Copyright Covered Forex Price Action (FPA) System

Forex Price
Action system

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Risk Disclosure Statement

The contents of this e-book are for informational purposes only. No Part of this publication is
a solicitation or an offer to buy or sell any financial market. Examples are provided for illustration
purposes only and should not be constructed as investment advice or strategy. All trade examples are
hypothetical.

No representation is made that any account or trader will or likely to achieve profits or loses
similar to those discussed in this e-Book. By purchasing this e-Book, and/or subscribing to our mailing list
you will be deemed to have accepted these and all other terms found on my web page
www.Forexprofitfarm.com in full. The information found in this e-Book is not intended for distribution
to, or use by any person or entity in any jurisdiction or country where such distribution or use would be
contrary to the law or regulation or which would subject us to any registration requirement within such
jurisdiction or country.

CFTC RULE 4.41 -

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN
ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO,
SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER
COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY.
SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE
DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY
ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

Copyright Information
The manual contains material protected under copyright laws. Any unauthorized reprint or
resale of this material, free distribution is strictly prohibited

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Hey There Trader!

Thanks for investing in Forex Price Action system. Like the name suggests, the
system is based on price action of currency pair. Youll be amazed with the
simplicity and accuracy of this system.

On top of it, you can start using the system as early as today.

But like I always suggest, do the demo trading 1st to get used to the Forex Price
Action system and once you are comfortable, feel free to use the system to place
live trades!

That said, once again thanks for investing in Forex Price Action system.

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Table of Contents
Basis of the Forex Price Action System ................................................... 5
What you need ....................................................................................... 5
The System.............................................................................................. 8
Money Management ............................................................................ 11
Exit Rules............................................................................................... 12
Example 1 Trade on GBP/USD ............................................................ 13
Important Takeaways ...................................................................... 15
Example 2 EUR/USD ........................................................................... 17
3 Important points to become a better trader...................................... 18

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Basis of the Forex Price Action System

Like I mentioned above, the Forex Price Action system is based on price action of
the currency pair. By looking at the price action of the currency pair, we try to
understand the momentum or volatility of the currency pair.

So, If the currency pair has moved significantly on a particular day, that means a
lot of traders and financial institutes are showing interest in the currency pair
which is resulting in huge liquidity.

So, this may be idle time to open a trade and make some profit!

So, what we do as part of this system is to look for such liquid setups and then
make trades. These trades, because of the criteria we use, will result in highly
accurate trades

Now let us look at what all do we need to use the system.

What you need

Let us look at the indicators that you would need.

Indicators that you need

1. Forex Candlesticks.
2. No Other..

Yes, since this is price action based system, you dont need any other indicator.

Which currency pair does the system work on?

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The system that I am telling you is primarily driven for GBP/USD and EUR/USD
currency pairs. They are the most liquid of currency pairs.

(But to be honest, it seems to work more profitably on GBP/USD.)

What Else do you need -

1. A Real time forex Charting service Can be free or can be paid. Since the
indicator we'll be using is freely available, free charting service will work just as
well as paid ones. I would recommend you to use the charting service that is
provided by your broker

2. Trading account Demo Account atleast. That is important since you are going
to test the strategy before trading with real money.

Now, let us take a look at the strategy.

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Strategy -
Open the Daily chart of any of these currency pairs EUR/USD or GBP/USD.
Convert the chart to Candlestick format if it is not already.

A word about candlesticks -

As you know already, each Candlestick is made of 2 parts
Body and threads (also known as Wicks).

The Body represents Opening and closing price, while the wicks tell the low and
high of the timeframe.

Take a look here of sample candlesticks

When we refer to the entire length of candle, it means the size of BODY (the
green/red portion) + size of the threads (also known as Wicks)

The green candlestick above means a Bullish Candle where closing price is higher
than opening price. The red is a bearish candle where Opening price is higher than
closing.

(On a side note, if you want to master forex candlesticks, which I encourage you
to do, then take a look at this inexpensive manual
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http://www.forexpipsmaster.com/fxcandlestick. It is really cool and I highly

recommend it)

Just to tell you, you keep the chart in bar mode also. But I have found Candlesticks
are much easier to understand and use.

With that background, let us move on to the entry and Exit rules of the Forex
Price Action System.

The System
This is what you have to do
1. Open the daily chart of currency pair you want to trade between GBP/USD
and EUR/USD.

Convert the chart to Candlestick Format, if not already.

2. After this, look at the candlestick of the previous day. Remember, since this
is a daily chart, each candle represents one day of action.

3. If the length of the entire candle (difference between High and Low) is 100
pips or more, then today you can have potential trade!

4. On the other hand, if the length is less than 100 pips however, then no
trades today on this currency pair!

5. Oh, One important point to mention EUR/USD on average moves about

110-120 pips in one trading day. GBP/USD on the other hand moves 140-
150 pips! So there is enough liquidity in these currency pairs.

Let us take a look at one sample chart

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All the candles that I have marked in above chart are more than 100 pips
long.

On a side note, notice the candles that I have marked by black line. In these
candles there are 2 trade opportunities. And each trade would have finished
with more than 100 pips in profit.

6. If yesterdays candle is greater than 100 pips, check todays price action. If
the market continues in the direction of yesterdays candle, then open a
trade if below mentioned criteria are met

a. Criteria 1 - Todays daily candle has moved 50 pips in the direction of

yesterdays candle.

By this, what I mean is that if yesterdays candle is bullish candle

(Green/Blue), then todays should also be bullish and market should
have moved atleast 50 pips.

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This basically confirms that there is enough volatility in the currency

pair and the market may continue moving in yesterdays direction.

b. Criteria 2 - The next criterion that should be met is that the current
candle should have moved atleast 15 pips outside the high/low of
previous days candle.

So, if yesterdays candle is red and is of size 100+ pips, todays candle
should be red and should have atleast 50 pips long body and 15 pips
lower than yesterdays low!

This is needed to confirm that market doesnt reverses from

yesterdays low/high (forming double top/double bottom setup).

7. Once these criteria are met, open a trade immediately!

Let us take a look at an example

In the chart above, as you can see the candle A is 110 pips long. Line B marks the
line that shows the high of that candle.

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Box D shows the part of the body of candle of next days candle which is 50 pips
long. As you can see it is also more than 15 pips higher than yesterdays candles
high.

So, at line D, the trade can be opened.

Money Management
To have successful trades, money management is very crucial. Implementing
sound money management principles can
a. Reduce the number of losing trades
b. Increase profitability of winning trades.

Under Forex Price Action system (FPA system), this is what a trader needs to do
for money management

1. Place a stop loss 50 pips away from entry point. So, if you opened a long
trade at 1.3100, then your stop loss should be at 1.2950

2. Once your trade is 50 pips in profit, move your stop loss to your entry price.
So, from this point onwards, your trade cannot end in loss.

3. After that keep adjusting your stop loss (using trailing stop loss) after every
20 pips in profit.

So if you are 70, pips in profit, the stop loss should be 50 pips away from
that price. This would mean that if the market reverses, you endup with
profit of 20 pips!

Here is an example

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Remember, the chart that we looked above. This is how that trade will look like
later.

At line E, the trade is 50 pips in profit. At that point, the stop loss should be
brought to entry price (line D). This way, from this point onwards, the trade
cannot end in loss!

After that trailing stop loss can be placed for every 20 pips movement in the
direction of the trade. So, when the profit is 70 pips (line F), advance the stop loss
by 20 pips. When profit is 90 pips (line G), advance stop loss by another 20 pips.

Same with line H.

Exit Rules

Just like the entry point, the exit point is equally important.

Under FPA system, there are multiple exit strategies that you can use

1. Most common Keep the trade open till it hits your trailing stop loss. So,
this way you may get maximum profit from a trade!

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2. Close the trade at 100 pips Profit Put your limit order at 100 pips beyond
the entry point. When that price is hit, your trade will get closed
automatically

3. Plot support and resistance levels to check the reaction of currency pair at
those levels. If the currency pair seems to be reversing at those levels, close
the trade!

So, you can use any or all of these exit strategies based on your experience level
as well as the time you are able to spend on trading!

Thats all!

Its not Complex..right?

Let me tell you, the strategy is highly accurate and profitable as youll notice when
you start using it.

With that said let us look at some examples.

Example 1 Trade on GBP/USD

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The Above chart shows 3 prominent trade opportunities.

Let us look at each one of these trade setups

1. 1st trade
a. Look at Candle A. It is bullish and is 187 pips long. So it falls under
FPA system criteria.
b. The next day, when market moves 50 pips in direction of previous
candle (Bullish that is..), But these 50 pips are within previous
candles range.
c. However, when the market had moved 72 pips, 15 pips out of these
were outside yesterdays high (Indicated by line B).
d. At line B, trade can be opened, with stop loss 50 pips away at line C.
Once the trade is 50 pips in profit, the stop loss is brought to entry
price. After that, a 20 pips trailing stop loss is placed.
e. At line D, the trade is closed. How it is closed, depends on the trader
Here is why I say that. At line D, the profit is 104 pips.
A. Either the trader can place a limit order to close trades
automatically at 100 pips profit
B. Or they can keep use the trailing stop loss till the market
reverses and hits their stop loss
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So, at line D, the trader can either close the trade when trade is in
100 pips profit or else can wait for market to reverse and hit the stop
loss (like it happened after 2 days) to end with 40 pips profit.

2. 2nd Trade
a. The Bearish candle 1 (shown with Green Ellipse) is 163 pips long
b. At line 3, the current days candle is atleast 50 pips long and also is 15
pips lower than yesterdays low.
c. So, the trade can be opened at line 3 with stop loss 50 pips away at
line 2.
d. If the trader is using the 100 pip profit exit strategy, then at line 4 the
trade can be closed.
e. However, if trader is using strategy of using trailing stoploss till the
market reverses and hits it, then trade will get closed at line 5 with
155 pips profit

3. 3rd trade
a. The bullish candlestick A1 is 182 pips long.
b. At line A2, the trade is opened.
c. At 50 pips profit, the stop loss is brought to entry price. So, from this
moment onwards, the trade cannot end in loss.
d. The next day, though the market reverses when the trade was in 73
pips profit and will hit trailing stop loss ending the trade in 20 pips
profit.

Important Takeaways

Some Important takeaways from above examples

1. Putting a stop loss is highly important. The strategy around stoploss that I
have mentioned (like, moving to entry price when the trade is 50 pips in
profit, use of trailing stop loss) will increase profits tremendously.

2. There are multiple ways to exit a trade (like, using trailing stoploss, or
exiting at 100 pips profit or closing at key support/resistance levels) and

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each one is very effective. Which one to use is dependent on trader.

Choose the one which you are more comfortable with.

3. Another important takeaway is that the Forex Price Action system works
very well! Use it and youll be highly pleased..

Let us look at another example

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Example 2 EUR/USD

This chart has so many trade opportunities. However I am listing only 3 of those

1. Trade 1
a. Candle A is 190 pips in length.
b. Line B shows when the trade can be opened.
c. Line C represents point when trade can be closed with 100 pips
profit. Else the reversal would have closed the trade with 60 pips
profit

2. Trade 2
a. Candle 1 is 135 pips in length.
b. Line 2 is where the can be opened.
c. However, to be honest the market reverses shortly after.
d. At the start of reversal, the trade would have been in 53 pips profit.
So, the stop loss would have been brought to entry price.
e. Due to market reversal the trade would have closed at 0 pips as
profit

3. Trade 3
a. Candle A1 is 155 pips long.

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b. At line A2 the trade can be opened

c. The trade can be closed when profit would have reached 100 pips
profit or at line A3 with 140 pips profit after market would have
reversed and hit trailing stop loss

4. Trade 4
a. Candle B1 is 107 pips long
b. At line B2 trade can be opened
c. At line B3 the trade can be opened with 100 pips profit or the trade
would have closed with 60 pips profit when currency pair would have
reversed and hit trailing stop loss.

Wow! I really have given quite a few examples!

3 Important points to become a better trader

So, as you can see, FPA system is really a very good and reliable trading system
which is very straight forward for anyone to use. No Complications!

However, please take care of below 3 points when you use this system -

A. Practice on Demo account before you risk live money.

B. Don't skip the rules. If you do,you are placing risky trades.

C. Maintain discipline by placing stop loss and trailing stop loss without fail!

But always remember when trading that incase you missed one trade, you
shouldnt panic and become upset. There are always going to be further trading
setups that you can take advantage of!!

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So, here we are after going through the Forex price Action (FPA) system. In this
manual we have covered a lot of important stuff.

As you can see that

1. Forex Price Action (FPA) system is a very easy to understand and equally
straightforward to implement.

2. The trade management techniques covered are very important and will
help you become a better trader.

3. The system comes with clear defined rules for when to place and the trade
and when to close the trade so that there is no ambiguity.

So, there is a lot of information in this manual. Incase something is not clear, I
would suggest you to go over that part in the manual once again.

Also, feel free to approach me if you have any questions.

Now the next thing that is for you to take action by starting the trading using
Forex Price Action (FPA) system, on a demo account.

To help you with in trading, I have listed below some additional resources that will
help you further

Additional Resources

Here are some additional resources for your reference

1. Live Forex Charts Ideally I would prefer you to refer the charts that your
broker provides you since those charts will be more synchorized with your
trading station.

But incase you dont have any, please feel free to refer
www.dailyfx.com/charts

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2. Economic Fundamental Announcements I would suggest you to refer to

www.dailyfx.com for the economic calendar as well as for the latest fundamental
news.

3. Tips on forex Trading

www.forexsuccessformula.com/forextradingblog

4. Swing Trading Strategy This manual focuses on Day Trading in Forex

Market. If you are looking for a swing trading strategy, then please check
out
www.forexsuccessformula.com

Conclusion
You, now in your hand have a system that can help you make the money you
wanted to make by trading forex.

As you can see Forex Price Action (FPA) system is simple to understand and you
would be surprised to see how easy it is to use.

So the only thing that is between you and making huge money in forex market is
Using the system. So, make sure that you now start using Forex Price Action
(FPA) system.

I would suggest you to please go through the manual again and read the section
which is not clear, if any. Especially, do go through the Trade Management
section again.

After that, start practicing on a demo account and give yourself about 20-25
trades on demo station to get used to it. Please dont expect to learn the system
overnight!

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And, of course, please feel free to reach out to me if you have any questions,
comments, any suggestions or any experience you want to share. You can write to
me at
forexpf@forexprofitfarm.com

Thanks again for investing in Forex Price Action (FPA) system.

Thanks & Regards,

Rahul

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