Best Forex Plan Ebook

Welcome!
Best Forex Plan
Right now there is not another financial market in the world

more active than Forex. On average it trades more than
$1.5 trillion US dollars per day. Traders on the Forex
market are afforded the opportunity to trade on a market
that’s open 24 hours a day and to leverage up to 200 times
your money.
Each day, inexperienced and veteran stock traders come to

the Forex market to capitalize on its many opportunities.
In Best Forex Plan you’ll discover how you can trade Forex
to supplement your income or to turn it into full-time
career.
The trading strategies in this manual will teach how to

create your own trading strategy and begin using Forex to
your benefit.
Enjoy the journey.
Table Of Contents
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Copyrights © 2009 BestForexPlan.com. All rights reserved.
Best Forex Plan
i.Welcome 2
ii.Table Of Contents 3
I. A Little About The Forex Market 4
II. How To Trade Forex Successfully 6
II.1 – Day Trading Vs Swing Trading 7
II.2 – Choose Your Time Zone 8
II.3 – Choosing Your Currency Pair 9
III. Types Of Orders 10
IV. Indicators You Need To Use 12
IV.1 – MACD 12
IV.2 – Moving Average 19
V. Day Trading System 22
V.1 – Trading Examples 24
VI. Swing Trading System 30
VI.1 – Trading Examples 31
VII. How To Avoid Excessive Risks And To Protect 34
Yourself
VII.1 – Money Management 34
VII.2 – Brokers 35
VII.3 – Having A Trading Diary 36
VII.4 – Have A Solid System 39
VIII. Economic Indicators 41
IX. How To Keep Track Of The Most Important 44
Indicators
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VII. Disclaimer 47
VIII. Copyrights 48
A Little About The Forex Market
No other trading market affords you the opportunity to

make money like the Forex market.
There are several feature of Forex that make it superior to

other markets, such as:
• Leverage – There are great leverage possibilities with

Forex as you can trade up to 200 times the available
funds in your account.
• 24 hours market – From Monday through Friday the

Forex market is open all day every to give you the
opportunity to make trades.
• Worldwide market – Forex allows you to trade from

any place in the world. All you need is an Internet
connection.
• Advanced Technology – The technology available to

forex traders is extremely sophisticated and in many
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cases, it’s available free of charge. Professional trading

platforms and demo accounts are offered free by
many brokers. Demo accounts are especially helpful
because they allow you to learn about what it’s like to
trade on Forex without risking any of your money.
• Profit in Bull and Bear Markets – You can make

money whether the market is trending up or down.
• Cost – There are no commission charges from brokers

on the Forex market. Your broker only charges you
the spread, which is the difference between the bid
and the ask.
Many newcomers to Forex find all these things to be

advantageous as they get started as a trader. Many of
them have found success trading in their free time or as a
new career.
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How To Trade Forex Successfully
In order to trade Forex successfully, you need to:
1. Decide whether you’ll be a day trader or swing trader.
2. Decide which time zone you need to trade in.
3. Decide which currency pairs you’ll trade.
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1. Day Trading Vs. Swing Trading
The difference between day trading and swing trading is

pretty simple. A day trader is a trader who trades
throughout the day, while a swing trader is a trader who
only commits a short period of time per day to trading on
Forex.
As you might expect, day trading requires more of a

commitment than swing trading. Day traders need to be at
their computers for three to four hours a day so they can
seize on opportunities to make money.
On the other hand swing traders prefer to use charts which

they check on once per day and make their trading
decisions based off of that. Good swing traders can earn a
decent income.
Typically, day traders make a small profit on each trade but

they make a lot of them throughout the course of the day.
Swing traders make trades less frequently, but theirs tend
to be more profitable.
The best times to trade on Forex are during the overlap

between the European session and the US session which is
between 800 GMT and 1700 GMT
If you’re not in GMT you can visit:
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http://www.timezoneconverter.com/cgi-bin/tzc.tzc
and just convert to the time zone you’re in.
If you’re interested in swing trading, you might want to try

the 4 hours chart or the daily chart. With those charts, all
you have to do is review your charts to determine if there
any possibilities for you to make trades.
2. Decide which time zone you need to trade in
After you’ve determined whether you’ll be a trader or a

swing trader the next thing you need to do is to determine
the time zone you want to trade in.
The best times to trade Forex are:
• 8 GMT – 11:30 GMT
• 13 GMT – 17 GMT
• 1 GMT – 6 GMT (For Japanese Yen pairs)
If you’ve made the decision to be a swing trader, then you

need to review your charts at 22GMT because this is the
close of the day for most Forex brokers.
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1. Decide which currency pairs you’ll trade
Every currency pair has strengths and weaknesses. Some

traders prefer the euro (EUR) and the US dollar (USD) pair.
Others like the British pound (GBP) and the USD pair. Still
others choose the USD and the Japanese Yen (JPY) pair.
There are many pairs available so you will have to decide
on which pairs you will do most of your business.
It’s important to remember that each currency has its own

characteristics and when it’s paired with another currency
their relationship can seem unpredictable. You’ll learn
quickly that systems you develop for one pair won’t
necessarily work for another pair.
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Types Of Orders
There are several different types of orders to choose from
in the Forex Market. You should choose your order type
based on your trading habits and the system that you plan
on trading in.
Here are the four most important types of orders:
• Market Order – Is an order to buy or sell at the

current market price. You can perform a market
order whether you are buying or selling a currency
pair.
Market orders should be used with care because in
fast-moving markets it’s important to remember that
in a fast-paced market it is common for slippage to
occur during a Slippage is the amount the market
moves from the time an order is made and the actual
price of a transaction. The price can be difference from
the one you placed even if only a few seconds elapse
between the actual price and the price you chose to
buy or sell at. Slippage works both ways. It could
make you money or it could cost you money. Market
Orders almost always guarantee that you can
buy or sell a currency pair, but they don’t
guarantee the price that you execute your order.
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• Limit Order – It’s an order to buy or sell at a

certain limit price. Limit orders are preferred when
you wish to buy a currency below the market price or
sell a currency above the market price.
You set the price at which you would like to make the
order and it’s executed when the currency hits that
price, whether the price is trending upward or
downward. While there is no slippage with limit
orders, there’s also no guarantee that your order
will be filled as soon it’s made.
• Stop Order – A stop order is an order to buy above

the market or to sell below the market. It is most
frequently used when a trader is trying to limit losses
that were unexpected. It is also used when a trader is
trying to buy a currency at a price lower than the
current market price. A stop order can be used to
either cut your losses or to increase your gains. It is
good type of order to guard against predictability.
• One Cancels the Other (OCO) – This order is used

when you are placing a limit order and a stop-
loss order at the same time. The One Cancels the
Other order is very helpful in times of a volatile
market. It’s fairly simple. When you place one type of
order, say, a Stop Order at the same time as sway, a
Limit Order, one order is cancelled as soon as the
other one is executed. This is a good method to help
prevent you from losing a large amount on one trade,
but it can limit your profits on some trades as well.
•
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Indicators You Need To Use
There are two types of indicators you can use to help your
trading, MACD and Moving Average. First, let’s talk about
the MACD.
MACD:
The MACD can tell you not only what the current trend is
but whether or not it is strong.
The MACD lets you know if the currency pair you’re

interested in is trending up or down and if that trend is
strong or weak. In other words it’s very useful.
If you decide to use the MACD here’s what the chart will
look like:
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• The area where the chart is above the zero line is

when the MACD is trending upwards. When MACD is
giving this reading for a currency pair it’s a good
indicator of a strong buying period.
• Conversely, when the chart is below the zero line, as it

is in the first part of the graph above, this is an
indicator of a strong selling period.
• The bigger the MACD-Histogram bars, the stronger the

trend. When the MACD-Histogram bars are rising, this
means the trend is gaining strength. If the MACD-
Histogram bars are decreasing, this means the trend is
losing strength.
Let’s look at some examples:
✔ Example #1:
This first chart is a great example of what Bull Trend and

Bear Trends look like in an MACD. When the bars are
gathered above the zero line as they are here it’s an
indicator that a currency pair is trending upward and is
being bought. When the bars are gathered below the zero
line as they are on the left hand side of the above graph
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that means a currency pair is trending downward and is

being sold.
✔ Example #2:
The chart above is a good depiction of how to interpret the

data on MACD chart.
At point A, the size of the histogram bars are getting

bigger, meaning that the downtrend is picking up
momentum. But then it bottoms out. Then, as illustrated by
point B, the histogram bars start getting smaller and closer
to the zero line, meaning that the downtrend is losing
momentum.
✔ Example #3:
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Example number three is an example of how a trend can

gain and lose momentum above the zero line. At point A,
the histogram bars are getting larger, indicating an
uptrend. Once they reach their peak they begin a descent
as the histogram bars get smaller, indicating the uptrend is
coming to a close.
As you can see, the MACD is very helpful in making tends

easy to follow and understand, making them easier for you
to make a good decision. And the key to Forex trading is
making good decisions.
Another key feature of MACD is its ability to compare the

present trend of a currency pair with its previous
movements. In doing this the MACD confirms the strength
(or weakness) of trend. MACD allows you to see how strong
a trend is whether it’s upward or downward.
In a strong trend, whether it’s upward or downward, the

MACD goes in the same direction as the currency pair price.
The graph below depicts this.
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The MACD chart shows you that at points A, B and C, the

EUR/USD currency pair was hitting new lows, as was the
histogram for MACD. This is a clear indicator that the trend
is a strong one and you should react accordingly.
But the MACD can give you a clue to when a trend is

coming to an end. It does this when it reveals a divergence
between a currency pair price and the MACD histogram.
The chart below is great example of this.
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Where the EUR/USD hit a new low price at 9:10 on 29

September the MACD histogram had actually hit a low
around 6:30 and was actually losing strength as a trend.
When there’s a divergence like this, it’s a good indicator
that the trend is about to reverse its course.
We can find out whether this was correct or not by looking

at the next chart.
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In the previous chart, the EUR/USD was trending downward

while the MACD was not. This type of divergence is known
as Bullish Divergence (which is defined below). The
divergence by the MACD was an indicator that the EUR/USD
downward trend was about to reverse itself. As you can see
that’s exactly what happened, as the MACD gave us a hint
that the EUR/USD would begin an upward trend.
If you want to be profitable at Forex it’s important

for you to identify divergences between the price and
the MACD:
• The chart above depicts a Bullish divergence which

is when a price reaches a new low, while the MACD
does not. Forex traders can use the MACD to see that
this downward trend is fading and could possibly
reverse to an upward trend.
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• Alternately, a Bearish divergence occurs when a

currency pair price reaches a new high but the MACD
does not. This is an indicator the upward trend is
losing strength and there’s a good possibility for it to
become a downward trend.
Now let’s talk about the Moving Average indicator.
Moving Average:
The Moving Average is exactly what it says it is; it’s the

average price of a currency pair over a set period of time.
It allows you to see how much the price has been moving
over that time. As an example, a Simple Moving Average
20 is total of the last 20 closing prices of a particular
currency pair, divided by 20.
While it’s possible to calculate the average high or average

low price for a currency pair, the Moving Average is most
often measured by the closing price.
The Moving Average gives traders an idea of whether the

price of currency pair has been on an upward trend or a
downward trend, or no strong trend in either direction.
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The chart above shows when EUE/USD price was having an

uptrend, a downtrend and no trend at all.
In addition to depicting price trends the Moving Average is

also extremely important to identify what are known as
resistance and support points. The Moving Average can act
as a strong support (when the price is above the current
line), or a strong resistance (when the price is below the
current line).
This chart shows how the Moving Average supports a price.

On three different occasions the EUR/USD touched the
Moving Average, but it never fell below it. This information
is very helpful when considering a stop loss order.
So, to summarize on Moving Averages, it can be used to:
• Spot the trend – When the price of currency pair is

above the Moving Average, even though the Moving
Average is increasing, that’s a sign of an upward
trend. When the price of a currency pair is below the
Moving Average, even though the Moving Average is
decreasing, that’s a sign of a downward trend. When
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the Moving Average is nearly horizontal, that a sign

that there is no significant trend at all.
• Spot resistance and support areas - When you’re

debating to make a stop loss order it’s a good idea to
try to find any resistance or supports areas, regardless
of whether you’re in a long trade or trying to sell
short. Resistance areas can serve as buy points in the
case of an uptrend or sell points in the case of a
downtrend.
A final reminder. You can use both the MACD and Moving
Average in the event you are a day trader or a swing
trader.
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Day Trading System
Many day traders use five minute MACD charts (like the
one below) or a Moving Average 20. Each histogram bar
represents a five minute increment. So, in an MACD for an
entire day there will be 288 bars or 12 bars for every hour
of the day.
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Here are some rules that many day successful traders

follow:
• When the MACD is rising and above the Moving

Average 20 while it is rising, this is a strong indicator
of a bullish market or a buy signal.
• When the MACD is falling and below the Moving

Average 20 while it is falling, this is a strong indicator
of a bearish market or a short sell signal.
• As a general rule you should set your buy target at

40-50 pips, and your stop loss at 30 pips below the
price.
Let’s take a look at some examples and how you can

respond to them.
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Trading Examples:
✔ Example #1:
The chart, specifically in the spot where the arrow points

to, shows the EUR/USD above the Moving Average. This is
a great buy point as MACD is above zero and is moving up
at the same time as the price.
These are things to look for when you’re trying to identify a

good buy point. But we can get even more detailed. Here’s
how.
Find the most recent high point for a currency and draw a
red horizontal line across the top. When a currency’s price
rises above that red line, that’s a great time to buy it.
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In this chart you’ll see an example of when the currency

pair price did not rise above the previous high price.
This means that a buy point wasn’t put into effect. The
currency pair price (EUR/USD) fell back to the Moving
Average before it began climbing up again. But, we still
need to pay attention to the chart in case the EUR/USD
currency pair makes a surge.
Looking at the chart above you’ll see that all the conditions
for a buy are in place. The Moving Average 20, the Moving
Average and the MACD all are moving up. We just need to
see if the price gets past its previous high point (as noted
by the horizontal red line).
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And in the above chart, the buy point for the EUR/USD is
reached. That’s the area depicted in the circle. It’s
noteworthy that as soon the price reached the buy point
both the price and the buy point both started to fall back,
which tells you that this is probably a good time to exit this
trade.
Don’t forget that when the MACD drops while a price goes
up this is signal that the trend is fading. If you find yourself
in this situation it’s recommended that you sell at least half
of your position.
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✔ Example #2:
Let’s have a look at this chart. We can see the EUR/USD

price is rising, and the MACD is above 0 and rising. But the
price hasn’t hit its previous high yet, as indicated by the
solid horizontal line between 1.4245 and 1.4270.
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This next chart is heavily detailed, with lots of helpful

information. In the middle of the day the buy point was
triggered, but then the price soared past the previous high
price, thanks to a surge of nearly 200 pips (from 1.4255 to
over 1.4425. The fact that the MACD stayed strong
throughout the surge tells you that this was a currency pair
you should probably keep for a while. The dotted blue lines
indicate this trend.
If you look at the MACD you’ll see there was as a bearish

divergence, an indicator that the trend could potentially
change. This shows the value of MACD, where it is
predicting a reversal of the current price.
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✔ Example #3:
Our third and final example depicts an instance of a Short

Sell Signal. The GBP/USD was under the Moving Average
20. The Moving Average 20 was trending down while the
MACD was below 0 and trending down as well. Much as you
did when noting the previous high price with a horizontal
red line, you can note the previous low price in the same
way. When the price drops below that horizontal red line
this means it’s time to sell.
Once the short sell signal was triggered, GBP/USD began a

trend that dropped started a 300 pips slide from the 1.4740
range to the 1.4425 range. Just think of how much you
would have lost had you not sold at the sell signal. And you
never would have known about this trend without using the
MACD chart to identify a sell signal.
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Swing Trading System

The only difference between the swing trading system and
the day trading system is the swing trading system
functions on 4 hour, daily and weekly charts. Day trading
uses 5 minute and 15 minute charts.
Here are some basic rules of swing trading:
• When the MACD is gaining strength, and the currency

pair price is rising (while staying above the MA 20)
this should be interpreted as a buy signal.
• A short sell signal occurs when the MACD is losing

strength and the currency pair price is also losing
strength, particularly if it’s falling below the MA 20.
• You should target your buy signal at 200-250 pips

and your short sell signal at 100 pips.
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Trading Examples:
✔ Example #1:
This chart reflects a buying opportunity. The GBP/USD is

above the Moving Average 20 and the MACD is above 0 and
trending upward. Once the price goes above the most
recent top, as indicated by the red horizontal line, there is
an excellent buying opportunity.
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It turned out that this turned out to be a huge rally (1000

pips) that only faded when the MACD began losing
momentum.
✔ Example #2:
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Here we see a good example of a short sell signal. The

Australian Dollar/US Dollar 4 hour chart and the MACD
(which is already below 0) are trending downward, as the
arrows indicate. So, the point where the price falls below
the recent high (as indicated by the red horizontal line) is
when this becomes a short sell signal.
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This turned out to be a strong downtrend. At the .7080

price there was another short sell signal as the conditions
for it were replicated.
Once again, as it had when the price was rising, the trend
lasted until it began to diverge from the MACD.
How To Avoid Excessive Risks And To Protect

Yourself
Money Management:
Protecting your account is the first priority of any money

management system so you should always follow their
rules closely.
Generally speaking you should never risk more than 5%

of the total value your trading account on a single
trade. So, if there’s an unexpected down trend you won’t
suffer much because you didn’t expose yourself
unnecessarily.
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Let’s say you have $1000 in your account. That would

mean you would never risk more than $50 in any one
trade. You should think in terms of small trades. This is the
key to managing your account. If you only risk a small
amount of your account, such as 5%, you would have to
take losses on 20 consecutive trades before you finally lost
your account. This is the kind of statistic you need to be
thinking about when you’re developing a money
management system. You should always protect yourself
from unpredictable events.
Brokers:
One of the hardest things for new Forex traders to do is to

find a good broker. The reason why it’s so hard to find a
good broker is because they are unregulated. In other
markets, when brokers do well their clients often do well
too. That’s not the case with the Forex market as brokers
can chase stop loss orders or end their relationship with
you if they’re not making enough money from you.
You’ll have to do some research to find a good broker. One

thing that is absolutely required is a broker who can
guarantee the safety of your funds.
Two good websites for you to begin your research for a

broker are:
www.forextopten.com and www.forexpeacearmy.com.
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They contain ratings and you can read what customers say
about their brokers. You’re sure to find helpful information
at each site.
Having a Trading Diary:
Although it is important to have a good broker, it might not

be as important as keeping a trading diary. A trading diary
is what you use to manually keep track of all the trades you
make, what statistical factors went into making the trade
and what your emotions were in the moments before you
executed a trade.
The more elaborate your trading diary is the more helpful it

will be for you. It will help you avoid making the same
mistakes twice.
Let’s give a scenario where keeping a trading diary would

help you if you were a day trader.
Imagine you’re waiting for a currency pair to surpass its

previous high and you’re following along in your charts so
you know when to make your next move. That time while
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your waiting is when you should make an entry into your

trading diary. What currency pair are you trading? What are
the statistics that led you to this decision? How do you feel
now that you’ve made the trade is about to happen? Once
you enter the trade you should write down what you’re
feeling in the moments after it happens. Occasionally, you’ll
need to close a trade earlier than you expected. Sometimes
you’ll hold onto a trade longer than you thought you would
because you just have a sneaking suspicion that something
will change. When you finally do exit the trade you should
do exactly what you did in your diary when you entered the
trade. Write down all the factors, statistics and emotions
that went into your decision.
This may seem silly at first but it will definitely help you
become a better trader in both the short term and long
term.
Keeping a trading diary is also a good way for you to re-

evaluate the systems that you use. Imagine a scenario
where you left a trade before the price reached the buy
signal or it reached the sell short signal. This would be an
example of you going against your system rules. You can
then see if going against your rules actually worked to your
benefit. You can ask yourself what prompted you to go
against your rules. This may also make you reconsider your
rules. If you write all these factors down in your trading
diary you won’t need to wonder what to do when such a
situation comes up again.
But the trading diary isn’t only helpful when it comes to

individual trades or individual situations.
Think of a day where you had trouble focusing. Maybe

there was something on your mind from another part of
your life that was clouding your decision. When you write
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down what’s going on, you allow yourself to be more

thoughtful and force yourself to slow down the decision-
making process. Even if you’re not writing down what’s
happening with your trading day, your trading diary is a
great tool to help you clear your mind and ultimately make
more effective trader. It’s amazing how many traders have
learned this once they started keeping a trading diary.
One other thing that you should write in your trading diary
is the time you’re willing to invest in Forex trading. If you
write down the hours you plan on trading, say, between 14
and 16 GMT, you’ll begin to think of this time as a
commitment. It’s almost like an appointment you made
with yourself, which is an appointment that you probably
won’t be eager to break.
There are many traders who are very precise when it

comes to their diaries. They write down every detail they
can think of. From the time they wake up, to the first trade
of the day, to the time they shot off their computer, there’s
no such thing as a detail that’s too small. These types of
traders tend to be very successful. But there are also many
successful traders who only write down the details around
their trades and ignore everything else. Once you start
using your trading diary, you’ll see for yourself which
technique works best for you.
We’ve spent a lot of time discussing in this section

discussing what to write in your trading diary. The most
important thing to do with your trading diary is to read it.
What good are all the notes and reminders and details if
you never read them? This is, after all, how you learn.
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Have A Solid System:
What does it mean to have a solid system? It sounds easier

than it is. A solid system is one that has, time and again,
helped you make money.
You may not realize this, but not all Forex traders have the
same data. Furthermore, when they are looking at the
same data they may see different things. What one broker
sees a buy signal might be a Bullish divergence. The reason
for this is that they have different systems.
One of the first things to do when planning a system for

yourself is check the time frames you want to do your
trading. It’s very important to find a trading time that you
can stick with day after day. Consistency is one of the keys
to developing a system and you want to create a system
that you can repeat, day after day.
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Once you’ve selected the trading time you should open a

demo account. A demo account will be provided to you free
of charge by most brokers. You can use the demo account
to test your systems and your ideas without fear of losing
any money. This allows you the benefit of being able to
adapt or change your system stress-free.
It may take some time for you to find a system you’re truly
comfortable with. But you should not open an account with
a broker until you’ve found such a system. Once you do
have a system and a broker you begin trading in a
confident, informed manner.
Economic Indicators
One of the keys to developing a system is to know how to
interpret the many economic indicators. To start with, you
need to know when the important indicators relating to
Forex will be released. You need to be able to plan your
trading accordingly. If you are unprepared for the release
of an important indicator, it’s possible that you could get
caught off guard. Getting surprised by information is one of
the main reasons traders lose money.
Another thing you’ll realize is that there is a lot of trading

activity near the announcement of an economic indicator.
All the other traders are basing their trades off the
economic indicators, too. If you are using a market order
(see the chapter on Types of Orders) you’ll learn quickly
that a lot of slippage happens on the day economic
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indicators are released. The price can change very quickly

which could end up costing you money.
Should you be the type of trader that uses limit orders it’s
possible that there a broker might actually make the order
different from your limit price during very busy times.
Therefore, you should avoid setting up limit orders around
the time of announcements of economic indicators.
The most important Economic releases are:
• GDP (Gross Domestic Product)

• CPI (Consumer price index)
• PPI (Producer Price Index)
• Nonfarm Payrolls
• Interest Rate Decision
• Retail Sales Index
• Durable Goods orders
• Consumer Confidence
• PMI (Purchasing Managers Index)
• Housing Starts
Their definitions follow.
✔ Gross Domestic Product (GDP)

The Gross Domestic Product indicator is the total value of
goods and services that have been produced within the
borders of a country by either local or foreign
manufacturers. The GDP is considered the best indicator of
a country's economic state because it reflects the pace the
economy of a particular country is growing.
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Best Forex Plan
✔ Consumer Price Index (CPI)

The Consumer Price Index is the change in price of a
defined set of consumer goods and services. The CPI is the
way to measure the level of inflation in a country from one
month to the next. This is an important indicator for Forex
traders when considering the currency rate of the country
releasing its CPI.
✔ Producer Price Index (PPI)

Where the CPI reflects the costs of the goods to consumers,
the Producer Price Index shows the price that
manufacturers are getting for their goods. The agriculture,
manufacturing, utility and mining industries are the key
sectors that contribute to the PPI. In conjunction with the
CPI, the PPI is a good measurement of inflation.
✔ Nonfarm Payrolls
The most important indicator for Forex traders is the
Nonfarm payrolls. They are released in the first Friday of
every month, and their announcement almost always
results in the most volatility to the Forex markets. This is
true whether news is good or bad.
✔ Interest Rate Decision

If the Nonfarm payrolls announcement is the most
important indicator for then the Interest Rate decision
might be the second most important. The Interest Rate is
an announcement from the central bank of a country. Since
the Forex market is tied directly to currency pairs the
announcement of interest rates has a direct bearing on
whether a currency pair while increase or decrease on
value. The interest rate does not change according to a set
calendar, so when there is a change it results in an extra
jolt of volatility in the Forex market.
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Best Forex Plan
✔ Retail Sales Index

The Retail Sales Index measures the goods sold within the
retail industry, regardless of the size or type of business.
✔ Durable Goods Orders

The Durable Goods Orders reflects the amount that
consumers are spending on long-term purchases. Durable
goods are considered items that are expected to last for
three years or more. The Durable Goods Orders
announcement is a strong indicator of the performance of
the manufacturing sector.
✔ Consumer Confidence Index

Consumer confidence measures the confidence consumers
have in the stability of the economy and their spending
power. This indicator is useful to measure the health of the
economy.
✔ Purchasing Managers Index (PMI)

The National Association of Purchasing Managers (NAPM)
releases a monthly index that gauges the predicted growth
in the manufacturing sector. Since it’s a report from a
group as well-respected as the NAPM, the release of the
Purchasing Manger’s Index is always met with interest.
✔ Housing Starts
The Housing Starts monthly report provides three
important statistics: housing starts, building permits and
housing completions. There are many experts who relate
these statistics to consumer-based indicators to get a clear
picture of the economy. Forex traders are no different in
coupling this data with other indicators to get a meaningful
prediction.
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Best Forex Plan
How To Keep Track Of The Most Important

Indicators
All you really need to keep track of the most important

indicators is a good economic calendar. Many traders prefer
this one: http://www.dailyfx.com/calendar/.
The Daily FX Calendar is great tool because it lets you pick

the currency you’re most interested in and then adjust the
economic indicators by their level of importance to you.
Assuming you’re only interested in the most important

economic indicators that will be released in US and Europe,
you can then adjust your calendar as follows:
All you have to do is uncheck, the low and medium boxes

and all the non-European and non-American boxes as in the
chart below.
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Best Forex Plan
Then you just click the “Apply Filter” button, you’ll be set to
receive the most important economic indicators relating to
the EUR, USD and NZD. Your reports will look something
like this:
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Best Forex Plan
Then you can just click on the link to read more about the
economic release in question. Reading these is almost
always helpful in anticipating any volatility that may result
in the Forex market from their releases.
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Best Forex Plan
Disclaimer
There is a very high degree of risk involved in trading. In
any market where a potential for profit exists, there exists
also a risk of loss.
Forex trading is a risky business. You should never trade

with money you cannot afford to lose. None of the
information on our website nor any information or
education provided to the client by any means assures that
the client will make money in the Forex market.
Although every effort has been made to assure accuracy,

the authors and publishers can assume no responsibility for
errors or omissions. Neither the author nor the publisher
will be responsible for the use or misuse of the information
contained herein.
Examples are provided for illustrative purposes only and

should not be construed as investment advice or strategy.
It is not intended as professional advice or a
recommendation to act. Before engaging in any activity
mentioned in this ebook, seek the advice and consultation
of a competent professional.
Past performance is not indicative of future results.
Copyrights
47
Best Forex Plan
The material in this manual is property of

BestForexPlan.com. This material cannot be copied in part
or in whole without the express written permission of
BestForexPlan.com.
Anyone who attempts to alter this material without the

permission of BestForexPlan.com will be prosecuted to the
fullest extent of the laws and will be liable for reimbursing
BestForexPlan.com for all lawyers and court fees.
48

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Welcome!

Best Forex Plan

Right now there is not another financial market in the world

Each day, inexperienced and veteran stock traders come to

The trading strategies in this manual will teach how to

Enjoy the journey.

A Little About The Forex Market

No other trading market affords you the opportunity to

There are several feature of Forex that make it superior to

• Leverage – There are great leverage possibilities with

• 24 hours market – From Monday through Friday the

• Worldwide market – Forex allows you to trade from

• Advanced Technology – The technology available to

cases, it’s available free of charge. Professional trading

• Profit in Bull and Bear Markets – You can make

• Cost – There are no commission charges from brokers

Many newcomers to Forex find all these things to be

How To Trade Forex Successfully

In order to trade Forex successfully, you need to:

1. Decide whether you’ll be a day trader or swing trader.

2. Decide which time zone you need to trade in.

3. Decide which currency pairs you’ll trade.

1. Day Trading Vs. Swing Trading

The difference between day trading and swing trading is

As you might expect, day trading requires more of a

On the other hand swing traders prefer to use charts which

Typically, day traders make a small profit on each trade but

The best times to trade on Forex are during the overlap

If you’re not in GMT you can visit:

and just convert to the time zone you’re in.

If you’re interested in swing trading, you might want to try

2. Decide which time zone you need to trade in

After you’ve determined whether you’ll be a trader or a

The best times to trade Forex are:

• 8 GMT – 11:30 GMT

• 1 GMT – 6 GMT (For Japanese Yen pairs)

If you’ve made the decision to be a swing trader, then you

1. Decide which currency pairs you’ll trade

Every currency pair has strengths and weaknesses. Some

It’s important to remember that each currency has its own

• Market Order – Is an order to buy or sell at the

• Limit Order – It’s an order to buy or sell at a

• Stop Order – A stop order is an order to buy above

• One Cancels the Other (OCO) – This order is used

Indicators You Need To Use

The MACD lets you know if the currency pair you’re

• The area where the chart is above the zero line is

• Conversely, when the chart is below the zero line, as it

• The bigger the MACD-Histogram bars, the stronger the

Let’s look at some examples:

This first chart is a great example of what Bull Trend and

that means a currency pair is trending downward and is

The chart above is a good depiction of how to interpret the

At point A, the size of the histogram bars are getting

Example number three is an example of how a trend can

As you can see, the MACD is very helpful in making tends

Another key feature of MACD is its ability to compare the

In a strong trend, whether it’s upward or downward, the

The MACD chart shows you that at points A, B and C, the

But the MACD can give you a clue to when a trend is

Where the EUR/USD hit a new low price at 9:10 on 29

We can find out whether this was correct or not by looking

In the previous chart, the EUR/USD was trending downward

If you want to be profitable at Forex it’s important