FOREXOMETRY.COM. Presents. Forex Profit Hawk

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1 FOREXOMETRY.COM Presents Forex Profit Hawk Forexometry Published by Alaziac Trading CC Suite 509, Private Bag X503 Northway, 4065, KZN, ZA Copyright 2014 by Alaziac Trading CC, KZN, ZA Reproduction or translation of any part of this work by any means, electronic or mechanical, including photocopying, beyond that permitted by the copyright law, without permission of the publisher, is unlawful. Trademarks: Alaziac Trading CC, Forex Profit Hawk, Forexometry

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3 Forex Profit Hawk Hi guys! Today, I want to show you a Fractal Lines indicator which I call the Forex Profit Hawk. This I had created by one of the best programmers in Forex and is something many traders can only wish for! Let s begin with the origins of fractals. The Fractals indicator was invented by Bill Williams. It is simple yet effective, and it could be used as a standalone indicator or in combination with other technical indicators. Every Fractal consists of a pattern of 5 or more bars/candles. Fractals show the possible reversal points in the market, and they could be either Up or Down. We have an Up Fractal when the middle bar is the highest bar, preceded and followed by two lower bars on each side. The middle bar has the highest high and there are two lower highs on each side (Image 1). We have a Down Fractal if the middle bar has the lowest low, and it is preceded and followed by two higher lows on each side (Image 2). Sometimes, Up and Down Fractals share their price bars as shown on the last image (Image 3). Image 1 Image 2 Image 3 Forex Profit Hawk 3

4 Now let s move on to the Forex Profit Hawk and how it could be used. The next image (Image 4) shows you what this indicator looks like. It consists of an Upper Blue line and a Lower Red line. Image 4 This is way more practical and useful than the regular Fractals indicator and in the next section of this report, I will show you why. Forex Profit Hawk 4

5 Uses Of The Forex Profit Hawk I. Support & Resistance Breakouts Fractals represent the points where price failed to hold resulting in a reversal. When the price breaks previous fractal levels, this means that a new trend strength arises, thus a new trading opportunity. These points represent momentum support and resistance levels. The simplest way to use the Fractal Lines indicator is to identify when these levels are broken and place trades in that direction. The entry rules are pretty simple: Buy Trade Rules 1. When a candle crosses and closes above the Resistance line, open a buy trade. 2. Set the stop loss a few pips below the Support line. 3. Set the take profit at least 2 times the stop loss, or close the trade when a candle crosses the Resistance line again in the opposite direction. Sell Trade Rules 1. When a candle crosses and closes below the Support line, enter a sell trade. 2. Set the stop loss a few pips above the Resistance line. 3. Set the take profit at least 2 times the stop loss, or close the trade when a candle crosses the Support line again in the opposite direction. When the price moves in our favor equal to the stop loss that has been set, move the stop loss to breakeven. This way, we are in a free trade. If the price retraces or reverses, the worst scenario we can have is to be stopped at our entry price and we wouldn t lose anything. Another technique that could be used here, especially if we decide to babysit our trade and close it when the price crosses the Support and Resistance lines in the opposite side, is to trail the stop loss. We can move it behind the price using the same distance as the stop loss, so we can secure some profits no matter what the market will do. I will show you exactly how this is done in the next page. Forex Profit Hawk 5

6 Here s an example of a long trade using the Support and Resistance levels the Forex Profit Hawk plots on the chart (Image 5). Image 5 At point A, the price breaks above the blue Upper Resistance line. The close of that candle is our signal to go long, so as soon as the candle closes above the Resistance line at point B, the buy order is placed. The stop loss for this long entry is set a few pips below the Support line at point C. The take profit is set at point D, which is twice the distance of the stop loss. Another option to close the trade is at point E, where a candle crosses the Resistance line again in the opposite side. If we would trail our stop loss, we would have waited for price to reach the same distance as the stop loss. So when price reaches point F, the stop loss is moved to breakeven at point B. When the price reaches point D, the stop loss is moved to point F. When reaches point G, the stop loss is moved to point D. We ll keep doing this until we get stopped out in profit of course. Forex Profit Hawk 6

7 II. Connecting Points For Trend Lines The Forex Profit Hawk shows the best swing high and low points to draw a trend line. This gives us some advantage as most of the other traders on the market are using this same high and low swing points to draw their trend lines too. Look for the points where the Fractal Line touches the price bars and draw your trendlines on them. In the next image (Image 6), you ll see how easy it is to draw trend lines based on these points. Image 6 As we see on Image 6 above, points A and B are the swing low points where the Lower Fractal Line touches the price candles. This is where an Up trendline can be applied. Points C, D and E are the swing high points where the Upper Fractal Line connects with the price bars. These points are where we ll draw our Down trendline. As you can see, it is really easy to use the Fractal Lines for drawing our trend lines on our charts. Forex Profit Hawk 7

8 III. Trend Confirmation The Forex Profit Hawk can help confirm the trend direction. The price tends to break above/below the Fractal Line in the direction of the trend. In an uptrend, you ll notice that price tends to break above the Up Fractal Lines than below Down Fractal Lines. In the example below, the Uptrend is formed from point A to point B. Price does not break below any Down Fractal Line at this range. Image 7 The opposite is true for a downtrend. When we will see more Down Fractal Lines broken than Upper Fractal Lines, then we are in a downtrend. As price moves in the direction of the trend, it will keep breaking across the Fractal Lines in the same direction of the trend. So, a failure to break the Fractal Line in the same direction of the trend is the first sign that price is in consolidation or is possibly changing the trend direction. When two consecutive Fractal lines are broken in the opposite direction of the trend, then the change in the trend is confirmed. From a Downtrend, a new Uptrend emerges when price breaks the Upper Fractal Line twice. Later, when price fails to cross an Upper Fractal Line and it crosses the Lower Fractal lines twice, we have a new Downtrend. Forex Profit Hawk 8

9 IV. Price Consolidation Warning When the price fails to break the Fractal Lines and it just bounces from one line to the other, the price is in a period of consolidation. During periods like these, we can expect a ranging price movement, and there will not be a clear trend until two consecutive Fractal Line breaks occur in the same direction. In the image below, you can see a period of consolidation. Image 8 Points A and B represent Lower and Upper Fractal Lines. At point C, the price fails to break the previous point A. It just turns to the opposite side where it fails to break point B and again moves to the opposite side. In these times, price is in a consolidation period. It is just ranging until we can see two consecutive breaks of one Fractal Line. Forex Profit Hawk 9

10 As I showed you today, the Forex Profit Hawk gives you Fractal Lines that are used for many purposes in trading. The best thing about it is that it can be used as a standalone trading system as I explained in the beginning. Apply this indicator to your charts and practice what I ve shown you in this report. I hope find this information helpful. Enjoy! Sincerely, P.S. If you have any questions, please don t hesitate to me here: support@forexometry.com Forex Profit Hawk 10