The main objective of this PDF is helping you maximize your profits by learning how to start from scratch, manage Take Profits, risk, leverage, and other key factors. It is not our intention to explain deeply what the forex market is, which fundamental factors affect changes in exchange rates, or any other aspect that is not 100% relevant when it comes to successfully following our signals. We will, however, start with a short introduction for you to follow everything we explain.
Download the following apps:
We recommend AXI broker with the lowest commissions.
Sign up with AXI here:
You must deposit your money in your broker account to be able to operate with your real money. The process is very simple and intuitive.
Following our signals is very easy, but there are some things you must consider if you want to do it successfully. It is vital that you keep your phone with you all day long, as you must enter your trades as soon as we send the signals. This way, you will be able to pick the same (or very similar) prices as us, radically increasing your chances of obtaining profits.
The process is the following:
*As you can notice, we provide three take profits. We will explain how to manage them later.
You need to understand what a PIP is and how to calculate its value to understand what you are trading. PIP stands for Percentage in Point, and it is the minimum price change that a specific exchange rate can make. An increase or decrease in PIPS represents a gain or a loss in your trade.
Usually, currencies are quoted to the fourth decimal place (for example: EUR/USD 1.1103). There are exceptions, like the pairs that include the Japanese Yen (JPY), or some commodities such as gold or oil. These are only quoted to the second decimal place (for example: USD/JPY 107.98).
When, for example, the EUR/USD pair moves from 1.1103 to 1.1104, it has moved one PIP, because the fourth decimal place has increased by 1. For the USD/JPY, a 1 PIP increase would be the following: from 107.98 to 107.99, because the second decimal place has increased by one.
Now that you know what a PIP is, we can use this concept in two real examples. Each of them will take as reference the pairs of the previous paragraph so that you can see the calculation with the two modalities (fourth and second decimal):
We have made these examples using huge amounts of money (100,000€ or 50,000$). These are very large figures, especially if you are new in trading. Here is where a very important factor comes in: leverage, which basically allows you to trade larger amounts than your initial investment.
Imagine you want to buy a 100,000$ house, so you go to the bank to take out a loan. The bank requires you to supply 20% of the value of the property as a down payment on the loan. The result is that, for 20,000$, you can access a property valued in 100,000$. This is an example of leverage in real estate. You have bought the house at a leverage of 5x (20,000 is 1/5 of 100,000).
One year later, the real estate market has appreciated by 10%, so your house is now valued at 110,000$ and you decide to sell it. If you had not asked for a loan and you had paid for the entire house from the beginning (100,000$), your profits of your initial investment would effectively be 10% (10,000$). However, the fact that you only invested 20,000$ and used the leverage, means that those 10,000$ of house appreciation no longer represent only 10% of your investment, but you will have made a much more profitable operation that will have given you a return of 50% (10,000$ profits with an investment of 20,000$, which coincides with the result of multiplying the theoretical profits-10% by your leverage-5x).
Now, let’s apply this logic to a crypto trade. Imagine you buy BTC at 30,000$ with TP1 at 30,200$, and leverage is 10x. If you wouldn’t have had leverage and it hits TP1, the % profit you take is (30,200/30,000)*100 = 0.66%. However, with leverage, you multiply that % by 10, so your total profit when it hits TP1 is 6.66% of your initial amount.
➔ If you want to know more about leverage, we recommend that you watch this video: https://www.youtube.com/watch?v=OUswxUrqYu0
Managing risk is key in forex trading, especially when you are new, so you must be very careful when choosing how much leverage you are going to use. It depends on many factors, one of which is the amount of money you are going to invest. In Matatrader 4 you choose how big is your leverage by choosing your lot. A lot in forex represents the quantity of the currency bought or sold in one trade. So, the size of a trade is measured in lots.
The standard lot in forex is = 100,000 units. Therefore, if you invest 1,000€ and open a buying trade in the pair EUR/USD with lot size 1, you are buying 100,000€, so you´re buying at a leverage of 100x.
The management of Take Profits depends on the level of risk you want to assume and the amount of money you have invested in your account. There are different ways in which you can manage this:
Metatrader 4 does not let you open 1 trade with more than 1 TP, so you should open 3 different trades in the following way:
This option consists of opening a single trade with no TPs, placing only the Stop Loss. You will then have to be extremely alert to the market’s movements, so when the trade hits TP1, you should close 70% of the trade, when it hits TP2, close 20%, and when it hits TP3, close the pending 10%. You can, however, modify these percentages depending on the risk you are willing to assume.
For example, if you open a trade with lot 0.1, you will close 0.07 (70%) when it hits TP1, leaving the pending operation with lot 0.03. You will then close 0.02 (20%) when it touches TP2, leaving the pending operation with lot 0.01. Finally, you will close the rest when it hits TP3.
As always in the world of investments and trading, the less risk also supposes fewer potential gains. However, it is a good method to not risk all your capital and be able to learn and familiarize yourself with the strategy you finally choose.
You should open 3 different trades in the following way:
The same logic applies to those who cannot open 3 trades because they use very small lots: if the price reaches TP1, move the SL to either the market execution price or to TP1 price to secure profits and eliminate risk. Use the same method when it reaches TP2.
*The percentages we have used in the previous examples (70% for TP1, 20% for TP2 and 10% for TP3) are just recommendations. They are oriented to beginners (as they minimize risk), so you can vary them whenever you feel comfortable enough to assume bigger risks.
