Explosive Profits
Revised Edition
“Pre-Released” version published on October 24, 2004.
This is a “draft” copy of the Revised Edition of “Explosive Profits” temporarily published in the Resources Section. There are still a few things I need to do to “polish it up” (so please ignore any typos and grammatical errors). I will soon be packaging this eBook into the downloadable eBook file so that you can download this onto your own computer. I am now writing a new eBook titled “FOREX Sailing” (this will be a fantastic eBook that I’m sure you’ll love – a little about this eBook is written below) and want to release them together (simultaneously at the same time). Both the Revised Edition of “Explosive Profits” and the new “FOREX Sailing” will be a free upgrade to all the members of the Resources Section (download instructions will be inside the Resources Section when it is released). The reason why I am not releasing this eBook in the AFS downloadable bundle now is because I want to release both eBooks together due to the fact that I am sure that I will get flooded with emails for help requests to do the unlock of the eBooks. I simply would rather go through all the hassles once rather than twice in a short period of time. In the mean time enjoy reading the new “Explosive Profits” online, and soon you’ll have it on your home computer.
FOREX SAILING – Here is a little blurb about “FOREX Sailing”, the new eBook that I am now writing for you. Again, this will be a free upgrade for all members of the Resources Section.
Would you like to know how to trade the FOREX market “working” only 10 minutes a day? It doesn’t matter when you do this “work” – before going to your job, after coming back home, or any time convenient for you. Seriously, you don’t have to sit in front of your computer watching and waiting for a good trading opportunity to happen. You simply do a few simple steps whenever convenient for you to make $200 to $3,000 profits! Enjoy being a profitable FOREX trader on your own time schedule on your own terms. No complicated methods, just easy steps to follow. “FOREX Sailing” will teach you how simple this can all be!
© 2004 Evergreen Forex Inc. All Rights Reserved. No part of this document may be reproduced by physical, mechanical or electronic means, nor resold without the written permission of Evergreen Forex Inc. “Explosive Profits” is a module of the “Amazing FOREX System” package. INTRODUCTION
Welcome to the Revised Edition of “Explosive Profits”. In this module you will learn how to capitalize on “Explosive” market moves that happen very often in the FOREX markets. You will learn how to anticipate when they will happen, and most importantly, what to do to let the “explosion” propel your profits! With this strategy you won’t need any complicated indicators that may confuse you. Follow the simple step-by-step instructions contained in this module and you too can experience successful trades – very profitable!
This module has come bundled with other eBook modules part of the “Amazing FOREX System” package. It is extremely important that before you read this module that you first read “FOREX Surfing”. It is a prerequisite to read “FOREX Surfing” before the revised edition of “Explosive Profits” as several of the concepts taught in FOREX Surfing are used as part of this strategy, and the explanation of the concepts will not be repeated here. You will find references to the concepts, techniques, and variations of “FOREX Surfing” throughout this module. In this module I will simply assume that you understand certain basics such as how to look at charts, how to read candles, and many of the topics covered earlier. Please feel free to stop reading at any point to go back to refer to the appropriate section of “FOREX Surfing” if you need clarity on any point. At several points throughout this module I will ask you to go back to review certain sections within FOREX Surfing.
What do I mean by an “Explosion”, why do they happen, and why do they provide some of the absolute best trading opportunities in the FOREX markets? This is a three-part question; let’s look at each part individually.
What is an “Explosion”?
Take a look at your charts, say the hourly charts of virtually any currency pair. What you will notice is that there are periods of time that the prices move relatively slowly, bouncing around a bit. Sometimes the prices move sideways (consolidation), and sometimes they may appear to trend a little. Then every few days (more or less) you’ll see that the prices just explode! You see slow moving small candles then all of a sudden WHAM you see either a big candle, a few big candles, or even a series of smaller candles moving steeply (up or down). These are what I refer to as “Explosions”. Often the “explosions” move 50, 100, 150 pips and sometimes even more in a very brief period of time (from minutes to a few hours).
Take a look at the following chart (EUR/USD hourly) to see some examples of explosions that happened over the past 30 days. The arrows point to some of the explosions.
Stop reading for a few minutes and go take a look at your charts (1 hour over 30 days). Look at several currency pairs (i.e. EUR/USD, GBP/USD, USD/JPY, USD/CAD, and others). What you will notice, regardless of when you look at your charts, is that you will see many times that these kinds of explosions happened. You should also notice that they happen often (showing you that these profitable opportunities happen regularly).
Why do these “explosions” happen?
Most often these “explosions” happen after “Fundamental Announcements”. Here I will briefly explain what they are (they have been discussed previously in FOREX Surfing, and will be discussed further in this module).
Countries regularly release information about various economic topics pertinent to that country. They report on such topics as Interest Rates, Unemployment Rates, Gross Domestic Product, Inflation, and other such data. When this “fundamental” news is announced the markets usually react by strengthening or weakening the currency depending on the news (good news makes the currency stronger, bad news drives it weaker).
Sometimes the market may react to other news not directly pertaining to the country’s economic data. For example, when the US caught Saddam Hussein the market moved over a hundred pips (out of the weekend). Significant natural disasters or other catastrophes may rock a currency, as can other news, but most often the effects are temporary and relatively small. There is no way to predict these sporadic market events, and you won’t be focusing on these at all. The primary events that you will be focusing upon are the Fundamental Announcements released by various countries.
Why do Fundamental Announcements provide some of the absolute best trading opportunities in the FOREX markets?
As we have just briefly discussed, Fundamental Announcements account for most of the significantly large market moves. In general (but not always) the markets move relatively slowly when not affected by Fundamental Announcements, thus giving small profit opportunities. Immediately, and for a while after a significant Fundamental Announcement the markets move strongly, thus providing great profit opportunities.
Usually Fundamental Announcements are released at a scheduled time. This means that you can know days in advance when a potentially great opportunity will happen… to the minute! This is like having a magic crystal ball to know when you should pay attention to the markets to capture your profits.
The bottom line is that Fundamental Announcements (we’ll call them FAs for short) are what moves the markets, and knowing how to use them to your advantage will empower you to capitalize on some of the absolute best trading opportunities in the FOREX markets. In this module you will learn how to determine exactly when these great opportunities will happen, and how to jump in on them.
Please go now to reread “Part 8” in “FOREX Surfing”. You need to review Fundamental Announcements, Looking at the FA Calendar, Key Announcements, and the section on Additional info for the USA (USD). Also reread about “Market Overlap” in “Opportunity 2”. When you have finished reviewing those sections then return to this point in this module to continue reading.
By having reviewed the sections from the above “Review Point” you should now be aware of how to find potential trading opportunities.
Inside the Resources Section I regularly post a “cheat sheet” of potentially good FAs for the upcoming week, along with a few currency pairs that may be affected by the news.
Once you have determined when you suspect a good trading opportunity will present itself then plan accordingly to be available to trade during those times.
The FOREX markets are open 24 hours a day during the week days, and so such opportunities may happen at various times of the day depending on what time zone you happen to be in. This will mean that some of the trading opportunities will occur at times that are convenient for you, and some of the trading opportunities will happen while you are at work (at your JOB that you hope to quit), or while you are normally sleeping.
AT WORK - If you are fortunate enough to work someplace that provides you with a computer (connected to the internet) then you may be able to discretely monitor the charts and place trades during these times. (Please do so carefully. If you actually do this then remember you are choosing to do this and I assume absolutely no responsibility if you get caught and any repercussions such as you getting fired.) What may be better, if possible for you, is that you bring a laptop computer to work and, again if you can, then schedule your break time to coincide with the trading opportunity time. Hopefully you’ll have some way of connecting your laptop to the internet during your break time (such as at a local internet café, or maybe your place of employment already has internet or a phone line you can connect through a dial-up modem to the internet). Schedule your work break time to start a few minutes before the anticipated FA (so you have the time to turn on your computer and to access your charts & trading station). Your “break” should last a minimum of 15 minutes, though longer would certainly be better. During this time you should (hopefully) spot a suitable opportunity to trade the “Explosive Profits” strategy, and be able to trade according to one of the variations (as explained further in this module). Most likely you will set a conservative profit limit for your trade since you won’t be able to monitor your trade. Later on (during another break, or when you get home after work) you can check to see what happened with your trade (hopefully you would have profited).
DURING THE NIGHT – Depending on where you happen to live you will find that some of the opportunities happen during the middle of the night for you. That’s ok as this situation is much easier to get around than if it happens while you are at work (especially if your boss is grumpy about allowing you breaks to do your trades). If you need to then plan to go to be a little earlier (so that you’ll still be fresh in the morning), and set your alarm clock to wake you up five to ten minutes before the trading opportunity. Make sure you set your mind that you’ll get up as soon as the alarm goes off so you don’t miss your trading opportunity (and so the repeating alarm doesn’t annoy your spouse). Explain to your spouse what you are doing so that s/he will be understanding to you waking up in the middle of the night. The explanation that works for me (on my wife) is that I’m getting up to make more money that she can spend (this motivates her to kick me out of bed to go trading *wink*). If you are new to trading your spouse may be somewhat less than supportive of you doing this (since the alarm will also wake him/her up too), but after your spouse sees the profits that you make from many of those nights then s/he’ll be more supportive of you doing this. After you wake up then go to turn on your computer, your charts and your trading station to get ready for the trades. Several minutes later you will (hopefully) spot a good trading opportunity to jump in on. Once you have entered a trade then you can either set a conservative profit limit and go back to bed (check the results in the morning), or you may choose to baby sit your trade for a while (your choice, but remember to get sufficient sleep so that you are functional in the morning).
CONVENIENT TIMES – Obviously, if a trading opportunity happens during a time that is convenient for you to trade then you’ll be able to fully utilize these techniques without any further suggestions. Many people find, for example, that some excellent trading opportunities happen before (or after) work hours. You may need to adjust your schedule a little bit to fit in your trading, but if you are making some great profits then you’ll probably find it easy to accommodate your schedule around your trading.
Make sure you have finished reading “FOREX Surfing” as trading Explosions uses those techniques. In this module I will cover specific situations and variations, but I will assume that you are very familiar with the “Surfing” techniques. Please take the time to review “Part 3” (all of the “Surfing Basics” and variations), and “Opportunities” 3 and 4 in “Part 6”.
Trading the “Explosions” using the “Explosive Profits” technique is really quite easy, and profitable. With some practice (in a demo account) you will find that you will regularly pick up some nice profitable pips. Seriously, focusing on this technique alone can make you serious profits, and a serious income! Once you have practiced this technique enough you will become quite skillful, and confident in your abilities to CONSISTENTLY pull out great profits from the FOREX market. Take the time to focus on this technique and you will be glad you did!
Ok, how to do it – here I’ll cover the basics of the “Explosive Profits technique. Later I will go over variations and other topics of concern. This section is to give you the general overview.
Let’s say you believe that a particular FA (or grouping of FAs) may result in a market move at a particular time. Let’s say the time of the anticipated FA happens to be, for example, 12:30 GMT (By now you should know what GMT is, and how to convert it into your local time. Inside the Resources Section you will find a link that helps you to convert GMT to your local time.). If you are not already at your computer ready to trade then at 12:20 GMT you should go to turn on your computer and open your charts as well as your trade station. You want to ensure that you have enough time for your computer to boot up before the FA time.
At this point you want to turn your charts to display the one-minute candles of the currency pair(s) you plan to trade (we’ll talk more about this later in this module, along with variations of the techniques).
Now you sit and watch to see what happens. The FA calendar is like your magic crystal ball to tell you when significant market moves can occur, but it won’t tell you in which direction it will go. The next few minutes will reveal to you the direction (up or down) so that you will be able to place your trades.
What you will notice is that within a few minutes after the FA has been released that the market will begin to move. Sometime the market responds with violent movement, and sometimes it’ll be much small (we’ll discuss these situations later). As soon as you witness the market moving then you need to be prepared to act quickly (being tanked up on coffee may help you to act quickly).
Let’s take a look at a chart to see an example of what might happen.
EXPLOSION EXAMPLE 1
In this example you can see that before the release of the FA the prices were just bouncing along in sideways consolidation movement. A minute after the scheduled release time you see that the prices just shot up (A). Shortly after the shoot up of the price you see a wave formation happen (up to B, then fell down to C). After the prices have started to go back down below “B” then you place your entry order at “B” (as explained in the “FOREX Surfing” manual). Initially you might place your stop 20 down, but as soon as your order crosses over point “B” then you would replace your stop to be at “C”. At point “D” you might want to consider adding an extra trade (doing the “Compounded Gains” as explained in “Opportunity 10” in the Surfing manual). You would then either proceed to trail your stops for maximum profits, or you could simply set your limit order for 20 pips if you have to leave your computer (if you need to return to work or go to bed).
Let’s look at another example.
EXPLOSION EXAMPLE 2
Sometimes the FA doesn’t create an explosion, but WOW does it ever make the market move! After having read the FOREX Surfing manual you should be able to just look at this chart and see how you could have surfed it (even doing compounded gains!). This chart shows you what happened over 3 hours (inside the Asian/European overlap time), and how it moved over 100 pips!
Let’s look at a couple more.
EXPLOSION EXAMPLE 3
In this chart you see the initial explosion (A) reach up to “B” and then drops to “C”. At this point you would have placed a buy entry order (at B). If you placed a limit order (because you had to return to work or go to bed) then you certainly would have gotten it. If you were trailing your stops then you would have exited for profit at “D”. But notice how over the next couple of hours the price kept on creeping up? You could have caught some of that too. How? You could have put a buy entry order above the red resistance line (F). “E” would have been used as your stop. In this example notice that “E” is also the 62% fibonacci retracement suggesting that the market should reach 1.8097 (which it of course exceeded).
Let’s take a look at another example of what could happen.
EXPLOSION EXAMPLE 4
Uh oh. You got a whip. What do you do now? (By now you should have realized that each of the chart examples are specifically chosen to illustrate different scenarios). In the old version of “Explosive Profits” whips were the bane of our trading existence. We whined and complained whenever confronted with a whip (because it caused us to loose some pips). Well, guess what, whips will continue to aggravate us from time to time, but not to worry, most times you’ll quickly recover from the whip and you will often be able to profit thanks to them! In a nutshell you will find that you’ll manage to avoid most of the whips because of how the REVISED edition of Explosive Profits works (some have even said that they consider the Revised version to be more profitable than the original).
Let’s look at the above whip (later we’ll look at another type of more typical whip that you’ll encounter).
In this above example you would have entered at point “A”. The high/low of that blue candle is 10 pips apart. Initially you would have placed your stop at 20 pips, and by following the “Surfing” system you would have pulled up your stop to the top of that down-wave (thus your stop would have been 10 pips plus your spread, say 15). Obviously a few minutes later you would have been stopped out to loose those 15 pips (don’t cry about it, losses are a p...
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