By // Karll Dittman
MUST READ RULES on how to use the signals
Important Rule #1:
This is a Forex review. Do not use the indicator on a flat market! Use the indicator ONLY at active market hours – for example London session, US session.
Trend will not be noticeable on a weak market (night time, Christmas period, other holidays etc…) keep reading and I will explain everything …
Important Rule #2:
– Identify a current trend. (Remember? Trend is your friend?)
– Ignore all signals against a current GLOBAL trend!
– Try using the informer to find out how strong the current trend is.
Important Rule #3:
The next highly important rule: Do not trade and do not use the indicator on a sideways trend. This is a “MUST follow” rule.
If you DON’T follow or ignore the rules above – good results are NOT guaranteed!
Stop Loss :
Place your stop loss according to the popup alert SL.
In most trades stop loss is calculated with this formula:
Previous bar high or low + extra number of pips.
You can adjust the SL extra number of pips in the indicator INPUTS.
Money Management :
Money management is a very important concept that has an enormous effect on draw downs and margin calls. The cardinal rule of money management is the following:
You should only risk 1-3% of your account on any single trade.
You may have heard this rule a hundred times before, but it is amazing to see how many good traders fail to comprehend this concept – and don’t understand why they are wiped out again and again, despite great entries and timing of trades.
Another important concept that is related to your stop loss:
In this strategy you learned how to place a stop loss for each setup.
This stop loss is calculated regardless of your level of risk or your equity, and is based solely on price action. After a stop loss is set, calculate your trade size so you achieve the right percent of risk for your trades.
For example: your stop loss is 10 pips, and your equity is 10,000$, you wish to risk 2% of your equity in this trade, so you enter a trade with 2 lots – so your risk is 200$, or 2%.
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