WIXLIB

ForexTrading3 ProvenStrategiesYou CanStart Using

TodayBy Jon McFarlaneCo-Authors; Nigel Price and “Forex”Johnhttp://forexuseful.com/

DISCLAIMERTrading any financial marketinvolves a high level of riskand may not be suitable foreveryone. You should onlytrade with money you canafford to lose. You shouldfully understand the risksinvolved in any form oftrading and be willing toaccept them. The contentwithin this book is provided

for general informationalpurposes only and no part ofit should be construed asadvice, investment, financialor otherwise.This book is not intended fordistribution to, or use by, anyperson or entity in anyjurisdiction or country wheresuch distribution or usewould be contrary to the lawor regulation or which would

subject the publisher to anyregistration requirementwithin such jurisdiction orcountry.This book may contain linksto external websites. Thepublisher is not responsiblefor any content of thosewebsites.Although due care andattention has been taken inpreparing this book, the

publisher disclaims anyliability for any inaccuraciesor omissions.By reading this book the useraccepts these conditions andagrees that the publisher shallin no way be liable for anyloss caused either directly orindirectly as a result of usingany part it.

COPYRIGHTNo part of this book may bereproduced in any formwithout permission inwriting from the author.Reviewers may quote briefpassages in reviews.Copyright JonMcFarlane 2014Forex Useful http://forexuseful.com/

TABLE OFCONTENTSAboutThe 3 Little Pigs TradingStrategyThe Price Action SwingTrading (PAST) StrategyTrading With Confluence –The Foundations

AboutThe AuthorThis book has been written byme, Jon McFarlane. I havebeen successfully investingand trading my own moneyon a full or part-time basis forover 20 years.In 2008 I set up Systems For

Traders, an independentreview site for trading relatedproducts.The aim was to, in my sparetime, based on myexperience, help those new totrading avoid the manyuseless products being

peddled across the industry.With over 120 reviews of, inthe main, useless, Tradingsystems and Signal services, Iconcluded that a change indirection was needed.With a new focus, to providequality trading related coursesand resources, together withother qualified traders, in2013, I founded ForexUseful. Two of those traders,

who I have great respect forand am entirely grateful toknow, Nigel Price and“Forex” John, are co-authorsof this book.All Forex Useful authors arereal traders who trade on afull or part time basis and canbe contacted directly via theForex Useful website.Our FREE strategies (detailedin this book) have been

downloaded over 10,000times by traders across theentire globe.

This BookDue to many requests fromForex Useful members andrather than publish 3 separatebooks, this book is aconsolidation of the 3 FREETrading strategies currentlyavailable on the Forex Usefulwebsite:The 3 Little PigsTrading Strategy,

by JonMcFarlaneThe Price ActionSwing Trading(PAST) Strategyby Nigel PriceTrading WithConfluence – TheFoundations by“Forex” JohnThe 3 Little Pigs TradingStrategy is a trend following

swing trading strategy basedon Multiple Time Frame(MTF) analysis. By using theWeekly, Daily and 4 Hourtime frames it is completelypossible to apply the 3 LittlePigs Trading Strategy acrossmany markets in less than 10minutes a day. The 3 LittlePigs is a former winner ofthe BabyPips Best FREEForex Trading System of themonth!

The Price Action SwingTrading (PAST) Strategy isdesigned to give you a clearset of guidelines that can beused to make sure yourwinning trades are biggerthan your losing ones. It usescandlestick reversal signalson the longer “anchor” timeframe charts and then trendline breaks on the lower timeframe charts to makeprecision entries. Improve

your Forex future, learn totrade the PAST!Trading With Confluence isabout taking sound tradingfoundations and bringingthem all together. The‘Analysis’ foundationsprovide a real time view ofthe market. When combinedwith the ‘Trigger’ and‘Awareness’ foundations atechnical outlook of the

market is formed. The resultis a Trading plan with clearlydefined high probabilitytrading opportunities.Confluence: A gathering,flowing, or meeting togetherat one juncture or point

I hope you enjoy this bookand I welcome you to visitForex Useful(http://forexuseful.com/)As a member (it’scompletely FREE) you willbe able to download and printthe 3 strategies in this book

and you will also have accessto:Via ournewsletter, FREEweekly updateson all thestrategies in thisbookFREE Livemarket sessions(usually everyMonday

morning)As well as accessto the products,updates andsessions you willalso be informedof future bookreleasesincluding launchand discountoffers, before

anyone else!To understand and implementthe strategies defined in thisbook obviously requires atleast some basic knowledgeof Forex and CurrencyTrading. Those new or evenrelatively new to trading mayfind my book Forex ForBeginners – An IllustratedIntroduction To CurrencyTrading of interest.

Those of you consideringtrading Binary Options youmay also find my other bookBinary Options – AStrategy Guaranteed ToBeat The Brokers In 15Minutes Flat, of interest.I really hope you enjoy thisbook and if you do thenplease do take the time toleave a review, it takes lessthan a minute and your

feedback is personallyappreciated by me.Jon McFarlaneForex Useful(http://forexuseful.com/)

The 3 Little PigsTradingStrategy

ByJon McFarlane

IntroductionThe 3 Little Pigs TradingStrategy is a trend followingswing trading strategy basedon Multiple Time Frame(MTF) analysis.By using the Weekly, Dailyand 4 Hour time frames it iscompletely possible to applythe 3 Little Pigs TradingStrategy across many markets

in less than 10 minutes a day.I use it to trade the Forexmarkets but in theory it canbe applied to any financialmarket.The 3 Little Pigs is a formerwinner of the BabyPips BestFREE Forex TradingSystem of the month!

In The Fairy Tale.The 1st Little Pig

Used common senseHe wanted to protect himselffrom the wolfAnd he wanted to do itquickly and easilyHe built his house from straw

The 2nd Little PigUsed common sense andlogicHe also wanted to protect

himself from the wolfBut he needed somethingstronger than strawHe built his house from sticks

The 3rd Little PigUsed common sense, logicand experienceHe also wanted to protect

himself from the wolfBut he needed somethingstronger thanStraw & sticksHe built his house frombricks

When Trading.The 1st Little PigUses common sense

To trade in the directionOf the Long term trend byObserving Price action on theWeekly chart

The 2nd Little PigUses common sense and logicTo trade in the directionOf the Long & Medium term

trends byAlso observing Price actionon the Daily chart

The 3rd Little PigUses common sense, logicand experienceTo trade in the direction

Of the Long, Medium &Short term trends byUsing Price action on the 4Hour chart for Entry

Basic Principles –Part 1The 3 Little Pigs is a:Trend Following

Swing Trading strategyBased on Multiple TimeFrame (MTF) trading

Multiple Time Frame (MTF)trading was made popular byMarcel Link in his excellentbook titled “High ProbabilityTrading”:

The 3 Little Pigs has takenthe MTF trading concept andadded sound tradingprinciples to establish a solidstrategy that can, in theory, beapplied to any financialmarket.

Basic Principles –Part 2The 3 Little Pigs isbased on 3 timeframesThe 1st Little Pig usesA Red SMA(55) on theWeekly time frame

To trade in the direction ofthe Long term trend based onthe Average Closing priceduring the LAST YEARLong when price closes

above the Red SMA(55)Short when price closesbelow the Red SMA(55)

The 2nd Little Pig usesAn Amber SMA(21) on theDaily time frameTo trade in the direction ofthe

Long and Medium termtrends based on the AverageClosing price during theLAST MONTHLong when price closesabove the Amber SMA(21)Short when price closesbelow the Amber SMA(21)

The 3rd Little Pig usesA Green SMA(34) on the 4Hour time frameTo enter a trade in thedirection of the

Long, Medium and Shortterm trends based on theAverage Closing price duringthe LAST WEEKLong when price closesabove the Green SMA(34)Short when price closesbelow the Green SMA(34)The direction of the trend oneach time frame is based onPrice relative to a specificSimple Moving Average

(SMA).

The Simple MovingAverageThe Moving Average is anindustry standard indicatorand there are manyvariations; Simple,Exponential, Smooth,Weighted, to name but a few.

Moving Averages reflectThe Average Closing price ofa Market Over a specificNumber of periods

For the purposes of The 3Little Pigs AND to keepthings simple:The Simple MovingAverage is usedThe Simple MovingAverage is commonlyreferred to as the SMASMA is commonly writtenas SMA (Number of periods)This example has been taken

from the Daily GBPUSDchart in 2012. The SMA(5)has been manually calculatedto show how it works – TheSMA(5) shows, each day, theAverage Closing price forGBPUSD during the last 5periods (Days).

AND.Here it is on the chart

The SMA(5) is shown as aBlack Line Automaticallycalculated and displayed Bythe Charting package

Why 55, 21 And 34?The Fibonaccisequence (ofnumbers)

The Fibonacci sequence (ofnumbers) is frequentlyobserved in nature and iscommonly referenced in theworld of trading.The Number of periods foreach SMA used by The 3Little Pigs is derived fromthe Fibonacci sequence.

The 1st Little Pig usesA Red SMA(55) on theWeekly time frameThis reflects the AverageClosing Price

During the LAST YEAR –Give or take a week or twoThe LONG TERM TRENDcan be considered:UP if price closesabove the RedSMA(55)DOWN if pricecloses above theRed SMA(55)

The 2nd Little Pig usesAn Amber SMA(21) on theDaily time frameThis reflects the AverageClosing Price

During the LAST MONTH –Give or take a day or twoThe MEDIUM TERMTREND can be considered:UP if price closesabove the AmberSMA(21)DOWN if pricecloses below theAmber SMA(21)

The 3rd Little Pig usesA Green SMA(34) on the 4Hour time frameThis reflects the AverageClosing Price

During the LAST WEEK –Give or take an hour or twoThe SHORT TERM TRENDcan be considered:UP if price closesabove the GreenSMA(34)DOWN if pricecloses below theGreen SMA(34)

Buying Strategy –The 1st Little PigThe 1st Little Pig MUSTconfirm thatThe LONG TERM TRENDis UP

Price must have closed aboveits Average Closing priceduring the LAST YEARIt must have closed above theRed SMA(55) on the Weeklytime frame To confirm that:The LONG TERM TRENDis UP

Buying Strategy –The 2nd Little PigThe 2nd Little Pig MUSTconfirm thatThe MEDIUM TERMTREND is also UP

Price must have closed aboveits Average Closing priceduring the LAST MONTHIt must have closed above theAmber SMA(21) on the Dailytime frame To confirm that:The MEDIUM TERMTREND is also UP

Buying Strategy –ConfirmationThe LONG TERM TRENDand the MEDIUM TERMTRENDMust BOTH be UP beforelooking for BuyingopportunitiesIn this example the LONGTERM TREND was

confirmed as being UP whenthe Weekly candle 19-082012 closed – Weeklycandles typically open on aSunday and close on a Fridayso it means that the firsttrading day after this candleclosed would have been(Monday) 27-08-2012 –Marked on the 4 Hour chartthat follows.

On the 27-08-2012 there wasno need to wait for theMEDIUM TERM TREND tobe confirmed as being UP asit was already confirmedwhen the Daily candle on 08-

08-2012 closed.In this example it is OK, fromthe 27-08-2012, when theLONG TERM TREND andthe MEDIUM TERMTREND were both confirmed

as UP to look for Buyingopportunities – The 3rd LittlePig.NOTE: Sometimes this isthe case, the LONG TERMTREND is confirmed afterthe MEDIUM TERMTREND, sometimes theMEDIUM TERM TRENDconfirms first (see Sellingexample later). It does notmatter which way round

the confirmation occurs justas long as both areconfirmed before lookingfor Buying/Sellingopportunities.

Buying Opportunities– The 3rd Little PigIMPORTANT!The LONG TERM TRENDand the MEDIUM TERMTRENDMust BOTH be UPBefore looking for BuyingopportunitiesThe 3rd Little Pig MUST