then choose Low from the Apply to dropdown box.

Finally set the Style color to Red and click on the width dropdown and
select the second line to ensure that the line is thick enough to be visible on
your charts. If you feel that the line you see on your chart is either too big or
too small. Simply choose a different line thickness suit your viewing
preferences.

Once you have configured the settings on this window, simply click on the
OK button and the first Moving Average indicator will now be applied to
your chart.

Lets now take a look at the next Moving Average indicator we will be using
in the Forex Trend Directive system.

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The next indicator we will add on to our chart is a 5 period Simple Moving
Average of the Highs. Once again, to add this indicator to your chart simply
click on Insert on the top menu of the trading platform. You then click on
Indicators then click on Trend. Now locate the Moving Average option and
click on it to apply it on to your chart.

You will again be presented with the Moving Average properties window as
shown on the following image:

On the Parameters tab change the Period setting to 5. Next, select the
Simple option from the MA method dropdown list and finally select the High
option from the Apply to dropdown list.

You also have the option to set the Style properties of this indicator. I
personally like to use a DarkOrange colored SMA and also increase the
width of the line so that it is a bit clearer to see on my chart. You are
welcome to configure the Style options to suit your personal preferences.

Once you have configured the settings on this particular window, simply
click on the OK button and the indicator will now be applied to your chart.

At this stage we need to add just one more indicator to our charts before
we can start trading the Forex Trend Directive system. So lets take a look
at the final Moving Average indicator we will apply to our chart.

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


Moving Average. To apply this indicator to your chart simply click on Insert
on the top menu of the trading platform. Next click on Indicators then click
on Trend. Now locate the Moving Average option and click on it to apply it
on to your chart.

You will again be presented with the Moving Average properties window as
shown on the following image:

On the Parameters tab change the Period setting to 50. Next, select the
Exponential option from the MA method dropdown list and finally select the
Close option from the Apply to dropdown list.

Once again, you have the option to set the Style properties of this indicator.
I personally like to use a Blue colored EMA and also increase the width of
the line so that it is a bit clearer to see on my chart. Of course, you are
welcome to configure the Style options to suit your personal preferences.

Once you have configured the settings on this particular window, simply
click on the OK button and the indicator will now be applied to your chart.

Congratulations! Youve now configured the indicators that we will be using


to trade the Forex Trend Directive system and you are now ready to learn
how to identify Buy and Sell trade signals with this system.

Lets begin with the Buy trade rules and an example of a Buy trade.

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Buy & Sell Trade Rules

LONG ENTRY RULES:


1. On the higher timeframe the 5 SMA of the Highs and the 5 SMA of the
Lows should be above the 50 EMA (see timeframe combinations below).
2. On the higher timeframe, wait for a bar to close above the 5 SMA of the
Highs.
3. Switch to the lower trading timeframe (see timeframe combination below)
and confirm that the 5 SMA of the Highs and the 5 SMA of the Lows are
both above the 50 EMA.
4. Wait for a bar to close above the 5 SMA of the Highs then enter a Buy
trade at the open of the new bar.
5. Set a Stop Loss at or below the 5 SMA of the Lows.
6. Set a Take Profit at two times the size of your Stop Loss (2:1
Risk/Reward Ratio) or exit the position manually when a new bar closes
below the 5 SMA of the Lows.
7. Move your Stop Loss to breakeven when price reaches 50% of your
Take Profit.

Heres a list of Lower timeframes and Higher timeframes. On the right side
we have the Higher timeframes used to identify potential trade entries and
on the left side we have the Lower timeframes where we place our trades.

M1 M5
M5 M30
M15 H1
M30 H4
H1 H4
H4 D1
D1 W1
W1 MN

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LONG/BUY Example
This is a trade taken on the USDJPY currency pair on the M15 timeframe.

Since we are trading the M15 timeframe, we


begin on the H1 timeframe to identify a
potential trade setup. At point 1 on the H1
timeframe, the 5 SMA of the Highs and the 5
SMA of the Lows are above the 50 EMA.

At point 2 we have a bar that closes above the


5 SMA of the Highs. At this point we may
switch to the lower timeframe and identify our
entry level.

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

At point 3 the 5 SMA of the


Highs and the 5 SMA of the
Lows are both above the 50
EMA. At point 4, we have a
bar that closes above the 5
SMA of the Highs so we may
now enter a Buy trade at the
open of the next bar. At point
5 we set a Stop Loss at the 5
SMA of the Lows.

At point 6 we set a Take Profit


at two times the size of our
Stop Loss. With this trade
there was no chance to exit
early as no bars closed below
the 5 SMA of the Lows.

At point 7 we could have


moved our Stop Loss to breakeven but as you can see we were taken out
in profit a few bars later. Excellent trade!
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Now lets take a look at the rules for sell/short trades:

SHORT ENTRY RULES:

1. On the higher timeframe the 5 SMA of the Lows and the 5 SMA of the
Highs should be below the 50 EMA (see timeframe combinations below).
2. On the higher timeframe, wait for a bar to close below the 5 SMA of the
Lows.
3. Switch to the lower trading timeframe (see timeframe combinations
below) and confirm that the 5 SMA of the Highs and the 5 SMA of the Lows
are both below the 50 EMA.
4. Wait for a bar to close below the 5 SMA of the Lows then enter a Sell
trade at the open of the new bar.
5. Set a Stop Loss at or above the 5 SMA of the Highs.
6. Set a Take Profit at two times the size of your Stop Loss (2:1
Risk/Reward Ratio) or exit the position manually when a new bar closes
above the 5 SMA of the Highs.
7. Move your Stop Loss to breakeven when price reaches 50% of your
Take Profit.

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


timeframes that are part of the Forex Trend Directive system.

On the right side we have the Higher timeframes used to identify potential
trade entries and on the left side we have the Lower timeframes where we
place our trades.

M1 M5
M5 M30
M15 H1
M30 H4
H1 H4
H4 D1
D1 W1
W1 MN

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

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SHORT/SELL Example
This is a trade taken on the EURUSD currency pair on the M15 timeframe.

Since we are trading the M15 timeframe, we begin


on the H1 timeframe to identify a potential trade
setup.

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


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

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


SMA of the Lows. At this point we may switch to the
lower timeframe and identify our entry level.

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

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


SMA of the Lows are both below the 50
EMA. At point 4, we have a bar that closes
below the 5 SMA of the Lows so we may
now enter a Sell trade at the open of the next
bar.

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


of the Highs and at point 6 we set a Take
Profit at two times the size of our Stop Loss.

Once again, with this trade there was no


chance to exit early as no bars closed above
the 5 SMA of the Highs.

At point 7 we could have moved our Stop


Loss to breakeven but as you can see we
were taken out in profit a few bars later.
Another excellent trade!

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Installing the Template

The installation of Forex Trend Directive chart template is actually very


easy, as it comes with an autoinstaller which will take care of everything for
you. After you download ForexTrendDirective.zip, if you have Windows 7 or
higher you can either right click on the file and choose Extract or simply
double click to open it. If you have a Windows version prior to Win 7, youll
have to download a free tool for extracting zip files, like WinRar.

After youve opened (or extracted) the downloaded archive, simply double
click on the ForexTrendDirective.exe file inside to start the autoinstallation
process. If you get a security warning, click Run. If you get a User
Account warning, click Yes. First, youll be prompted with the main
installation window, where you can simply click Next.

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Next step is to read the licence agreement, check I accept this agreement
and click Next

Next step is to select the MT4 folders in which you wish to install the
software. If your broker/platform is installed, but not showing up, you can
use the Add a MetaTrader folder button to manually select the folder
where your platform is installed. After that, hit the Next button.

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For the next three steps, you can just click Next and the indicator will be
installed for you. Simply click Finish and youre done.

If you open your MetaTrader4 platform, open a new chart then click on the
Templates button, you should see Forex Trend Directive there. Simply click
on this item to apply the chart template to your chart.

And thats all there is to it! You should now have the ability to apply this
system to any chart and identify trade signals whenever the conditions for a
Buy or Sell trade have been met.

At this stage you should have a good understanding of how the Forex
Trend Directive trading system works and you should be ready to start
applying it on your own. As with any other trading system out there, trading
the system does require practice and discipline on the part of the trader but
with a little time and effort, you too can enjoy the benefits of this system.

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Conclusion

You will notice that the examples used in this manual show trades taken on
the H1 and M15 timeframes. These are the timeframes that I personally
enjoy trading with this system but it can be applied to all timeframes and all
currency pairs with similar results.

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


trades only during the most active trading sessions and avoid trading
during range-bound conditions. When trading on the higher timeframes you
will find that signals occur less frequently but you can be sure that that
signals tend to be a lot more reliable and less prone to whipsaw. Avoid
entering trades when the Moving Averages appear to be flat or in a ranging
pattern (i.e. moving horizontally). The best trades can be found in areas
where the Moving Averages are sloping either upwards for Buy trades or
downwards for Sell trades. In cases where you find that your Stop Loss is
too large it would be better to skip or avoid the trade. For example, if you
are trading the 15 minute timeframe, a Stop Loss of 50 pips is simply too
large and you should not enter such a trade.

It is strongly recommended that when trading this system you use a Risk to
Reward Ratio of 1:2 or greater. In the examples you have seen that I tend
to prefer the RR Ratio of 1:2 to suit my trading style. You are welcome to
use a maximum RR Ratio of up to 1:4 with this system for the best results.
Using trailing stops and exit strategies that allow you to move your Stop
Loss to breakeven when in profit also have a positive effect on the systems
performance. I know that you will enjoy trading this system either as a
standalone technique or an additional filter as part of a larger system. Once
you have mastered this system I am certain that you will enjoy similar
success. I wish you the very best in your trading adventures!

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