forex

Redeemer
making money with a
terrible win ratio

Forex Masonry
 Disclaimer
High Risk Investment
TRADING FOREIGN EXCHANGE ON MARGIN CARRIES A HIGH LEVEL OF
RISK, AND MAY NOT BE SUITABLE FOR ALL INVESTORS.
Before deciding to trade foreign exchange, you should carefully consider your
investment objectives, level of experience, and risk appetite. The possibility
exists that you could sustain a loss of some, or all, of your initial investment,
and therefore you should not invest money that you cannot afford to lose. You
should be aware of all the risks associated with foreign exchange trading, and
seek advice from an independent financial adviser if you have any doubts.

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 introduction
Traders often focus way too much energy into the wrong aspects of a system,
and in doing so, shoot themselves in the foot.

I know people who have been trying to trade successfully for several years
because they focus their attention on things like high win ratios. This attempt to
find a system with an unrealistically high win ratio leads them to continually
alter their system, experience ongoing self-doubt, and ultimately a failure in
trading successfully.

I think we can agree that even an average system can win half the time.
What the Redeemer system is built to do is focus on other aspects that
make a trading system profitable. In doing this, the focus comes off the win
ratio and on to making money.

We can make money even if we win

less than half of our trades.
I want you as a struggling trader to make money. Making money is the goal of
all traders, and if we can get around that pesky win ratio thing, we can finally
be on the way to making money consistently.

The Redeemer system has a much better win ratio than 50%, however,
we will consider a win ratio of only 50% or less for this manual.

The features of the Redeemer system will mathematically unbalance the

statistical odd into our favor. It will seem like magic, but it's math.

The vary nature of the mathematics incorporated means that you are about to
be using a system that virtually guarantees you will make money.

We will assume that you have the discipline to follow the rules, take the trades,
honor the stops, and let the trades play out.

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 introduction
Let's make Money by
winning only

30% of our trades

Most traders can achieve a 30%
win ratio, EVEN BY ACCIDENT.
The statement above should be EXTREMELY encouraging! Even if we were to
flip a coin to determine a buy or sell position, we should statistically be able to
win half of the trades we take. Trade an actual trading system, and we can
increase that by 15 - 20% without trying too hard.

Our win/loss may drop to 30%. so because of this, we will be trading on the
premise that requires ONLY a win rate of 30 to 50%.
The truth is, we can make money if the win ratio drops to 25%.

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 Synopsis
why Redeemer
Almost every system seller tries to sell you on the fact the system has a high
win ratio, and I want to ask, have you ever experienced a high win ratio?

Chances are that if you are reading this, you

have never had a decent win ratio.
One of the biggest reasons traders fail is the lack of a decent win ratio. We are
promised that we can have 80% or 90% successful trades, and when this
doesn't happen, we will start to do some dangerous things. We will start to
doubt ourselves as traders, try to "fix" the system, make modifications to the
system, and even change the system completely. This is an endless loop as
we can never achieve the 90% win ratio it seems all the Instagram traders and
marketers promise us.

On the other hand, we can easily win 30% of our trades by

flipping a coin and using no system at all!

This system will teach you how make

money with a terrible win ratio
This system will redeem you of your poor trading history. You are about to
start making money, even though you are not taking win after win.

I want you to be comfortable losing a trade. This will

keep you trading, and as a result, make you money.

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 Forex Redeemer

Redeemer
The 5 parts of the Manual
Part 1 - Charts and swings
Setting up the charts
Identifying swing highs/lows
Trend direction

Part 2 - Setup
The Setup Box
Entry
Stop Loss

Part 3 - Target
1.382 Extension based on stop loss

part 4 - Management
Reducing the risk on each trade

Part 5 - Break-even
Move stop loss to the entry level

We will be extracting the various procedures listed above from the Ultra Blue
system. The Redeemer is a step-by-step system, highly specialized version
of Ultra Blue to encourage successful trading with a very limited win ratio.

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 PART 1
Charts and Swings
Setting Up the Charts
Identifying Swing High / Lows
Trend Direction

Before we can get into any kind of secrets, tips, tricks, hacks or solutions, we
need to:
1. Set up our charts.
2. Have a basic understanding of market swings.

We will be using a very simple chart setup. We want to build a system that is
extremely simple and easy to follow. The simpler the system, the better it will
perform for us, and this is a system that will perform very well.

As far as analysis goes, we will keep that simple too. We will be looking at
market swings, so after we set up our chart, we will look at what makes a
swing high and a swing low. From there, we will get to part 2 and 3 and so on.

Remember, we are assuming that we are winning ONLY 30% of our trades.
You will get a clear idea of how you can easily make money when the win ratio
is as average as possible.

We aren't trying to improve our win/loss ratio, we are trying to improve

our results!

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 Charts
What It Looks Like
Of course we have seen charts that look a lot busier, but we are after the
simplicity. What we are looking at are 2 moving averages.

The moving averages are:

13 EMA (red)
34 EMA (blue)

These moving averages will give us all the information we need to make the
Redeemer system quite profitable. Using these 2 basic moving averages and
the market itself, we will get:
The direction to trade.
The trade setup.
The entry location.
The stop loss placement.
The target.
The trade management tools.
The break-even method.

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 Charts
Setting up the charts is really quite simple:

13 EMA
The first indicator is the 13 Exponential Moving Average.
This one we make red.

Period Setting

34 EMA
The second indicator is the 34 Exponential Moving Average. This one we
make blue. I used a custom blue to match the candlestick color theme, but
any color will work.

Period Setting

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 Market Swings
Swing Highs And Lows
Before we get into the trading system itself, we need to be able to identify
market swing highs and swing lows.

Another description for these highs and lows are "areas of support and
resistance". We need to know about them because we will be using them to
get our entry signals.

SWING HIGH
SWING HIGH / RESISTANCE (Resistance)
Price makes a move up and
then back down. The top of
that movement is a swing
high, also known as
resistance.

SWING LOW / SUPPORT

Price makes a move down
and then back up. The
bottom of that movement is
a swing low, also known as
support.

SWING LOW
(Support)

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 Market Swings
Swing Highs And Lows
Below are swing highs and lows on a chart. The areas of resistance are circled
in green and the areas of support are circled in red.

Resistance levels

support levels

Below is the same chart as above, but I have marked the same levels with
support and resistance lines.

Resistance levels

support levels

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 Market Swings
Swing Highs And Lows
Below is a second chart with swing highs and lows that aren't as obvious as in
the first example. If you are in doubt if it's a high or low, then it isn't.

Resistance levels

support levels

Below is the same chart as above with the levels marked as support and
resistance lines. We see a few examples where price shares the same area of
resistance and then again with support, this is a common occurrence.

Same level of
resistance Resistance levels

support levels Same level of

support

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 Trend
Trend
To identify the trend direction, we look at the moving averages as a pair. The
13 EMA and the 34 EMA work together to determine the trend direction.

When the 13 EMA is above the 34 EMA, we have an uptrend.

We will be looking to take only long trades (buy trades).

When the 13 EMA is below the 34 EMA, we have a downtrend.

We will be looking to take only short trades (sell trades).

TREND IS DOWN The red 13 EMA is

below the blue 34 EMA.

TREND IS UP The red 13 EMA is

above the blue 34 EMA.

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 PART 2
Setup
Drawing the Box
Setup
Entry
Stop Loss

The setup section of the system is the foundation. Everything else revolves
around the setup.

We will be using something called the Setup Box.

The box is a very specific type of setup. It's not our typical box type trade, we
are using not just the price, but also the 13 EMA to determine the structure of
the box.

The box determines the window between the entry level and the stop level.

Setup Box
The other orders are derived from the
dimensions of the Box:
Entry
Stop
Target

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 Draw The box
How To use the rectangle tool
We will be drawing a "setup box" on the chart. This is the box that will outline the
entry and the stop loss locations. Using the MT4 platform, we will be using the
rectangle tool to do this.

Drawing the box

1. Click the Rectangle Tool in the toolbar above the chart.
2. Click and drag (on the chart) from upper left corner to lower right corner to
draw the box.

1 Click the
rectangle tool

2 Click upper left

corner, drag to
lower left corner

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 Draw The box
How To Modify the box
One we have our rectangle, or "box" drawn, we will need to modify it. We can
reshape it, stretch it, reposition it, and change the color.

Modifying the box

1. Double-click any of the corners or the very center of the box that you have
drawn. This will "select" the box. When the box is selected, we will see "nodes"
appear on each corner and one in the center.
2. Click on a corner node and drag to stretch and reshape the box as needed.
3. To change the color, right-click on a corner or the center node and choose
the Rectangle properties option. Under the Common tab of the box that pops
up, choose the Style and pick the color you like.
4. To lock the square in place after we have made the changes we want,
double-click any of the nodes on the box to "deselect" it.

1 Double-click any corner

or center to select

3 right-click
any corner or
center node

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 Setup - BUY
Setup - Buy box
First, we identify that the trend is up and the price is above the moving averages.
Next, we need the setup.
The setup occurs when the market pulls back and touches the red 13 EMA.

Setup to BUY:
1. The market is above the 13 EMA and the 13 EMA is above the 34 EMA.
2. The price pulls back to touch the 13 EMA.
3. Box is drawn connecting the swing high (top of the box) and 13 EMA directly
under the swing high (bottom of the box), the box is then stretched to the right.

1 Market above 13 EMA,

13 EMA above 34 EMA 2 Price pulls back to
touch 13 EMA

Touch to 13 EMA
Uptrend

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 Setup - BUY
Setup - Buy box
We have identified the swing high and located the 13 EMA directly below the
swing high candle

Swing High

13 EMA directly
below swing high

3 Box is drawn connecting the swing high and

the 13 EMA directly below the swing high

Box is drawn

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 Setup - BUY
Entry & Stop Loss
The box we have drawn is the Blue Box, or the trade setup box.

The entry we would use is called a Buy Stop order. This means that once the
entry order is placed, the price must come up from below, touch the buy stop
level to be entered, and then must continue to move up in order for the trade to
be profitable.

Entry and Stop loss order:

1. The entry order will be placed 1 pip above the top of the box
2. The stop loss will go 1 pip below the bottom of the box.

1 Buy Stop order is placed

1 pip above the box

Buy Stop Order

Stop Loss order

2 Stop Loss is placed

1 pip below the box

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 Setup - sell
Setup - Sell box
First, we identify that the trend is down and the price is below the moving averages.
Next, we need the setup.

The setup occurs when the market pulls back and touches the red 13 EMA.

Setup to Sell:
1. The market is below the 13 EMA and the 13 EMA is below the 34 EMA.
2. The price pulls back to touch the 13 EMA.
3. The Blue Box is drawn connecting the swing low (bottom of the box) and 13
EMA directly above the swing low (top of the box), the box is then stretched to
the right.

1 Market below 13 EMA,

13 EMA below 34 EMA 2 Price pulls back to
touch 13 EMA

Touch to 13 EMA

downtrend

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 Setup - sell
Setup - sell box
We have identified the swing low and located the 13 EMA directly above the
swing low candle.

13 EMA directly
above swing Low
Swing low

3 Box is drawn connecting the swing low and

the 13 EMA directly above the swing low

Box is drawn

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 setup -sell
Entry & Stop Loss
The box we have drawn is the Blue Box, also called the trade setup box.

The entry we would use is called a Sell Stop order. This means that once the
entry order is placed, the price must come down from above, touch the sell
stop level to be entered, and then must continue to move down in order for the
trade to be profitable.

Entry and Stop loss Orders:

1. The entry order will 1 pip below the bottom of the box
2. The stop loss will go 1 pip above the top of the box.

2 Stop Loss is placed

1 pip abovethe box

Stop Loss order

sell Stop Order

1 sell Stop order is placed

1 pip below the box

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 PART 3
Target
Setting Up The Fib Extension Tool
Placing The Target

The target is the first place we can make a change in order to

make money if we are only getting a 30% win rate.

The standard target in the Forex biz is 1:1.

This means that if the stop loss is 100 pips, the target will also be 100 pips.
I know that many traders have tried 2:1 or 3:1 targets, but these targets rarely
get hit by the novice or struggling (average) trader.

In order to put the odds in our favor, we are going to increase the target by a
small amount. We are going to increase the target by 38.2%. That seems like a
weird number, but we use it because it's a high-probability Fibonacci ratio.

In the end, what this means is that when we have a 100 pip stop loss, we will
be adding 38% to that by making it 138 pip target.

This is an easy number to come up with if we use a 100 pip stop loss, but we
will be adding 38% to whatever our stop loss is, so to make the calculation
very simple, we will be adding a level to our Fibonacci Retracement tool.

With this new level added to the Fib tool, the added calculation will be very
simple to do.

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 Fibonacci Tool
Fibonacci Extension Tool
We are going to add a level to Fibonacci retracement tool to show us the
38.2% extension. We will add this level on both sides of our tool (above and
below) so it won't matter what direction we draw the extension (up or down).

For the sake of simplicity, we will be displaying only the levels we will be using.
We will be deleting all the default levels and using the setup box levels and the
target extension levels. We will post an extension level above and below the
box levels, and this is only to keep us form having to redraw the levels if we get
it backwards.

1. Click the Fibonacci Extension tool.

2. Click and drag the Fibo extension tool onto the chart.
3. Double-click the red line of the Fibo extension tool to select it.
4. Right-click a node on the red line and choose the Fibo properties option.
5. Alter the parameters under the Fibo Levels tab.

1 Click the Fib

extension tool

2 click and drag the

fibo tool onto the
chart

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 Fibonacci Tool
1. Click the Fibonacci Extension tool.
2. Click and drag the Fibo extension tool onto the chart.
3. Double-click the red line of the Fibo extension tool to select it.
4. Right-click a node on the red line and choose the Fibo properties
option.
5. Alter the parameters under the Fibo Levels tab.

3 Double-click red
fibo line to select

4 right-click a node
and choose fibo
properties

5 Click the Fibo

levels tab

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 Fibonacci Tool
In the Fibo Levels tab, we are going to use specific settings.
There is a Level column and a Description column.
The Level column will tell the indicator what level to place the levels, and the
Description column will be the text shown at the level once it's drawn on the
chart. We will use a bit of code that will show us the price of that level as well.

To add a level, click the Add button.

To remove a level, click on the level (it will turn blue) then click Delete.
To alter a level number or the description, double-click the field you want to
change and make the change you want.

We will be using 4 levels. You can keep the default levels and add the ones
you don't have, or remove all the levels and start from scratch. The following
are the levels and the descriptions for each level.

The snippet of
code to put in
the description
that displays
the price is:

%$
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 Target - buy
Target - buy
We connect the top and the bottom of the setup box using the Fibo tool and
this will give us the 1.382 Fibo extension we would use for the target. Being a
buy trade, we would use the extension that appears above the box.

1 Use the Fibo tool

from the top to the
bottom of the box

2 Fibo target

We can draw an additional square to better show the target. It's much easier to
show this at a glance.

1.382 profit box

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 Target - Sell
Target - sell
We connect the top and the bottom of the setup box using the Fibo tool and
this will give us the 1.382 Fibo extension we would use for the target. Being a
sell trade, we would use the extension that appears below the box.

Fibo target

Use the Fibo tool

from the top to the
bottom of the box

We can choose to draw an additional square to better show the target. It's
much easier to show this at a glance.

1.382 Target square

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 PART 4
Management
Reducing The Risk On The Trade
The second aspect to making money when we have only a 30%
win ratio is trade management.

The concept behind trade management is to reduce the risk on each of our
trades. Trade management won't be possible on all of our trades, but we will
be able to limit the risk on most of our trades.

For example, if our trade starts out by risking 100 pips, through trade
management, we will be able to reduce that risk to 80 pips, 50 pips, or even
less.

We can already see how this will benefit us in our trading results.
Let's say we take 2 trades, one that wins and one that loses. Let's also assume
our trades are the standard 1:1 risk, meaning our target is 100 pips and our
stop loss is 100 pips (this is easiest for the example).

The trade we win will win us the full 100 pips.

If the losing trade has been well managed, we will lose less than the initial 100
pip stop loss. We could potentially lose only 50 pips.

The win of 100 pips and the loss of 50 pips means we end up with 50 pips
profit, even though our win rate is only 50%.

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 Management
Managing A Trade
The trade will be managed once the market starts to move in our favor. The
first place we put our stop loss (top or bottom of the box) when we get into the
trade originally is called the initial stop loss. After the trade begins to progress,
the stop loss is moved into the box, closer and closer to the entry level.

1. Candle close
The first opportunity to move the stop loss is when we get the first candle close
into profit. This can be the close of the same candle that gets us into the trade,
or it might be several candles after we are in the trade.

By managing the trade, we can start with moving the stop loss towards the
entry level. Our initial risk on the trade might be 2% of our account, and by
managing the trade, we can reduce that risk to 1.5%, 1%, or even less. The
very first move can be enough to reduce the risk on the trade by half.

2. Locking in profit
We can use our stop loss to prevent any loss on the trade at all, and even lock
in some profit. We will be looking to manage the trade in such a way that we
eventually move the stop loss ahead of the entry level (provided that the target
isn't hit before). This will secure a profit, guaranteeing money will be made on
the trade no matter what happens.

3. The 13 EMA
The 13 EMA is the guide we use to move the stop loss. It will determine the
placement of the stop loss as the trade progresses.
The initial signal to move the stop loss is a candle close into profit, and from
there, we look to the 13 EMA for the placement of the stop loss.

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 Management
Buy Trade - 13 EMA
We use the swing high to enter a trade (top of the box), and at the time of the
entry, the entry candle has not closed. The initial stop is placed below the box,
and if the entry candle closes above the box, we move the stop loss to
just below the 13 EMA of the new candle that opens. The stop is then
moved to the new position of the 13 EMA for each newly opened candle until
the trade is closed.

First Move First new candle after

- When entry candle closes entry candle
above the box and new
candle opens, move stop to
13 EMA of the new candle.
- The stop loss, in this case,
is reduced by half with the
one simple move.
Stop is moved
Initial Stop to 13 EMA

Trailing
- As each new candle opens,
move the stop loss to just
below the 13 EMA under the
new candle.
- This process continues until
the trade is closed by the Stop is moved
stop loss, the target, or a along 13 EMA
manual closure of the trade.

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 Management
Sell Trade - 13 EMA
We use the swing low to enter a trade (bottom of the box), and at the time of
the entry, the entry candle has not closed. The initial stop is placed above the
box, and if the entry candle closes below the box, we move the stop loss
to just above the 13 EMA of the new candle that opens. The stop is then
moved to the new position of the 13 EMA for each newly opened candle until
the trade is closed.

First Move Initial Stop Stop is moved to

- When entry candle closes 13 EMA
below the box and new
candle opens, move stop to Entry
13 EMA of the new candle.
- In this example, the stop
loss is reduced by half with
the one simple move.
First new candle
after entry candle

Trailing Stop is moved

- As each new candle opens, along 13 EMA
move the stop loss to just
above the 13 EMA above the
new candle.
- This process continues until
the trade is closed by the
stop loss, the target, or a
manual closure of the trade.

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 PART 5
Break-Even
1:1 Market Move
Moving Stop Loss To Entry

The third approach we will be taking to increase the profits with

a win ratio of 50% or less is to move the stop loss to break-
even.

We want to eliminate the risk completely. Previously, we looked at ways to

reduce the risk on the trade, but here we get a little more aggressive and
remove the risk entirely.

The benefits to this approach should be obvious.

When we win a 100 pip trade, we earn 100 pips.
When our trade gets stopped out but has its stop loss moved to the entry level,
the loss will be zero.

We will be looking for a specific market movement called a 1:1. This is a one-
to-one reward to risk ratio, and this means that if the stop loss is 25 pips, we
will move the stop loss to the entry level when we hit 25 pips into profit.

After the stop loss is moved to break-even, we can then keep it there until the
13 EMA catches up to the stop loss and then we will move forward with trade
management.

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 1:1 Ratio
1:1 Break-even ratio - BUY
We will look at an example of a market that moves 1:1 and the move to break-
even in a buy trade. The top of the pink box is the entry location. The top of the
blue box is when we move to break-even.

Bullish market 70 pip 1:1

- We will have entered the Move to
market. The stop loss below break-even
the box at 70 pips.
- Move to break-even when Entry level
the market moves 70 pips
into profit (top of blue 70 pip
square). Stop loss
Candle does not need to
close, only touch the 1:1.

1 Entry
level 2 market
touches 1:1
ratio.

Stop loss Stop loss is moved

under box to entry level

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 1:1 Ratio
1:1 Break-Even Ratio - Sell
We will look at an example of a market that moves 1:1 and the move to break-
even in a sell trade. The bottom of the pink box is the entry signal.

Bearish market 35 pip

- We will have entered the
market, the stop loss above Stop loss
the box and is 35 pips.
- Move to break-even when Entry level
the market moves to 35 pips
in profit (bottom of blue 35 pip 1:1
square). Move to break-even
Candle does not need to
close, only touch the 1:1.

1 2
Stop loss above Stop loss is moved
recent high to entry level

Entry level
market
1:1 ratio touches 1:1
ratio.

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 1:1 Ratio
Modify Fibo Tool Adding 1:1
We are going to make one more modification to the Fibonacci retracement
tool. We already have the 1.382 extension level, but in this case, we will add a
100% level. By adding this level, we can quickly determine when to move the
trade to break-even.

Earlier, we modified the Fibo tool. We will follow the same process as before,
but add 2 more levels.
Level: -1 / Description: FE 100 (%$)
Level: 2 / Description: FE 100 (%$)

Added Fibo Levels

Added
Fibo levels

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 PART 6
Putting It All Together
Identify The Trend
Wait For The Setup
Place Entry And Stop Order
Place Target
Manage Trade
Move To Break-Even
Here we are going to assemble all the parts as a complete step-by-step
working system. We will take a look at a buy trade and at a sell trade and go
through each of the steps.

Following this system, we will get better than a 50/50 win loss ratio and we will
make every other part of our trading make us money.

What I want you to take away from this, more than anything else, is that you
can have a LESS THAN AVERAGE win ratio and still make money.

I want you to make money trading, and I want you to continually take trades
after you lose. This is where the "consistency" part of trading comes from, to
continually follow the rules trade after trade whether or not the last trade was a
winner or a loser.

Let's get into the examples.

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 Buy Trade
Step By Step - Buy Trade
Step 1: Identify the trend
The price is above the 13 EMA, the 13 EMA is above the 34 EMA.

Step 2: Setup
Price moves down to touch the 13 EMA. Setup box is drawn connecting the
swing high and the 13 EMA directly below the swing high and stretched to the
right.

Step 3: Entry and Stop Loss

Entry order is placed above the box and the stop loss is placed below the box.

Step 4: Target
Use the Fibo retracement tool to determine a 1.382 extension for the target.

Step 5: Management
As the first candle closes in profit, start moving the stop loss along the 13 EMA
of each newly opened candle.

Step 6: Break-Even
Watch for the market to get as far into profit as the initial stop loss was, then
move the stop loss to the entry level.

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 Buy Trade
Step 1: Identify The Trend
The price is above the 13 EMA, the 13 EMA is above the 34 EMA.

13 EMA is under the 34 EMA

Price is above
the 13 EMA

13 EMA is above
the 34 EMA

Step 2: Setup
Price moves down to touch the 13 EMA. Setup box is drawn connecting the swing high
and the 13 EMA directly below the swing high and stretched to the right.

Swing High
Box
13 EMA directly
under the swing
high

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 Buy Trade
Step 3: Entry and Stop Loss
Entry order is placed above the box and the stop loss is placed below the box.

Entry order
(buy stop)

Stop Loss

Step 4: Target
Use the Fibo retracement tool to determine a 1.382 extension for the target.

Target
Break-Even Profit box

Fibo Tool

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 Buy Trade
Step 5: Management
As the first candle closes in profit, start moving the stop loss along the 13 EMA
of each newly opened candle. The dark green square is the break-even
square, and this is where I overlapped the pink and green square to make
the dark green color.

Target
Break-Even level
Pink square overlapping the
green square to make a dark
green Break-even square Candle Closed
in profit
Stop Loss moved
to 13 EMA

Step 6: Break-Even
Candle touches the 1:1 ratio and the stop loss is moved to the entry level.

Price touches
break-even level
Stop Loss moved
to break-even

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 sell Trade
Step By Step - sell Trade
Step 1: Identify the trend
The price is below the 13 EMA, the 13 EMA is below the 34 EMA.

Step 2: Setup
Price moves up to touch the 13 EMA. Setup box is drawn connecting the swing
low and the 13 EMA directly above the swing low and stretched to the right.

Step 3: Entry and Stop Loss

Entry order is placed below the box and the stop loss is placed above the box.

Step 4: Target
Use the Fibo retracement tool to determine a 1.382 extension for the target.

Step 5: Management
As the first candle closes in profit, start moving the stop loss along the 13 EMA
of each newly opened candle.

Step 6: Break-Even
Watch for the market to get as far into profit as the initial stop loss was, then
move the stop loss to the entry level.

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 sell Trade
Step 1: Identify The Trend
The price is below the 13 EMA, the 13 EMA is below the 34 EMA.

13 EMA is under the 34 EMA

13 EMA is Below
the 34 EMA

Price is Below
the 13 EMA

Step 2: Setup
Price moves up to touch the 13 EMA. Setup box is drawn connecting the swing
low and the 13 EMA directly above the swing low and stretched to the right.

13 EMA directly above

the swing low
Box
Swing low

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 sell Trade
Step 3: Entry and Stop Loss
Entry order is placed below the box and the stop loss is placed above the box.

Stop Loss

Entry order
(sell stop)

Step 4: Target
Use the Fibo retracement tool to determine a 1.382 extension for the target.

Fibo Tool

Break-even Profit box

Target

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 sell Trade
Step 5: Management
As the first candle closes in profit, start moving the stop loss along the 13 EMA
of each newly opened candle. The dark green square is the break-even
square, and this is where I overlapped the pink and green square to make
the dark green color.

Stop Loss moved

to 13 EMA
Pink square overlapping the
green square to make a dark Candle Closed
green Break-even square in profit
Target

Step 6: Break-Even
Candle touches the 1:1 ratio and the stop loss is moved to the entry level.

Stop Loss moved

to break-even
Price touches
break-even
level

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 Trade Size
Position Size
One of the more important things to remember is position size. Any of the
examples we use, it's assumed that we trade a certain percentage of the
account.

A standard position size is 2% of our account.

We can use more or less as we like, but 2% is considered the default.

If we have an account of $1000, the trade we place will be positioned in such a

way that if we were to lose the trade and the initial stop loss is hit, we would
lose $20.

With the 5050 system, one of the really nice aspects is that we don't have to
hurry when we are figuring out the lot size of the trade. The entry and the stop
loss placement is determined long before the trade itself needs to be placed.

The lot size of the trade will change depending on the size of the top loss.
A 100 pip stop loss will have a smaller lot size than a 25 pip stop loss.

There are a ton of online position size calculators, but the one I use it at
russhorn.com/calculator:

The top calculator is

the one we use. It will
calculate the lot size
based on the number
of pips of the stop
loss, our account
size, and the risk
amount we choose.

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 Trade Size
Position Size
We will fill in the first part of the calculator then click Compute:

Click Compute
Curreny pair of the trade
Stop loss in pips
Risk amount in percent
Currency of the account
Account size

Money risked

Position Size
The number that appears in the Std box is the Standard Lot Size, this is the
number we put in the Volume field when we place an order.

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 Conclusion
Weight of a pip
Every pip saved is a pip in the bank
This makes more sense if we look at it form a 1:1 perspective. If we were to
take 2 trades, each risking 100 pips and targeting 100 pips. We lose 1 trade
and we win 1 trade, but with the losing trade, we were able to manage the
trade by a single pip.
If we win 100 pips, we bank 100 pips.
If we lose 100 pips, we lose 100 pips.
If we are able to take that 100 pips top loss and modify it so that we lose
99 pips, that 1 pip adjustment means we win 100 pips but lose 99 pips.
The difference is 1 pip, and that's 1 pip that we are ahead... 1 pip in the
bank.

The graphic below gives us an idea of the kind of positive "imbalance" using
the tricks in this manual provide. The darker blue sections are the 50% profit
we would get regardless, the pink sections are the losses we could incur, and
the lighter blue sections are the bonus profits we get. The skew will be
somewhat different from trader to trader, but the end result is like having a 1:1
ratio and winning 60 to 80% of our trades!

Win ratio
Target

Management
Break-Even

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 Conclusion
Wrapping It Up
Now that you have gone through the manual and learned the lessons, you can
see how it's possible to be an average trader and still make a good return.

Trading can be a very profitable business if you take care of the things that
matter most.

A high win ratio is surprisingly low on the list of things that are important to
achieve. Of course it helps to have a higher than average win/loss ratio, but as
you see, it's not critical that you do. By modifying a few of the other features of
your trading, winning only half of your trades will still result in you making
money.

If you adopt these methods of trading, you will be what is considered

"consistent". You will do the same thing day in and day out, trade after trade.
You won't be emotionally crushed if you lose a trade and you will feel confident
to trade after a loss.

Keep doing this and you will watch your account grow consistently over time.

Thank you for taking the time to read this manual, and I do hope
you choose to make use of the information we covered. You will
be glad you did!

Best of luck to you and your trading!

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