The Financial Turning Point

Forex trading technique

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The Financial Turning Point

Forex trading technique

Copyright©2011 – Expert4x. ALL RIGHTS RESERVED. This ebook is intended for the purchaser’s personal use only. No part of this eBook may be
reproduced or transmitted in any form whatsoever, electronic, or mechanical, including photocopying, recording, or by any informational storage or retrieval
system without express permission from Expert4x.

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Table of Contents

INTRODUCTION ........................................................................................................................................................ 5
Welcome .............................................................................................................................................................. 5
Examples of Test Trading results achieved to date ................................................................................................ 7
The Financial Turning Point Forex Trading Technique ............................................................................................ 9
How to make MONEY using the Financial Turning Point Forex Trading technique ............................................... 10
Review And Learn The Technique ................................................................................................................... 10
Start Testing The Financial Turning Point Technique In Demo.......................................................................... 10
Optimising Your Trading Results ...................................................................................................................... 10
Start Trading The Financial Turning Point Technique Live ................................................................................ 10
BUILDING BLOCKS OF THE TECHNIQUE ................................................................................................................... 11
The Moving average ........................................................................................................................................... 11
Settings ........................................................................................................................................................... 11
The ANGLE of the moving average .................................................................................................................. 14
The Moving Average HOOK or BEND ............................................................................................................... 15
The Moving average crossover Exit ................................................................................................................. 16
Improving the results you achieve with the Moving Average signals................................................................ 17
The RSI momentum indicator.............................................................................................................................. 18
RSI Settings ..................................................................................................................................................... 19
Overbought and oversold areas ...................................................................................................................... 20
HOOKS and BENDS .......................................................................................................................................... 20
Momentum Divergences ................................................................................................................................. 21
When not to trade RSI signals ......................................................................................................................... 22
Alternative RSI settings ................................................................................................................................... 24
Chart setup ......................................................................................................................................................... 25
Individual charts.............................................................................................................................................. 25
Screen setup ................................................................................................................................................... 26
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Trading signal chart setup ............................................................................................................................... 28
Templates ....................................................................................................................................................... 29
Time frames........................................................................................................................................................ 30
Slippage .......................................................................................................................................................... 30
Get the entry price first ................................................................................................................................... 30
15 and 5 Minute timeframes ........................................................................................................................... 30
1 Hour timeframes .......................................................................................................................................... 31
4 Hour time frames ......................................................................................................................................... 31
Daily time frames ............................................................................................................................................ 31
The best times to trade the technique are....................................................................................................... 31
Currency selection .............................................................................................................................................. 32
Dollar dominance ............................................................................................................................................ 32
Currency Families............................................................................................................................................ 32
TRADING THE TECHNIQUE ...................................................................................................................................... 34
Entries ................................................................................................................................................................ 34
Exits .................................................................................................................................................................... 36
Moving Average crossover Exits ...................................................................................................................... 36
Signals to Trade the other way ........................................................................................................................ 37
Low momentum exits ..................................................................................................................................... 37
Target based exits ........................................................................................................................................... 38
Stop threatening exits ..................................................................................................................................... 38
Time Based Exits ............................................................................................................................................. 38
Weekend exits ................................................................................................................................................ 38
Partial Exits ..................................................................................................................................................... 39
Stops .................................................................................................................................................................. 40
Large Recommended stops ............................................................................................................................. 40
Safe guarding your stops ................................................................................................................................. 40
Recommended Stop sizes................................................................................................................................ 41
Position sizing ..................................................................................................................................................... 42
Success Ladder.................................................................................................................................................... 43
IMPROVING YOUR TRADING PERFORMANCE .......................................................................................................... 45
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Indicator adjustments ......................................................................................................................................... 45
Multiple timeframes ........................................................................................................................................... 46
TIME FOR ACTION ................................................................................................................................................... 47
MORE INFORMATION AND SUPPORT ...................................................................................................................... 48

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The Financial Turning Point Forex trading technique

INTRODUCTION
Welcome
Congratulations on your purchase of the “Financial Turning Point Forex trading technique”. We hope that the
principles of this technique help you achieve your long term Forex trading goals.

Please bear in mind that you have purchased a specific Forex trading technique that is successful because it uses
important money making Forex strategies in one technique to make it successful. These are

A Risk management strategy

A Position sizing strategy
An Exit strategy
An Entry strategy
A currency selection strategy
A transaction management strategy
An account growth and protection strategy

Please do not make the mistake that so many Forex traders make and that is to believe that the entry is all that
matters. Having the skills to apply all of the above strategies is vital to the success of this technique.

The building blocks that make up the above strategies are not unique and many traders may find the overall
approach quite simplistic. The hard part of this technique is to actually trade the technique for at least 30 trades
using the specific strategies outlined in the supporting material. If you do that you will be in the top 1% of Forex
traders who actually apply what they have learnt, when purchasing forex trading techniques.

Your first 30 trades should have a very positive impact on your trading account. In the unlikely event that they
don’t, we have also supplied you with a number of strategy optimisation methods which you can use should you
find that the technique does not meet your personal expectations. These strategy optimisation methods will make
you the master of your own destiny as you will be able to customize and optimise the strategy to your own
requirements.

At Expert4x we constantly get enquiries for systems which can be used for both longer term position trading as well
as shorter term session trading (2 to 3 hours). The technique you are about to experience uses universal
momentum and trending principles that can be applied to most time frames.

We are also attempting to use a basic approach that is simple enough for a beginner but yet profitable enough so
that experienced traders can not ignore it.

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Many of you may be familiar with some of the techniques used by Expert4x. The indicators used are the same as
those used in most techniques marketed by Expert4x, but that is where the similarity ends. The signals and
approach we use in the Financial Turning Point are quite unique. The complete Financial Turning Point Forex
trading technique consists of a number of strategies which make it a stand alone technique on its own merits. You
will also note that there is no need for knowledge or for the application of trendlines and support and resistance
levels using this approach.

The Financial Turning Point Forex trading technique has been Expert4x traded and designed. It is however useless if
it can not be communicated and taught. You will hopefully find the principles used when trading this technique
simple enough to understand and apply. The Financial Turning Point Forex trading technique will have undergone
an intensive 2 weeks user testing process where more than 40 system testers will evaluate the communication,
support and practicality of implementing the Financial Turning Point Forex trading technique. They will also have
done their own trading to ensure the profitability of the technique. Many videos will have been added and changes
made to the eBook to ensure a better understanding of the technique. We also provide regular live support
webinars to answer any questions you may have and to overview the technique. We are concerned about the
quality of the technique and want you to achieve optimal results.

We also include self help technique refinement alternatives which will help you refine the technique according to
your experiences, but more importantly to adapt to the forex market changes.

Expert4x truly believes that this technique could meet the needs of most forex traders as it can be applied to most
time frames. Hopefully it will meet all your needs and become your “Financial Turning Point” technique.

We are going to present the trading technique and most of its trading rules right in the beginning and then spend
the rest of the book explaining why the technique works.

This book has been divided into 5 main sections

1. The Introduction
2. Building Blocks of the Financial Turning Point Forex trading technique.
3. Trading the Financial Turning Point Forex trading technique.
4. Improving your results
5. More information and Ongoing support

In the introduction we have included a step by step approach to implement the technique to the point where you
are making money trading a live Forex account. If you follow this approach you will have the greatest chance of
Forex success.

Please use the support provided (email and webinars) to get assistance to
turn this into your own personal money making forex trading technique.

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Examples of Test Trading results achieved to date

The results below show some of the trading results achieved in testing following the technique detailed in this
book. It shows the potential of the technique. Although a simple technique which is mainly mechanical your results
will depend on how well this technique fits into our own lifestyle, trading experience and trading philosophy.

The results below were achieved using a 4 hour timeframe using 5 currencies. This will give you an idea of how
often trades could occur using this timeframe. 22 transactions in roughly 44 trading days. So 1 transaction every 2
days. To increase or decrease this statistic you would merely add or reduce the number of currencies traded. 2006
pips were made so the average gain is 91 pips per transaction. You will see that stops ranged from 150 to 320 pips.
Although big stops were used no transaction ever risked more than 4% of the total account due to the position
sizing approach used.

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Below are the results using the 15 minute timeframe for 1 week. Mainly the European and US markets were
traded. 12 Currencies were used. 645 pips were generated in the 22 transactions in the 5 days. An average of 29
pips per transaction. Fixed lot sizing was used (not as recommended in the book) and stops were 80 pips. +/- 2% of
the account was risked on each trade

Let’s see if you can achieve similar or better results by perfecting this
technique.

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The Financial Turning Point Forex

Trading Technique

The objective of the

Financial Turning Point Forex
Trading technique is to trade
trend reversals when both
momentum and trending
indicators are signalling the
reversal at times when the
previous trend is most likely
to become exhausted.

The entry strategy uses both a momentum indicator and a trending

indicator to catch and confirm the turning points in the market. The
momentum indicator (RSI set for 7) makes sure that there is enough
volatility in the market and a loss of momentum by only allowing trading
after the price has reached the over bought and sold levels and is
reversing. The moving average (exponential of 3 offset by 3) confirms
the change of trend with a Hook or Turn and can keep traders in the new trend for the optimum time by using a
moving average crossover strategy.

The rules are simple: only trade once the RSI has reached over bought or over sold levels and is retracing. The entry
is when both the moving average and the RSI have hooked or turned back in the opposite direction of the trend,
preferably on the close of a relatively small candle. The stop is placed a fixed amount away from the entry. This
chart shows an example of the entry and exit criteria.

Time of day, currency selection, position sizing criteria apply to all trades (see later in the eBook for details)

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How to make MONEY using the Financial Turning Point

Forex Trading technique
Review And Learn The Technique
1. Read the complete eBook and watch the supporting videos for a complete overview of the technique
2. Review and make sure you understand all the trading functions of the Trending Moving Average
3. Review and make sure you understand all the trading functions of the RSI Momentum indicator
4. Understand the entry and exit criteria
5. Select a timeframe and your initial group of trading currencies
6. Set your charts and trading screens up.
7. Decide on your initial account % risk profile
8. Set up your success ladder with your promotion demotion levels
9. Email any questions you may have to Expert4x
10. Attend regular support webinars where you can ask questions and see examples of the technique

Start Testing The Financial Turning Point Technique In Demo

11. Identify trading signals in line with your chosen timeframe
12. Enter the deals along with your initial stops.
13. Review the market in terms of your trading time frame for new deals and optimised exits.
14. Email any questions you may have to Expert4x
15. Attend regular support webinars where you can ask questions and see examples of the technique

Optimising Your Trading Results

16. Trade at least 30 live Demo trades to create a track record
17. Use your track record to consider changes to your strategy.
18. Trade another 30 live trades after your adjustments and go back to the previous step if required.
19. Email any questions you may have to Expert4x
20. Attend regular support webinars where you can ask questions and see examples of the technique

Start Trading The Financial Turning Point Technique Live

21. Once you have optimised your demo trading, start trading live
22. Trade at least 30 live account trades to create a track record
23. Use your track record to consider changes to your strategy.
24. Email any questions you may have to Expert4x
25. Attend regular support webinars where you can ask questions and see examples of the technique

DO NOT SKIP ANY STEPS IN THIS PROCESS

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BUILDING BLOCKS OF THE TECHNIQUE

The Moving average

A moving average is a single averaged line that traces the movement of the price as it moves thorough the forex
market based on the parameters the user sets. It thus smoothes the movement to a single line and averages the
wild movements one sees when looking at candles or bar charts. The single line creates a dynamic barrier between
the bulls and the bears so that when the price is above the moving average the bulls are said to be in charge and
when the price is below the moving average the bears are in charge.

The moving average used by the Financial Turning Point technique has a few unique qualities which revolve around
the moving averages angle, its behaviour when the trend changes and its ability to act as dynamic support and
resistance.

The Financial Turning Point technique does not use traditional horizontal and non horizontal support and resistance
concepts as the moving average is a dynamic support and resistance barrier. The Moving Average is one of the
prime tools used to keep us out of false reversals.

Settings

The moving average used for this technique is the Exponential moving average of 3 offset or shifted by 3.

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The moving average will look like this when placed on a candlestick chart.

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To explain all aspects of the moving average we are going to use in the Financial Turning Point, we are going to set
the above chart to a bar chart. The moving average is more dominant and we can see more of its features.

From the above chart please note the following Moving Average features:
1. When starting (or ending) a trend the moving average often makes a pointed HOOK or sometimes a slower
BEND
2. The ANGLE of the moving average does not change much during a trend – when the trend is down, the
moving average points down and when the trend is up the moving average points up.
3. The moving average is displaced by 3 periods so the above signals appear to lag but in live trading they
occur at the optimum time. When looking at history you need to take into account that the signals are 3
periods ahead. As you can see above, the MA angle is clearly visible 3 periods ahead of price while trading
4. When the price moves over the displaced moving average it is often a great entry or exit signal. In this
technique we mainly use it as an exit signal as the RSI / Moving average together provide faster entry
signals.

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The ANGLE of the moving average

The first feature of the moving average is the

ANGLE of the moving average. See how the angle of
the moving average is maintained in trends. That
tells us that the angle of the moving average is
reasonably reliable for giving us information about
the strength of the trend. As long as the angle of
moving average is up the trend is up. When the
angle is down then the trend in down.

This simple feature of the moving average will

prevent us from entering reversal signals by the RSI
(see later) prematurely. You will find that the RSI
will often give reversal signals in the oversold area
but the angle of the moving average remains in the
direction of the trend – this is a signal not to trade
the RSI reversal signal.

Only once both the RSI and the Moving average

have hooked is the reversal signal confirmed.

This is a very important principle of this trading

technique as this will filter out most trades that
have a good chance of continuing in the direction
of the trend.

Please note the moving average is advanced by 3 periods so in the above example the moving average appears to
only hook after the RSI has. In live trading, the hooks occurred at the same time. We advance the moving average
by 3 periods for its great exit signals which will be discussed later.
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The Moving Average HOOK or BEND

The second feature of the moving average is when it changes direction. It

often changes direction so quickly that a hook (HOOK) or a well rounded
turnaround formation is made (BEND). These hooks or bends make
excellent trend turn around signals.

Because this technique requires the RSI to be oversold or overbought

before a trade can be considered we do not use every moving average
HOOK or BEND as information.

We only pay particular attention to the HOOKs and BENDs that occur once
the RSI has reached the overbought or oversold parts of the RSI.

See the explanation of RSI HOOKS and BENDS later.

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The Moving average crossover Exit

The moving average crossover occurs when the price crosses AND
closes on the other side of the moving average. These crossovers
are sometimes used as entries but for this technique we use
them as one of our exit techniques as it can keep us in the trend
for a very long time.

The example shows how exits are made only when the price
closes on the other side of the moving average. You can also see
how the moving average exit keeps your deals active in a strong
trend.

The moving average is ONE OF the exit techniques we will use

trading the Financial Turning Point technique.

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Improving the results you achieve with the Moving Average signals

The recommended settings for the Moving Average is 3 offset by 3. After you have completed 30 trades using the
recommended settings, you may find that this setting provides signals which are too fast and get you into deals
when the trend continues too many times. You can change the settings to 4 offset by 3 or to 5 offset by 3. The
suggested alternatives give fewer trades with slower but more confirmed signals.

The moving average therefore plays the following roles in our trading of the Financial
Turning Point technique:
1. The Moving average turning points provide great confirmation entry signals with its HOOKS and BENDS.
2. The ANGLE of the moving average gives a good indication of the strength of a trend and can be used as a way
of confirming that you should stay in the trend. When the angle changes and hooks or bends, it may be time to
exit the deal.
3. The moving average makes good dynamic support and resistance levels which allows for a great exit technique
when the price crosses over the moving average.

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The RSI momentum indicator

The Momentum indicator measures the battle between the bulls and the bears. The middle line of each
momentum indicator shows were the power shifts between the bulls and the bears.

When the indicator is in the top 20% of its range it is said to be overbought and ready for a retracement and when
it is in the bottom 20% of its range it is said to be in an oversold state and also ready for a retracement. See an
example later on.

This works in most cases but not all of the time – especially when a very strong trend develops. We therefore have
developed a number of filters to avoid RSI false signals.

They are the Moving average angle confirmation (as seen previously) and the market volatility test.

When trading the Financial Turn around technique we are only going to consider entering deals
once the RSI has reached these oversold or overbought levels.
Then we will only consider a trade if the RSI has reached the overbought or oversold areas and is
BENDING or HOOKING back.
As seen previously, we will only consider a trade if confirmed by a moving average HOOK or
BEND
The RSI signals will be IGNORED if the market volatility is not balanced
We will cover the RSI aspects in this section.

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RSI Settings
We use the following settings for the RSI indicator

And for the levels

With the above settings your indicator should display as shown below.

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Overbought and oversold areas

We will only consider trades when the indicator reaches the overbought sections of the indicator above the 80 line
(light green) or when the indicator has reached the oversold sections of the indicator below the 20 line (pink)

HOOKS and BENDS

As with the Moving average, RSI Hooks occur when momentum changes quite sharply and a BEND occurs when the
momentum change is less severe. See the examples above. With the exception of Divergences we will only trade
the HOOKS or BENDS that occur after the indicator has been in the overbought or oversold areas.

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Momentum Divergences

Divergences occur when the RSI is making lower highs and when the price is making higher highs in an uptrend. In a
down trend the RSI would make higher lows and the price will continue to make lower lows. A divergence is the
momentum indicator telling us that the trend may be running out of momentum. We treat them as warning signals
of a potential change in trend.

The problem is, that when a divergence occurs it is likely that the previous high (in an uptrend) may already have
signalled a Financial Turning Point trading opportunity. See the chart above. The Financial Turning Point technique
deals with these situations in the following ways:

The Moving average angle and failure to make a hook or bend on the 1st high is often a filter that keeps you
out of entering on the 1st high of an uptrend divergence.
The other safety net is the stops used by the technique are relatively big, and are often big enough to allow
the transaction to make a higher high or lower low before reversing.
Our time based exits often get us out of deals before the new high develops on the price chart.

Because of the frequency of divergences, it is better to miss a transaction if all the signals are not 100% aligned.
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When not to trade RSI signals

The Financial Turning Point technique is a reversal technique that trades the end of trends and then joins the
retracement. This technique therefore does not work well in very strongly trending markets. The moving average
angle sometimes saves us from entering against the trend signals. Besides the obvious visual trending movement
seen on the charts, the RSI also has some signals to warn us about dangerous trends. We like trading the RSI as it
bounces between the overbought and oversold areas. When trends start developing, the RSI will start failing to
reach the other side of the RSI. When the RSI starts doing this and staying in a particular buy or sell zone it is a
signal that a trend is happening and that you should not take signals against the trend . See an example in the
chart below:

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So, in general we like to trade when the RSI is bouncing between the oversold and overbought levels on a regular
basis. When selecting currencies to trade check if the currency is in trending mode and only take “with the trend”
trade signals.

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Alternative RSI settings

If you find that the RSI is giving successful trades but that they are infrequent, you need to make the RSI more
sensitive by increasing the number of times the RSI touches the over bought and oversold areas. You can do this by
changing the RSI setting to 4 periods instead of 7.

If however the RSI is putting you into many deals and too many are hitting the stop, the RSI setting is too sensitive
and you can decrease the number of times the RSI touches the overbought and oversold areas. You can do this by
changing the RSI setting to 10 periods instead of 7. See the chart below

Only make changes after you have traded at least 30 trades using the basic RSI setting of 7.

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Chart setup
Individual charts

Using the setting mentioned in the previous sections you would set your chart up as shown below. The Exponential
Moving average has a setting of 3 offset by 3. The RSI has a setting of 7 with levels set at 80% and 20%.

If your charting system provides the facility it would be a good idea to save this setup as a chart template.

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Screen setup
You would then add other currencies so that your screen looks like this. The screen below shows the following
currencies.

AUDUSD USDJPY EURJPY EURGBP

GBPUSD USDCAD GBPJPY GBPCHF

EURUSD USDCHF AUDJPY CHFJPY

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Note that the colour was used to group the currencies into their various family groups – see the currency selection
section which follows; for the currency family grouping.

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Trading signal chart setup

Because we are only interested in the qualifying condition that the RSI is overbought or oversold we don’t really
want to see the actual charts, only the RSI. So it would be an idea to increase the size of the RSI section of the
charts and only look at the chart when the RSI condition is met.

When starting out, your chart setup would often look like this so that you can focus on the RSI qualifying signal of
being overbought or oversold very quickly. This is just a trading tip. The previous setup will also do just fine.

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Templates

Below are templates for the charts and a screen profile that can be used for MetaTrader4. This template and profile
are given as means for MetaTrader4 users to quickly load the chart and screen profiles and are in no way a
requirement of the technique. If you use another trading system simply set your charts and screens up as shown in
this eBook, or in any other practical manner. It normally takes less than 10 minutes to load the charts and screen
setups on most charting systems.

Also please note that we can not offer technical support on how to implement or use templates.

These templates are attached to your welcoming letter.

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Time frames
Below are the guidelines for trading the various timeframes. In general please note that the idea is to enter on the
closing price on the timeframe candle, which should also be the opening price of the next candle e.g. when trading
the 4 hour time frame your would enter on the close of the 4 hour candle when a trading signal presents itself.
When you have identified many opportunities you may have to enter many deals at the same time. Take into
account the section on currency selection when entering many deals.

When learning the technique we would suggest that you focus on either the 15 minute or 4 hour time frames. The
15 minute will help you process and test transactions a lot more than the higher time frames.

Slippage
In the case of you having to enter many deals at the same time, slippage might occur. This slippage can be in your
favour or the price can be a worse price that the closing one. This is normal and you would have to use your
judgement in deciding whether to continue the trade if you have experienced negative slippage. Normally a 5 pip
slippage will be OK. If it is more consider putting a pending order at your intended entry price and let the market
come back to your ideal entry price.

Get the entry price first

When entering your transaction the entry price is the most important. Make sure you secure that price as your
biggest priority. Do not waste time with stops and targets. Enter the deals first and then later go back enter your
stops and targets when the urgency level is lower.

15 and 5 Minute timeframes

Please use the following times where possible when using the 15 or 5 minute timeframes: On the close of the 15 or
5 minute candle at the open of the next candle

during the 3 hours starting at the opening of the Tokyo market (8:00 am JST),
2 hours before and 3 hours after the open of the London market (8:00 am GMT),
the open of the US market (8:00 am to 11:00 am EST)
and 2 hours around the close of the London market (4:00 pm to 6:00 GMT)

When trading the shorter timeframes the impact of major announcements play a bigger role than the longer
timeframes. So do not trade when there are major announcements or when your deals may have to remain open
over weekends

Using the shorter timeframes allows for quicker opening and closing of deals and could be done in one trading
session of 2 to 3 hours.

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1 Hour timeframes
The hour timeframe offers less flexibility than the 15 minute timeframe as deals are less likely to complete in a very
short time. You could use the hedging approach suggested in the 4 hour timeframe to freeze transactions until you
are able to review them again. On the whole having a stop and target prevents you from having to watch the deals
all the time.

4 Hour time frames

Using the 4 hour timeframe will require you to view the trading charts every 4 hours, especially if you have deals
active. Should this not be possible you could consider hedging your deals during the periods you can’t watch the
market. If you are in a sell you would simply enter a buy transaction in the same currency to freeze the deal. The
deal will not make a profit or a loss until you un-hedge the transaction again. Again having a stop and target
prevents you from having to watch the deals all the time.

Daily time frames

You may find that the daily timeframe is extremely slow and produces very few trading signals. The stops required
for the daily trading timeframes are very large so you may want to supplement your daily trading with the 4 hour
timeframe.

The best times to trade the technique are

Daily on the close of your systems daily candle

4 hour: on the close of the 4 hour candles at least 4 times a day which include the times below
1 hour: the close of the candle and at any times which include the times below
15 and 5 minutes: on the close of the candles
o during the 3 hours starting at the opening of the Tokyo market (8:00 am JST),
o 2 hours before and 3 hours after the open of the London market (8:00 am GMT),
o the open of the US market (8:00 am to 11:00 am EST)
o and 2 hours around the close of the London market (5:00 pm GMT)

Entry criteria are obvious immediately so it is possible to evaluate trading opportunities for up to 12 charts in less
than 1 minute.

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Currency selection

High success forex trading systems are successful because they only produce exceptional signals that do not occur
that often. To overcome this limitation it is good to trade as many currencies as you feel comfortable with. That
does not mean that you should just blindly trade a signal received on every currency. Because certain currencies
are either

1. US Dollar dominated
2. Belong to the same basic currency group as other active or considered trades
3. Have a strong reverse correlation to currencies in other currency groups as the active or considered trades.

If you choose your currencies carefully you will not essentially duplicate trades or increase your portfolio risk by
trading inappropriate currencies.

Dollar dominance

When the USDCHF, USDJPY and USDCAD are trading in the same direction (making the same colour candles) and
the EURUSD, GBPUSD and AUDUSD are also trading in the same direction opposite to the first group the market is
said to be dollar dominated. This means that the US Dollar is strengthening or weakening so much that all the other
currencies are being affected and are reacting to this in more or less the same way.

The consequence of a US Dollar dominated market is that trading more than 1 of the above 6 currencies will not
make much sense as they are all acting in the same way and you will effectively by duplicating the same trade. It
would be best to trade only the best looking opportunity.

The other consequence is that large trends tend to develop during phases of US Dollar domination. You then need
to use a trending approach to your trading. If you prefer a sideways trading approach it is a good time to use non
US dollar based currency crosses.

Currency Families

There are a number of related currencies which can be grouped into “families”. Only high volume currencies are
considered in this discussion.

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Family 1 are the currency crosses that use the USD as the base currency. They are mainly the USDCHF, USDJPY and
the USDCAD

Family 2 are the currency crosses that have the USD is the quoted currency (the 2nd currency in the cross). They are
the EURUSD, GBPUSD and the AUDUSD.

Family 3 are the currency crosses where the JPY is the quoted currency. They are the GBPJPY, EURJPY, AUDJPY,
CHFJPY

The general rule is:

Not to trade more than 1 currency from family 1 in the same direction
Not to trade more than 1 currency from family 2 in the same direction
Not to buy a currency from family 1 and sell a currency from family 2
Not to sell a currency from family 1 and buy a currency from family 2

It would be better to trade the currency that is giving the strongest signal than trading 2 currencies effective in the
same direction. You are effectively doubling your risk on 1 trade.

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TRADING THE TECHNIQUE

Entries

As stated earlier the entry criteria for this trading technique is simple. Enter a trade when the following conditions
are met.

1. The RSI has reached the overbought or oversold levels.

2. The RSI has hooked or made a bend back
3. And the Moving average has also hooked or made a bend back.
4. The entry candle should have a reversal colour i.e. if the trend was up (blue candles) then the entry candle
should be red. If the trend is down (red candles) the reversal entry candle should be blue.

Conditions when not to enter are if the RSI has not recently
touched the other side of the overbought of the over sold
conditions and there appears to be a trend in place. Please see
“When not to trade the RSI signals” elsewhere in this document.

Currency selection criteria should also be taken into account.

So let’s look at a few examples:

EXAMPLE 1 – to the right

In this example the RSI goes overbought. Condition 1 is met.

The RSI hooks but there is no MA bend confirmation. The RSI

hooks for the 2nd time but there is no MA confirmation. The MA
starts bending back after another 2 candles (remember the MA
is 3 periods into the future when doing this evaluation)

It is safe to enter on the close of candle when all conditions are

met. Note that the RSI is no longer in the overbought area – this
is OK.

The closer the RSI and MA signals are the better. Ideally they
should occur on the same candle. The 1st example given in the
introduction is a good example of this > introduction example

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Example 2

In this example the RSI makes many hooks but the MA

continues pointing upwards.

When the MA eventually bends the candle colour is blue

disqualifying the trade.

The MA eventually hooks on a red candle and it is OK to enter

on the close of that candle.

Note the Divergence that developed in this example.

Also note the size of the reversal candle. The larger (the
longer the body of the candle) the entry reversal candle, the
higher the risk to the deal.

We are ideally looking for a small reversal candle. Again the

example given in the introduction is a good example of this.

Click to see > introduction example

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Exits

As with all Forex trading trades finding the optimal exit point can be the most challenging aspect. Experience shows
that one should not be too clever with exits as a bird in the hand is worth 2 in the bush. The alternatives below are
the ones that give the best exit results when viewed over a large number of trades.

In general once you have entered a transaction you need to give it room to work. It may go negative for a while
before heading in the intended direction. This routinely happens when divergences occur. So let the transaction
find it own way and do not try to over manage it. At worst it will hit your stop. Always be prepared for this to
happen. When the transaction starts to confirm a direction, use any of the stops below that are appropriate to
the trading circumstance that unfolds.

Moving Average crossover Exits

This exit method was discussed in the section on the

moving average and is the preferred method of exit.
This method is not automatically used.

It is only applied when the price actually starts trending

after you have entered a transaction. This trend can
occur immediately after your entry (The best result) or
after the market has taken its time to make its mind up
wether to trend or not.

Please click here to view the previous discussion> MA

crossover Exits

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The big points about moving average exits are:-

only use this exit technique when the price

has broken away from the moving average (the
candle does not touch the MA).
You would only exit when the price closes on
the other side of the moving average.

Signals to Trade the other way

The other way to exit is, exit when you start getting signals to trade the other way i.e. if you have entered a sell on
an overbought RSI signal confirmation you would exit if you got a signal to trade the other way – an oversold RSI
reversal confirmation.

The moving average hook or bend is the good exit signal as it is the final qualifying signal to trade the other way.

Don’t ever trade against your own entry signals no matter which Forex trading technique you use.

Low momentum exits

Often the price will lose all its momentum and just trade sideways after you have entered your transaction. If this
occurs it means that the signal used to enter the deal is not working or lacks momentum. If after 6 to 8 candles
your transaction has not started moving in your intended direction consider moving your target to breakeven or a
small gain to just get out of the transaction. This is a form of time based exit.

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Target based exits

To avoid the need to constantly review the charts for manual optimal exits you can preset targets. A good level you
can use for these preset targets is the price level that is a 50% retracement of the previous trend.

Stop threatening exits

If your transaction starts moving very close to your stop (+ 60% of the distance to the stop) you should no longer
consider the possibility of making a gain on the transaction. You should move your target to breakeven.

Time Based Exits

There are a number of time based exits.

Announcement exits.

These exits cover the situation when you are is a short term deal and there is a major announcement expected
soon which may start a strong trend or a potential whipsaw situation. Many traders would exit their deals close to
the announcement time. Some brokers even widen their spreads at the announcement time to discourage trading.

The other approach is to do a partial exit where you would close a part of your position to decrease risk. One never
knows – you could be facing in the right direction when the announcement result causes a strong move in the
market. Remember to tighten your stop if you do a partial close.

Weekend exits

Weekend packed with news and events can cause the price to move considerably causing weekend gaps. The
difference between the Friday price and the Monday price. Many traders would exit their deals at the close of
trading on a Friday for this reason.

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Partial Exits

Often the price will start making exit signals but you suspect that there is still good potential for the transaction to
go much further in your favour. In cases like this it would be prudent to close a portion of your transaction (half to a
third) and give the balance of the transaction time and space to reach its full potential.

The same applies to loss making transactions. Should the market circumstances change, after you enter your
transaction, which increase to probability of your transaction hitting the stop, you should close a portion of your
transaction (half to a third) and give the balance of the transaction time and space to reach its full potential.

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Stops
Large Recommended stops

The stops used by this technique are large. In most cases we are entering deals when the price has the best chance
of being exhausted and will therefore retrace. If the price does not retrace, there are a number of reasons for this.

There could be a strong trend in place and the price will want to make one or 2 more upward waves before
retracing. The stop should give the price room to do these additional waves.
As seen in the discussion of the RSI, the market often makes divergence retracements. Divergence
retracements occur when the price still continues in the direction of the trend but is running out of
momentum very quickly. The stop must give room to these normal market retracement formations.
The trend that has developed is so strong that your stop will be hit

It is therefore very important to make sure that entries are made when both the RSI and the Moving average are
showing reversal hooks and or bends. Entering too early can put your stop at risk. If you find that you are being
stopped out too many times, make the changes to your indicators as recommended below, after 30 demo trades.

Enter your stops at the same time as entering your transaction.

As your personal track record develops and you become more successful you can adjust or reduce your stop sizes
to be in line with your trading history.

It is very important to position size your trades as a % of your account using micro lots. If you are using a trading
account that does not provide micro lot sizing do not trade this technique or change to a broker who does provide
micro lot sizing.

Safe guarding your stops

If you find your stops are being hit too often then consider the following indicator adjustments after 30 trades.

Make the RSI setting slower so that only exceptionally high readings give trading signals. You would for
instance move your RSI setting from 7 to 9 or 11.
Make the moving average slower so that it hooks or bends later by increasing the moving average setting
to 4 or 5. The offset will remain at 3.
Consider changing the basket of currencies you are trading and drop the currencies that are causing most
of the stops to be hit.

The above adjustment should produce fewer but more secure trading signals.

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Recommended Stop sizes

Below are the recommended stop sizes for each timeframe traded.

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Position sizing

Once you have determined the amount you are going to risk on a particular trade, you will need to convert that to
the number of lots. It is easy using the approach below. We strongly suggest that you start with 1 percent of your
account. Do the position sizing suggested below even if you are demo trading.

Once you have determined the % of your account you want to risk, use the calculation method below

1 Capital in your trading account (Your account balance) $5 478

2 % that you have decided to risk 2%

3 $ Amount that you can risk $ 109.56

4 The value of 1 pip in your trading currency 10c

5 The size of your stop (including the spread) 140 pips

6 Therefore the value of your stop is $14.00

7 Calculation of lots

( point 3 ($109.56) divided by point 6 ($14.00)) 7.86 micro lots

Rounded down to 7 micro lots

There is great value to using this approach. The further benefit to this approach is that the smaller your balance
gets the less you risk, thereby reducing the amount you lose in a losing streak. The larger your account gets
because of a winning streak the more you risk and therefore gain, allowing you to capitalise on your winning streak.

Calculation check:

If the stop is hit you would lose 140 pips times 7 micro lots times the value of a pip 10c. That is equal to $98.00
which is less than the $109.56 in step 3 above.

Always do a reasonability check on your calculations.

DO POSITION SIZING FOR EVERY TRANACTION WHEN USING THE FINANCIAL TURNING POINT TECHNIQUE

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Success Ladder

The best trade sizing approach is where the system:-

decreases the position sizing in a losing streak

and increases the position sizing in a winning streak

This is often referred to as the anti-Martingale system

By achieving the above goals your trading account is protected in a losing

streak as you are risking and losing smaller amounts. In a winning streak
your trading account will increase as your deal sizing increases making
your winners produce more.

The question is then:

What is a winning streak or a losing streak?

How much should you increase your position sizing?

The following trading ladder should help you with these decisions. In this ladder a winning streak is regarded as any
time you have gained 10 times the amount you risk per trade. A losing streak is where you have lost 10 times the
amount you risk per trade.

Let’s take a trader who starts with a $ 10 000 account and risks 1% ($100) on each deal:-

When the trader has increased the trading account by 10% or to $11000 (10 times the risk of 1%) it is
recommended that the position sizing is increased to 1.5% of the original account balance ($10 000). Should the
account balance reach +25% (10% + 10 times the risk of 1.5%) it would be OK to increase the position size to 2% of
the original account balance. And so on. So for each increase in the account equal to 10 x the amount risked, the
position size can be increased by .5%. This allows a successful trader to continuously increase the position sizes
with unlimited of the upside.

However when the account goes below the level it was before the increases mentioned above (below $11 000),
you can continue trading at the increased level (1.5%) until the previous level on the ladder has been reached ($10
000). So in the above example once the percentage risked goes to 1.5% when the account is over $11 000, the
trader can continue to trade 1.5% risk until the account balance goes back to $10 000 where the 1% level will again
be used.

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The opposite applies to losing streaks. When the trader has lost 10% of the original trading account the risk is
decreased to 0.5% of the original account balance ($10 000). Should the account balance go down further by 10 x
the amount risked per deal, the position size should be reduced to 0.25% of the original account balance. Please
refer to the ladder below for details.

Should the account balance then go down further by 10 x the amount risked per deal, you should stop and go
back to demo trading.

AT THIS STAGE THERE IS NO POINT IN LOSING MORE GOOD MONEY ON POOR TRADING.

ONLY RETURN TO THE LADDER ONCE YOU HAVE A SUCCESSFUL DEMO TRADING RECORD.

By using the above principles apply a success ladder approach to your trading account balance so that you can fully
benefit from successful streaks and be protected in losing streaks.

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IMPROVING YOUR TRADING PERFORMANCE

If you are not achieving optimal results from trading of the Financial Turning Point Forex trading technique consider
the following changes. These changes should only be considered in respect of information obtained from a trading
account reflecting no less than 30 trades:

Check you currency selection very carefully – Are particular currencies causing losses and other currencies
constantly resulting in winners. See if you can identify why certain currencies are causing losses and
eliminate them.
Check if your stops are too small or too large.
Check if your targets are too small or too large.
Check if you need to add the 2nd chart filter (see below)

Indicator adjustments

These filters are recommended for more conservative traders who would like a very high success rate. Chasing a
high success rate will however reduce the number of trades that qualify to be entered. When the number of trades
decrease as a result of adjustments made, it is a good idea to increase the number of currencies considered for
trades. Increasing the number of currencies traded may offset the drop in trading frequency.

A number of changes to your trading strategy have already been mentioned in the stops section and are important
enough to repeat here.

If you find your stops are being hit too often, then consider the following indicator adjustments.

Make the RSI setting slower so that only exceptionally high readings give trading signals. You would for
instance move your RSI setting from 7 to 9 or 11.
Make the moving average slower so that it hooks or bends later by increasing the moving average to
setting to 4 or 5. The offset will remain at 3.
Consider changing the basket of currencies your are trading and drop the currencies that are causing the
most stops to be hit.

The above adjustment should produce fewer but more secure trading signals.

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Multiple timeframes

There is however another filter that you can consider.

When trading a particular time frame consider introducing a rule that you will only allow you to enter trades when
the next timeframe is supporting the transaction. It need not give actual trading signals but at the time of entering
your transaction on, say, the 15 minute charts you would look at the way the 1 hour chart signals are presenting. If
the 1 hour chart does not present potentially similar signals then wait for the longer term chart (say 1 hour) to build
up for a transaction and then enter it on the shorter term charts (say the 15 minute).

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TIME FOR ACTION

If you have read the eBook this far it means that now is the time for action. This technique will not work if you try
to intellectually evaluate it. It will only work if you apply your newly learnt knowledge into practical actions. You
owe it to yourself to succeed.

You are not alone on this journey to success.

You have a step by step success plan provided for you. Click here to see it> Success Plan

You have regular support webinars to discuss and ask questions about the technique

You have email support which will effectively turn your questions into a one-on-one mentorship process

There once was a very wise man who was so loved by the people in his country that he became more popular that
the ruling king. The king became jealous and tried to set the wise man for failure. He arranged a public meeting
where he would trick the wise man. He had a small bird in his hand that nobody could see. He then asked the wise
man – “ Is the bird in my hand dead or alive?”. If the wise man said alive the King would squash the bird to death
and if the wise man said dead, he would open his hand and let the bird fly away. The King could not lose. The wise
man thought about the King’s question and answered: “The fate of the bird lies in your own hands”.

Are you going to let this Forex trading opportunity slip through your finger with lame excesses like: It will never
work, I don’t have the time, the system does not suit me, interesting but there is another system I would like to
look at etc, etc.

Or are you going to give the technique a good chance of making you a successful forex trader by investing some
time in following the path already detailed for you?

Your Forex future is now in your own hands.

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MORE INFORMATION AND SUPPORT

Please contact at info@expert4x.com with any query or comment you may have regarding any aspect of this
technique.

Your enquiry could result in:

1. An amendment to eBook
2. A new video explaining your query more clearly

This will benefit

you,
all users of the Financial Turning Point Forex Trading technique
as well as Expert4x.

Please do not hesitate to contact us about any aspect of this technique.

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