Frequently Asked Questions - Part 3

Q:  Hi Jeff,  thanks for the all the emails and your e-book was amazing.  I've managed to combine your strategy with some of my own and on demo I've made a killing. Unfortunately on live trading I keep getting stopped out only to watch the market reverse as soon as my stop is hit and surpass my target(limit).  I've done some research and  found that's a trick my broker uses to increase his profits so I'm looking for a new broker at the moment.  I'm considering Crown Forex due to the low spread. can you assist me in finding a good reputable broker with a low spread. I'm trading gbp/usd. Thanks a lot and awaiting your reply. - Rey

A: The fact that the minute you switched to live trading and are consistently getting stopped out, tells me your broker is screwing you.  Plain and simple they are robbing you out of not only profits you should have had, but forcing you to take losses that shouldn't have happened in the first place.  I am not familiar with Crown so I can't comment. 

Another tactic that I have learned that some Forex firms do, is to trade against you.

Here's the deal...  They realize that 95% of forex traders lose all their money within 6 months or less.  For this reason they bet against you.  How?  Quite simply if you buy then they take a position against you by selling. If you go short then they buy.  Don't worry about this however, because if they see you are trading well then they will not go against you because they would end up losing money.

I would recommend that you try the firm I mention at the end of the book.

Note:  The next question is actually from a trader who is using my "Trade Secrets" program to trade the forex.  His question is very relevant to all users on this program as well.  Also note that "IB" refers to the strategy taught in 'Trade Secrets' and 'Sanjay' is a student of mine that turned 1000 pounds into 109,000 pounds in less than a year.

Q:  I have been trading on a Forex simulator (with a 15 min delay on the chart) and have achieved a 70% winning trade success rate in just over a month, with a £10,000 account growing to £15,660. My losing trades were always when I failed to stick to your methods and tried to 'wing' it, or when I tried to catch a momentum trade and the trend went against me.

After watching Sanjay's winning 1500 pip video, I took a look at my broker's monthly bar data for that period - there was no IB setup for that month!  In fact the bar data was not the same at all. Sure, it followed the highs and lows and generally correlated, but individual bars were showing different high, lows, open and closes; in fact some were up bars in place of down bars and vice versa. Since then I have discovered what other traders already know - the Forex has different charts from different brokers.

With the Forex market being composed of many market makers within a market, how would we trade with the IB strategy when there is no consensus of what the price should be? For instance, Sanjay was trading off FXCM data but I was looking at data from Tenforex. Do we just go with the data in front of us and maybe miss some great trades, or is there a Forex data feed we can work with reliably? I would guess that using data from one of the biggest brokers with the highest number of active traders would give us the most 'accurate' charts. Your thoughts on this would be most welcome.  David - UK

A:  Yes you are right as there is definitely a discrepancy between data coming through each broker's trading platform.  Don't worry about it.  The main thing to be concerned with is spotting the setups I teach and then following through with proper money and trade management.  Sure you may miss a trade due to differences in data, but other times you will find a setup that someone else doesn't see with their broker software.  It will all equal out in the end.

Q:  Jeff, I am using the ProEdgeFX Accu-charts software you recommend.  Are there any preset symbol recognition tools that can identify the pattern you teach in your "Forex Profits" program?  - Todd

A:  While this software has some very sophisticated features for a free software, it doesn't have the capacity to scan for my setup.  You would need something like Trade Station software that gives the ability to write any type of scans you can dream up.

Q:  Hi Jeff!   The simplicity and overall accuracy of your trade setups is amazing and I'm really looking forward to demo-trading it for a while to see if I can have at least one profitable week.  In your course you say that if the entry price doesn't get hit within 5 bars, let it go.  I've noticed that a lot of times that's exactly what happens.  My question is this: if I'm looking at the chart and see, in hindsight, that there was a trade setup about 5-6 bars back, and then a couple of bars later the entry price got hit, but now I'm about 7-8 bars into the trend, can I still place a market order at this point (since the trend has already been established and the entry price hit), or should I let the trade go? - Mark

A:  Mark, the reason I give 5 bars is because based on observation,  I have noticed that time and time again that if the trade doesn't get triggered by then, likely it won't.  Please realize that 5 is not some magic number so if you start observing over and over that good trades are getting triggered on the 7th or 8th bars then go with it.  The only caveat is that you want to be buying at or very close to the original entry price.

Q:   First of all I would like to take this opportunity to thank you for all the wonderful e-mails and videos you have sent me!!!  You certainly are the only one out there that would do that!!! I have just one question. Its got to do with reading the MACD HISTOGRAM BARS above and below the zero line.  I have no problem whatsoever doing this in the USD/JPY pair, as it is very simple .i.e., when I click on my inspect box to check the reading, it reads like this, 0.0146, so this is obviously 146 which is +100, very simple OK!!! The problem lies with the other currencies .i.e., GBP/USD etc. As these currencies have values to four decimal places, where as the JPY has only 2. - Thomas Murphy

A:  Thomas don't worry about the readings on the MACD.  The only time in the manual  I mention looking at the readings is to help me milk a good trade for a few more pips.  Other than that I don't read the numbers at all..  Most of the time you will still capture a nice profit just by waiting for 2 MACD bars to go in the opposite direction of your position.  For example if you are long, then exit when 2 bars go below zero.