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1st Place Demo Trading

February 09 Challenge

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Name – Samuel Adegoke Adedoyin
Position – 1st Place
Percentage Gained – 2956.16%
Age – 33 years
Country – Nigeria
Occupation – Evangelical Drama Minister (Clergy)

Bio – My trading system is basically my guide to success. This trading system of

mine is nothing but a prosperity and wealth making trading system, without it and
consistent discipline I can never be a profitable Forex trader. It is my map to
success, and the heart of Forex business.

The F9D1 System

As a devote Christian, I believe the hand of God plays a part in everything I do,
this is particularly important in my trading. I also believe this will work for serious
minded-people and those who see Forex as an important part of their life and not
just as a game. My particular system trades frequently.

Markets Traded – Forex, GBP/JPY and EUR/GBP

Charts – Daily, 4 hour, 1 hour, 15 minute
Charting Software - Any
Indicators – 5 EMA, 10 EMA, 14 EMA, 21 EMA, 50 EMA
Lot Size
I determine my lot size, it all depends on what my equity is reading.

If your equity reads between $500 and $1,000, you may use 0.1
If your equity reads between $1,100 and $2,000, you may use 0.3
If your equity reads between $2,500 and $4000, you may use 0.5
If your equity reads between $5,000 and $8,000, you may use 1.0

Please note, you are solely responsible for the lot sizes you use, don’t
forget it all depends your appetite for risk taking in this business.

SYSTEM OVERVIEW

I have 3 stages of trading with my system

Stage 1: Pre-Trading System Actions

Stage 2: Trading System Actions
Stage 3: Post Trading System Actions
STAGE ONE:

Pre-Trading System Actions

The concept of this trading system is based on Exponential Moving Averages

(EMA), Chart Analysis/ Reading and Patience. My trading system could work
perfectly well on all the currency pairs, but I focused mainly on GBP/JPY and
EUR/GBP. When planning my trade in the Pre-Trading System Actions, I put
them on paper. I also consider the following steps:

1. I determine my lot size - it all depends on what my equity is at that time.

2. Write out my take profit on paper, this is something around 50 to 70 pips.
3. One currency pair at a time i.e. either GBP/JPY or EUR/GBP.
4. I start by looking at the 15mins, 1hr, 4hrs and Daily time frames for these
pairs.

These are the recommended time frames I use in my trading system. On my

trading terminal, I concentrate only on the above specified currency pairs, it
becomes mandatory to open all the time frames on the specified currency pairs
and that’s where my success lies.

Take a look at the following charts below on the different time frames. This is
how I open them and I insert my exponential moving averages, before going to
place any trade order.
THIS IS THE 15MINUTES CHART

THIS IS THE 1HOUR CHART

THIS IS THE 4-HOUR CHART

 THIS IS THE DAILY CHART

EXPONENTIAL MOVING AVERAGES

The Exponential Moving Averages are similar to the Weighted Moving Averages
in that they both assign greater weight to the most recent data.

The purpose of using these particular moving averages is to identify the trend of
the market. A common method involves looking at the direction of the moving
average and relation of the price to the Moving Average. For example if the
Moving Average is going down, and prices are below the moving average, the
market is considered to be in a downward trend, the opposite is true for an
upward trend.

Just take a close look at the chart below, you will understand my point better
TO GENERATE A BUYING/SELLING SIGNAL WITH EMA
2 to 3, or even 4 EMA’s must cross each other before a buying or selling signal
can be generated using different parameters.

I shall make do with all the 4 different parameters and give vivid examples of
each on different time-trames.

Here is a 15 minute chart, using 3 to 4 EMA’s to generate both buy and sell
signal on the same chart.

Figure 1.0

Here is a 1 hour chart using 3 to 4 EMAs to generate a buy SIGNAL

Figure 1.1
Let me quickly explain the purpose of the parameters in this Trading
System

The exact averaging period to be used will depend upon the purpose of the
moving averages, when I used the EMA’s to identify trend, then the length of the
averaging period should reflect the length I’m trying to identify. The longer the
trend, the longer the averaging period. For example, if am looking at a daily chart
to identify a long-term trend, I make use of EMA 21 and 50. But for a short and
medium term I do use EMA 5, 10, 14, and 21.

STAGE TWO:

Trading System Action

The next step is to insert my trading tools out from the default indicators; the first
indicator that I insert is EXPONENTIAL MOVING AVERAGES with 5 different
PARAMETERS which must be locked on all the charts. And they are as follows:

Brief Explanations on how I used my EMA’s based on the following parameters…

I insert EMA of 5, 10, 14, 21, and 50 all on 15 mins EUR/GBP chart
I insert EMA of 5, 10, 14, 21, and 50 all on 1 hour EUR/GBPchart
I insert EMA of 5, 10, 14, 21, and 50 all on 4 hours EUR/GBP chart
I insert EMA of 5, 10, 14, 21, and 50 all on Daily EUR/GBP chart

Let the EMA(5) be colour RED

Let the EMA(10) be colour PURPLE

Let the EMA(14) be colour ORANGE

Let the EMA(21) be colour BLUE

Let the EMA(50) be colour YELLOW

All the parameters must apply to close, and the shift must be 0 (zero). Once I
have done all the above, here is where the journey to trade begins.
SYSTEM RULES

TO DETERMINE UPWARD DIRECTION OPPORTUNITY (TREND) FOR

INTRADAY TRADING

Always look for the direction of the market before you jump in, i.e. where the
market is heading to, is it going to the up, down or ranging. You could ask
yourself where the direction of the trend of the market is heading.

To know where the market is heading to in a short journey, on the 15minutes

time frame, the 5, 10, and 14 EMA’s always have the answer to that question.

Watch this statement very well.

Whenever EMA 5 crosses EMA 10 upward on 15 minutes time-frame, please go

to Figure (1.0), to ascertain my logic, then later crosses EMA 14 still upward is an
indication to go Long (Bullish).

Now, when I discover such a move in the market, I won’t go long then nor take
any position. Why? Because PATIENCE is part of the tools in this trading
system, you must learn the path of patience, as they say “the patient dog eats
the fattest bone”. What I do next is to quickly check the 1 hour time frame chart to
determine where the direction is going to.

Fig 1.0

On 1 hour time frame chart, if EMA 5 crosses EMA 10 upward I then know it is a
good signal to go long. Just to confirm, I will also go back to the 15 minute chart
to see what is happening. If the 5, 10, 14, and 21 EMA’s cross each other
upward, that will now confirm my Long (Bullish Trend) and I will go long
immediately without hesitating.

Although, I will always be PATIENT, I will head straight to 1 hours chart to check
what the 5, 10, and 14 EMA’s are doing. If at the time the 5, 10, 14, and 21
EMA’s cross each other upward on the 15 minute chart, and on the 1 hour chart
the 5, 10, and 14 EMA’s cross upward, I will take action because this is a GOOD
SIGNAL that the market will go long.
Moreover, I will quickly check forex news / events websites to see if there are any
events coming out at the same time I am planning to take action. Then, once I
confirm and there is clear interpretation of the events or that none are coming at
that time, I will take the next step by placing a BUY ORDER but before I place
any order, I will also try to speculate how long the price could go. This is where I
implement the 3rd trading step by Charting or Chart Analysis.

I do chart analysis from chart history, i.e. what has happened in the past to a
particular currency pair, you will agree with me that at least 60% chart formation
are in valley and hill figures.

I study the chart and observe keenly what happened to the last 4 to 7 candle
sticks. From the open and close of the candle stick that formed the last top in
ascending order, deduct 5 to 10 pips from the value of the close of that
candlestick and use that value as my TAKE PROFIT level. That is how I will exit
from the trade.

Most of the time, I have 95% opportunities with this trading system. If I have seen
an avenue to go long then I will wait for the last candlestick to form a valley
before going LONG. At times I could harvest more than 100 pips in just 1 hour; if
only the 5 EMA crosses the 10 EMA on the 15 minute time frame.

TO DETERMINE DOWNWARD DIRECTION OPPOURTUNITY (TREND) FOR

INTRADAY TRADING

4 hour and daily charts are to complement or serve as a continuation of the last
day trading exercise.

The next day, the first chart I check is the 4 hour chart to check whether the trend
is continuing from the previous day.

If the 5 EMA crosses the 10 EMA upwards on the 4 hr chart or on the Daily chart,
I will go to the 15 minute time frame and check if the 5, 10, 14, 21, and 50 EMA’s
cross each other upward. If they have, I will just go long (buy), but before that I
will check if any economic events are coming up any time soon.

I could pocket more than a 150 pips. I just prepare to trade for a longer period of
time. I may need to baby sit my trade but I could set a wider stop loss of about
200 pips.

If I discover that the trade is moving against me for around 120 pips, I don’t look
to get out of the market. I remain calm and PATIENT. I will hedge the trade.

To hedge simply means to open a reverse position when I know that my initial
trade position is a bad one.

For example, if I placed a buy position and afterwards I discover that the buy
position I placed was wrong or a bad trade, instead of watching the market to
adversely go against me, what I will do at that moment is place an order to sell
the same currency pair I was initially buying.
I then wait until I know the bad position has reached its level of reversal and I will
then close the sell position that I opened, gather the profits, and close the buy
position at minimal loss. But I must make at least my 60 pips profit in the trade.

I will remove the stop loss, babysit my trade, read the chart to know when it is
safe to keep my profits, and allow the other position that was initially going
against me to retrace. And I would rake in profits from both trades.

TRADING THE BREAKOUT

Whenever the 5, 10, 14, and 21 or 50 EMA’s form a narrow path on the chart
they are in a range or in consolidation, i.e. the EMA’s overlap each other without
going either up or down.

Before I take any decision, I read my chart, if we had about 7 to 10 candle sticks
in the past that has formed few different sizes, it is a clue that a breakout is
around the corner.

.
This is how I trade these market conditions using my trading system. Since I
don’t know where the market will go and I want to make more profits, I will place
2 pending orders to buy and sell.

For my long order, I will read the chart to find the closest highest high candlestick
as my yardstick to take profit and the closest lowest low candlestick as my
yardstick to my stop loss. The reverse applies to short orders.

I place Pending Orders which will save me from making a wrong decision.
THE BEST TIME FRAME I USE WHEN TRADING THIS SYSTEM IS THE 1
HOUR CHART

Take a close look at this chart. The 1 hour time frame gives me a clearer picture
of where a reliable entry point and exit point is.

How to identify the Entry Point

Whenever the 5, 10 and 14 EMA’s cross the 21 EMA upward it is a good signal
to go long on the 1 hour time frame. I usually aim for between 40 and 60 pips.
The same rule applies to short orders.

How to identify the Exit Point

If after 4 hours, and all I could gather is just 20 to 30 pips, what I do next is to
place my cursor on the last two candlesticks, i.e. candlesticks that were formed 2
hours behind the candle that is currently open.

I check the open value of these candlesticks and the open value of the present
candlestick and if the difference is 5 to 10 pips, I know that it is time to exit the
trade and wait for another opportunity.
Brief explanation of the chart above

My entry point is 0.88450 and my exit point is 0.88873 that is 42 pips. The candle
sticks labeled 1-12 have open prices is not more than 10 pips apart from each
other so it tells me to exit the market, at most, at the 5th candle stick and wait for
the sell opportunity that eventually occurs at the 14th candle stick.

Now take a look at the graph again, if had not exited the market and grabbed my
42 pips or if I had waited for the uptrend to continue, I would have lost my 42 pips
profit and at the same time incurred further losses when the market suddenly
reversed at the 14th candle stick.

It is possible to always have a positive result with this system as long as you
abide by the rules.
Short Trade Examples

Here is a good example of a Short Trade on the 15 minute time frame.

At point A the 5, 10 and 14 EMA’s all crossed the 21 EMA downward so I placed
an order to sell. I placed my target limit 60 pips away at point B and this target
was reached easily.

Another Short Trade Example

At point A, the 5, 10, 14 and 21 EMA’s all cross each other in a downward
direction so I placed an order to go short at this point. I placed my target limit at
point B which is 60 pips away. As you can see the target limit was taken easily.

Long Trade Examples

Here is good example of a long trader generated 221 pips profit.

At point A the 5, 10 EMA’s cross the 14 EMA in an upward direction so I placed

an entry order to go long. At point C, the 5, 10 and 14 EMA’s all cross the 21
EMA confirming that there is a strong BUY signal.

You will notice that this trade was made on the 4 hour chart so I did not use the
60 pip target limit and instead decided to let my profits run. At Point B I decided
to exit the position with 221 pips after being in the trade for 3 days.
Another Long Trade Example

Here is another example of a long trade on the 4 hour chart.

This particular trade generated close to 190 pips in just 1 day. At Point A, the 5,
10, 14 and 21 EMA’s cross upwards. This is a clear signal to go long so I placed
a Buy Order and I made close to 190 pips in less than 24 hours.

Comments/Additional Note

WHY GBP/JPY and EUR/GBP?

From my own close observations these two currency pairs react to the market in
different opposite directions, i.e. there is a correlation. My trading system has
confirmed that, so if am buying on the GBP/JPY pair I could at the same time sell
the EUR/GBP pair and double my profits.

WARNING
There are risks involved with trading this way so proceed with caution because
you could double your losses if the market goes against you when you are not
looking.

STAGE THREE:

Post Trading System Actions

I keep a trading journal and always input my daily trades. I personally like to
close the trading day with a prayer.

This is all about the trading system that turned $100,000 to $3,056,160.92
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