1. The FX-System 2 reports are usually issued between 07:30 GMT and 16:30GMT, however there is no set time and some days there may be no signal reports issued.

2. The FX-System 2 report will look similar to the example below, however the actual FX Pairs detailed by the report may vary.

• ITEM

  The ITEM column details the FX Pairs for which trade signal is 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 

• ENTRY

  The 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

  The PROFIT column details the target profit for the trade, set using a Limit order.

• STOP

  The 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.

   

PLACING THE TRADE

1. The trade orders can be placed as soon as possible after receipt of the trade report.

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 some intermediate point and leave the second open to try and capture additional profit. When performing this technique it usually considered advantageous to adjust the STOP LOSS Order.

   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 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 monitored regularly to see if the trade entry has been triggered. This does not need to be any more frequent than every 15 mins.

10. If the trade entry order has not been triggered by approx. within 2 hours of the signal 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 either until it triggers the Limit (Profit) order or the Stop (Loss) order, or the trade can be closed out manually at some suitable point befor ethe end of the trading day (17:30 EST).

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.

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 a subsequent  EURUSD trade 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 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 at lease 60%-70% of the target. 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 70% of the target 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.