1. All members will receive 'System 1: Evening Signals' via e-mail 5 evenings per week evening (Sunday through to Thursday) at approximately 17:30 US EST (New York time). That is at approx 22:30 GMT/23:30 CET. The timing changes by one hour when daylight saving time is introduced and withdrawn as not all cities are synchronized with this practice. Therefore there are periods when the report will be issued at 21:30 GMT. Please check time and date for further info.

2. The System 1 report will look similar to the example below, however the actual FX Pairs detailed by the report may vary. Note: the Sunday report may be issued anytime between Friday evening and 17:30 US EST (New York time) on Sunday.

   WED	25/02/2009	TRADE ENTRY	PROFIT TARGET 1		PROFIT TARGET 2		TRADE STOP		FX PAIR
   FX PAIR	TRADE	LIMIT ORDER PRICE	LIMIT ORDER PRICE	PIPS PROFIT	LIMIT ORDER PRICE	PIPS PROFIT	STOP ORDER PRICE	PIPS LOSS	RELATIVE STRENGTH	TRADE ORDER STATUS
   USDCHF	LONG	1.1678	1.1730	52	1.1743	65	1.1529	149	2.0000	PENDING
   EURUSD	NONE	NULL	NULL	NULL	NULL	NULL	NULL	NULL	-1.0000	NO TRADE
   EURGBP	LONG	0.8925	0.8968	43	0.8978	53	0.8795	130	2.0000	PENDING
   EURCHF	NONE	NULL	NULL	NULL	NULL	NULL	NULL	NULL	1.0000	NO TRADE
   GBPCHF	SHORT	1.6667	1.6571	96	1.6548	119	1.6867	200	-1.0000	PENDING
   GBPUSD	NONE	NULL	NULL	NULL	NULL	NULL	NULL	NULL	-3.0000	NO TRADE
   AUDUSD	NONE	NULL	NULL	NULL	NULL	NULL	NULL	NULL	1.0000	NO TRADE

• FX PAIR

  The FX PAIR column details each of the seven FX Pairs for which trade signals are provided.

   

• TRADE

  For each FX PAIR listed, the TRADE column details:

NONE - This means there is no trade signal

LONG - This means the trade signal is to Buy

SHORT - This means the trade signal is to Sell 

• TRADE ENTRY

  The TRADE ENTRY column details the target market price at which the trade should be entered. This is normally achieved using a Limit Order, however it can also be achieved by direct entry into the market if an improved entry price can be achieved.

   

•  PROFIT TARGET 1

  This is the first target for the trade and represents 80% of the profit target 2. This represents a key stage in the trade where you may choose to perform some trade management:

   

  • Take the full profit on the trade, or

  • Take half of your position as profit and allow the remaining half to continue.

  • Adjust the Stop Loss to the Entry Price in order to prevent against trade reversal (advisable if continuing)

   

• PROFIT TARGET 2

  This details the second profit target price and number of pips. This may be taken automatically by setting a TRADE LIMIT order. However, if a trader wishes they may decide to hold the trade open longer to attempt to build a position and take greater profit. However traders must beware not to be greedy and risk the chance of price reversal.

   

• TRADE STOP

  The TRADE STOP column details the market price at which the trade should be closed at a loss, this is achieved with an automated Stop Loss order.

   

• FX PAIR RELATIVE STRENGTH

  The STRENGTH details the relative strength of the FX Pair. Positive represents that the overall cross currency strength is greater than that of its counter currency, Negative represents the opposite. You will notice that LONG trades only occur when the Strength is not negative, SHORT trades only occur when the Strength is not positive. However, this information is provided for information only and requires no specific action.

   

• TRADE STATUS

  TRADE ORDER STATUS is merely an indication of the trade status:

   

  • PENDING indicates that the result of the trade is  not yet known

  • NO TRADE indicates that there is no trade

PLACING THE TRADE

1. The trade orders can be placed as soon as possible after receipt of the trade report, however some traders may wish to adapt their entry to an improved price as it occasionally possible to achieve an improved price the following morning. One strategy to consider is to place half of your position at the given Entry Price, and wait to place the other half position if an improved entry price can be achieved.

2. The system performance assumes placing every trade order. Attempting to 'cherry pick' the best trades is not recommended as it may result in picking losing trades and missing the winning trades.

3. If you do not want to trade all of the trades due to the size of your account it is best to either, pick certain pairs and always trade those pairs until your account is of a sufficient size to allow you to trade more, or trade with a sufficiently small trade amount in order to avoid to high a risk against your account. Always be mindful of your account size and never over leverage your funds.

NOTE: If you need an account with flexibility to place multiple trades down to 10p per pip, follow this link to OPEN a Spread Betting Account.

4. The trade orders are setup through placing a LIMIT ORDER at the TRADE ENTRY price specified, with associated PROFIT LIMIT ORDER and LOSS STOP ORDER at the price levels detailed.

5. If using a Spread Betting account, the Profit and Loss order levels may be specified by PIPS PROFIT and PIPS LOSS value.

6. OBTAINING AN IMPROVED ENTRY PRICE -  The exception to using the TRADE ENTRY price via LIMIT ORDER in order to enter the trade is where at the time of attempting to enter the trade it is possible to achieve a better entry price.

   - For a LONG trade this occurs when the market price is lower than the TRADE ENTRY price.

   - For a SHORT trade this occurs when the market price is higher than the TRADE ENTRY price.

   In this case the trade may be taken at the actual/best market price and for the associated PROFIT - LIMIT ORDER and LOSS - STOP ORDER there are two options:

    

   • OPTION 1- Increase the target profit/reward and reduce the potential loss/risk.

     For SPOT TRADE ACCOUNTS, set the PROFIT LIMIT ORDER and LOSS STOP ORDER exactly in accordance with the price detailed in the report.

     For SPREAD BET ACCOUNTS, adjust the number of pips for the PIPS PROFIT and PIPS LOSS by the number of pips difference between the specified TRADE ENTRY price an the actual entry price.

   OR

   • OPTION 2 - Maintain the target PROFIT/LOSS RATIO

     For SPOT TRADE ACCOUNTS, adjust the PROFIT LIMIT ORDER and LOSS STOP ORDER by the number of pips difference between the specified TRADE ENTRY price an the actual entry price.

     For SPREAD BET ACCOUNTS, set the PIPS PROFIT and PIPS LOSS exactly in accordance with the price detailed in the report.

   We prefer to use OPTION 2 as this increases the probability of the trade achieving its profit target, compared with OPTION 1.

7. TRADING MULTIPLE POSITIONS Trading with multiple positions gives the trader an added level of flexibility when managing their trade positions. For example:

   Placing one half of the trade via the specified entry order and then taking the second half position later if an improved price can be achieved reduces the risk of loss against the full trade as you may win with the second position even if the first position loses.

   Entering the market with two half positions, each with different profit targets, where you may take the profit for the first position at PROFIT TARGET 1 and the second position you may take at PROFIT TARGET 2 or even leave it open to try and capture and additional profit. When performing this technique it usually considered advantageous to adjust the STOP LOSS Order as described above.

   On some occasions the market price can be very close to the given TRADE ENTRY Price at the time the trade orders are placed. It can be advantageous, particularly when a trend is developing to avoid the possibility of missing the entry of a potentially winning trade. In this case half of the trade can be taken at the best available market price (worse than given in the report) when placing the trade orders. The second half position is taken via a limit order at an improved position by the same number of pips to that already given away, thus averaging the trade entry to the original TRADE ENTRY Price. This is the only occasion where we may enter the market at a worse price than specified and in this case both trades should utilise the target profit and stop levels given.

8. In the unusual event that there is extreme volatility for a currency pair, causing price to change very quickly such that at the time the report is received (i.e. at approx 17:30 US EST) the price action is close to the Stop (loss) price, the trade should not be taken until the price action has stabilized.

9. When the trade orders have been submitted, they should be checked periodically to see if the trade entry has been triggered. This does not need to be any more frequent than every 4 hours (e.g. Check first thing in the morning and then every few hours thereafter but can be as frequent as is practical.

10. If the trade entry order has not been triggered by approx. 12:00 GMT the following day, or after the trade was issued the market price has moved a significant distance away from the entry price (this would usually be past the profit target) then the trade entry order and associated limit and stop orders should be cancelled. Note. It may be possible to automate this when entering the trade as some brokers offer the option to specify the 'Order Good Until' option.

1. Once a trade entry order has been activated/triggered, the trade may be left until it triggers either the Limit (Profit) order or the Stop (Loss) order. This typically takes between 8 and 48 hours.

2. During the time where the trade is active it is important to be patient and allow the market price action to develop. This may include periods where the trade is negative but it is important not to panic as this is normal. The trade Limit (profit) and Stop (loss) orders have been calculated to optimize profits and minimise and therefore our system assumes that in the majority of cases the trade should be allowed to reach  PROFIT TARGET 1 without intervention.

3. When an open trade is in a negative/losing position we do not normally close the trade early to take a loss as this would negate the Stop Loss previously set. However if a trader is particularly concerned regarding the trade status and wishes to exit the trade they should try to achieve as close as possible to break even. This is most relevant where a new trade signal is issued contrary to an existing open position.

e.g. If we are in a 'Short' position for EURUSD, and the following evening EURUSD is signalled 'Long', we will place the entry order for the new trade and at the same time move the Limit order to exit the previous Short trade at or close to the entry price.

4. When an open trade is in a positive position it can be useful to manage/adjusted the trade in order to either trap in profit or reduce the risk of loss:

   • EARLY CLOSURE A trade can be closed manually if the trader notices that the current market price is very close to the profit limit order price, or if the trader simply wishes to exit the trade and take some profit. Note. we do not normally employ this tactic unless the price is between PROFIT TARGET 1 and PROFIT TARGET 2. The trader should be aware that whilst it is better to take some profit rather than take a loss, if winning trades are closed out too early there will be insufficient profit to cancel out the losing trades.

   • MOVING THE STOP LOSS When the trade has advanced to the PROFIT TARGET 1 price, if a trader wishes to advance to PROFIT TARGET 2 before taking profit it can be useful to move the STOP LOSS Order to the TRADE ENTRY price, such that if the trade does not reach the profit target and reverses there is no risk of it becoming a losing trade. NOTE: Move the stop too close to the current price may risk closing the trade early during normal price activity.

1. Trading the FX market via a leveraged account is a high risk activity and therefore money management is an essential aspect of operating a Forex account and is ultimately the responsibility of the individual account holder. It is recommended that an account is not 'over leveraged' and that trade lot sizes are scaled according to the account size and number of trades which could be placed at one time. Never exceed 4% risk of the trade account for any single trade and never place so many trades that it could result in a margin call, which result in liquidating open trades in order to avoid entering into an overall account deficit. NOTE: When trading multiple positions to manage a single trade it is important to divide the risk across these positions, making a two half position trades.

2. It is important to understand that it is impossible to trade without making some losses. Sometimes the losing trades all come at the same time and can occasionally result in a daily deficit a several hundred points. Over the course of each month it is expected, but not guaranteed, that the wins will cancel out and exceed the losses.  NOTE: Examining the trade history will give you an insight into the typical daily variations in trade success and its effect on the pip balance.

3. Be consistent with trade sizes, only increasing your trade size when your account has grown sufficiently to sustain any losses at the new increased rate. A good strategy is to index your trade risk to a fixed % risk of your account. We recommend 2-3% of the account balance but the lower the risk the better. This means that the amount traded for each trade will vary based on the account balance and the number of pips to be risked:

   Trade Size = (Account Balance * 2%) / No. of Pips Risked

   e.g. If the account balance was £25000 and the Risk was 200 pips The trade size would be:

   £25000 * 2% = £500

   £500 / 200 pips = £2.50 per pip

   Using this method it is possible to accurately control risk with strict discipline and grow your account accordingly when there are winning trades. The amount traded will grow as your trading account grows and vice versa.