net trap book:gr bookpages 3/3/10 16:16 page 1 forex ... · 1. open the spot fx gbp/usd chart. to...

Independent Forex Tradingin 5 Minutes a Day

By Richard Hill

ForexNet TrapSystem™

ForexNet TrapSystem™

Net_Trap_Book:GR_bookpages 3/3/10 16:16

The Forex Net Trap System

CONTENTS PAGE

� Forex Net Trap System Overview........................................................................................................1

� 10 Point Summary of What to Do ....................................................................................................3

� Step by Step Guide ....................................................................................................................................5

� Getting a Trading Account ....................................................................................................................5

� Setting Up Your Chart ............................................................................................................................7

� Net Trap System Blueprint ..................................................................................................................15

� Trade Signals ..............................................................................................................................................16

� Risk Management ....................................................................................................................................19

� No Trade Rules..........................................................................................................................................21

� Trade Signal Examples ..........................................................................................................................23

� When the Market is Moving Quickly ............................................................................................29

� A Note of Caution ..................................................................................................................................31

� Placing a Trade at-IG Index ................................................................................................................33

� Placing a Live Trade at the Market ..................................................................................................41

� To Close an Open Trade at 8:30 am ..............................................................................................43

� Placing a Trade at ODL Markets ......................................................................................................45

� A Month of Chart Examples ..............................................................................................................47

� Questions and Answers ........................................................................................................................59

� A Final Word ............................................................................................................................................61

Forex Net Trap System

Net_Trap_Book:GR_bookpages 3/3/10 16:17 Page 3


Risk Disclaimer

No responsibility for loss occasioned to any person or corporate body acting or refraining

to act as a result of reading material in this report can be accepted by the Publisher, the

Author or any employees or agents of either.

It is up to the reader to ensure that any trade or trades he or she places, if any, give effect

to his or her wishes. Spread betting is not suitable for everyone – ensure you fully

understand the risks involved and never risk more than you can afford to lose.

© Copyright 2009 Agora Lifestyles Ltd. All rights reserved. No part of this report may be

reproduced by any means or for any reason without the consent of the publisher.


Net Trap System OverviewWelcome and thank you for investing in the Net Trap System.

This marks you out as someone who is serious about learning how to trade forex.

Well done, you are on your way to becoming an independent forex trader.

We‘re going to get straight into this. I’m going to show you exactly what to do step by

step, so you can be up and running in no time.

Before I take you through step by step, I want to give you a short summary though of

the Net Trap System.

Ok, here we go, the Net Trap System is ideal for busy people who want to use a quick,

low risk, high profit potential, forex trading method.

It uses a simple chart, and allows you to independently decide whether to place a forex

trade order, just after 6:30 am, on Monday to Friday British Pound (GBP/USD) trading

days.

Ok, I know that is very early, but many of us are up and getting ready at that time.

After a little practice, you could do this in about the same time it would take you to brush

your teeth.

This is something you should easily be able to fit into your busy schedule.

With this system you’ll be able to place an order for a trade on your laptop in 5

minutes, and then walk away. You could then finish getting ready, catch your train or even

go jogging.

You then come back and check the computer 2 hours later at 8:30 am.

You can even do this last part on a mobile phone now. Or you could check when you

get to work.

The beauty of this system is you don’t need to sit watching your computer for hours on

end each day.

You can learn how to use this system very quickly.

Remember once you learn this, you could use it for years. You will be able to glance at

one chart and see almost instantly if there is a forex trade.

On days when there is a trade set up, you could place an order and walk away. The

trade will either hit the profit target or stop loss automatically, or you will manually close


1


it at 8:30 am.

Don’t worry if these terms sound scary now, it is so easy and this will soon become

second nature to you.

I’m going to show you step by step exactly how to do this using real trade examples.

The system is designed to capitalise on the big movements that often happen in the

British Pound (GBP/USD) between 6:30 and 8:30 am.

Please note this system is designed for the GBP/USD forex pair only.

This system is called ‘Net Trap’ because it is like fishing by setting a net at low tide,

waiting for the tide to move, then coming back a couple of hours later to see what you’ve

caught.

You don’t have to wait with a rod for your float to move; you just go about your

business and return a couple of hours later.

Personally I love trading like this. It means you can get on with your life, while still

taking advantage of this amazing forex opportunity.


2


10 Point Summary of What to Do1. Get up around 6:20 am

2. Turn on your computer (you can make a cup of tea as your computer warms up)

3. Get online and log in to your Spread betting account.

4. Open GBP/USD chart . Check the simple trade signal (explained below).

5. Wait for the close of the candle at 6:30 am candle.

6. Place an Order to Open for a buy or a sell trade with an ‘if done’ Stop loss and

Profit Limit Order.

7. Confirm your order and check it is correct.

8. Leave your computer, have breakfast, go jogging, get ready, catch your train.

9. Check your Spread betting account 2 hours later at 8:30 am.

10. At 8:30 am if the trade has not hit the profit target limit or the stop loss

automatically, close it manually. If the trade order has not been executed, cancel

the order.


3

Open your Plus Account with IG Index and you’ll receive the TradeSense education

programme which allows you to build your confidence by placing bets at just 10 pence

per point – one of the lowest bet sizes in the market.

This comprehensive free course covers everything you need as you go through your

trading life: from learning about the markets and placing your first online trade to

ongoing expert tutorials.

IG Index provide TradeSense members with a ring-bound folder and send out the latest

module each fortnight. By the time of your 'graduation', you will have received all six modules

creating an indispensable 100+ page guide to the world of spread betting.

Highlights of IG Index service, include:• Deal online from just 10 pence per point

• Free 100+ page, six-module guide to spread betting

• Expert seminars – tailored to your experience

• Dedicated trading helpline

Visit wwwwww..nnttssyysstteemm..ccoo..uukk to open your account today!



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Notes


Step by Step GuideWe’re going though this step by step.

I’m assuming you have never traded forex before and don’t have an account.

If you do and already know the basics you may want to scan this part.

Please don’t miss it all though as there is still important stuff in there particularly

about risk management which everyone needs to understand.

Getting a Trading Account

I use spread betting to trade forex as profits are tax free in the UK.

This is one of the reasons why I love this so much.

It’s such a great feeling knowing the tax man isn’t getting his grubby hands on any of

your profits.

I have found IG index to be one of the best spread betting providers out there.

You can practice for only 10p a pip for an initial period.

You can learn and risk very little money. Their trading spreads are also low.

To open an account go to: http://www.ntsystem.co.uk

Open a Plus account today and you’ll receive the TradeSense education programme

which allows you to build your confidence by placing bets at just 10 pence per point – one

of the lowest bet sizes in the market.

Remember, you can practice for only 10p a pip

You can open an account 24 hours a day.

When you reach the link screen you have a choice between a Plus Account and a

Limited Risk Account.

Personally, I choose a Plus Account as the spreads are lower and the risk of a stop loss

not being hit, are relatively low. You can decide what suits you by reading the Find out

More tabs.

You then can press Start Application red button on right hand side if you decide to

open an account, as shown on the next page.


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There is no minimum deposit necessary to open an account. You would need to

deposit at least £5-£10 though to start trading 10p a pip.

I told you forex is no longer exclusively for the rich.

I’m going to explain later how much you should have in your account for conservative

risk management though. This is very important.

The application forms are self explanatory, and I find their help desk is efficient. If you

have any questions you can always call them.

Starting anything new seems a bit strange at first. Self doubts like can I really do this?

Am I cut out for this? Can stop us learning new skills.

The first step is often the hardest, but as soon as you do something practical you could

begin a life changing journey.

It should only take around 10 minutes to submit your application. IG Index sometimes

have to do some checks but normally they come back to you same day.


6


Setting Up Your ChartOk so you now have your trading account set up. I’m going to show you how toset up your chart so you’re ready to roll.

Most spread betting companies offer simular free charting software. You don’t need

any other fancy software to use this strategy.

There may be small variations on how to set up the chart but I explain below using

one of the most common charting softwares.

Remember you can always call your provider if you have questions, their customer

service staff are usually very helpful and can get you up and running very quickly, if you

do get stuck.

The IG Index Customer Service Number is 0800 409 6789 or 020 7896 0079 or you

can email the Help Desk at [email protected]

To set up your chart, firstly log into your spread betting account:

1. Open the Spot FX GBP/USD chart.

To do this first find GBP/USD Spot Forex or sometimes called GBP/USD Rolling

Daily.

On the IG Index platform as soon as you log in, the above markets page

should appear.

Find Spot FX GBP/USD under Market about half way down and then click the Quick


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Chart icon, to launch the chart.

The Quick Chart Icon looks like a tiny chart with a line through it.

The default chart will open and it sometimes looks like this. It takes around 20

seconds to launch the chart.

You do need broadband for this though.

You may have to download a java add on but this should only take a minute.

2. Open the Settings Tab at the bottom left hand corner of the chart and theSettings box will open like below.


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Change the Settings as shown below. At the top under Style, using the drop down

menu select Candle stick.

A candle stick shows the price movement for a period in time.

On a 15 minutes candle stick chart each candle stick represents 15 minutes of price

movement.

A red candle stick means the price went down for the 15 minutes. At the start of the

period the price was at the top of candle stick body and at the end of the period the price

was at the bottom of the candle stick body. The price has fallen.

A green candle stick means the price went up for the 15 minutes. The start of the

period the price was at the bottom of candle stick body and at the end of the period the

price was at the top of the candle stick body. The price has risen.

The thin black lines above and below the candle stick bodies are sometimes called

wicks and they show the highest and lowest price points for the 15 candle stick period.

3. Change the Moving Average indicator by changing the boxes next to MA,

underneath the Style menu.

The chart automatically has the default MA settings for 20, 50 and 100 bar moving

average.


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Delete the 20 and the 100 and change the 50 box in the middle to 40 as

shown below.

The Settings box should now be exactly as shown above.

4. Close the Settings Tab by clicking the cross in the top right hand corner.

5. Select the 15 minute timeframe using the drop down menu, on the bottomright hand corner of the screen highlighting 15 minutes (as shown below).


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The chart should change to 15 minutes candle sticks as below.

6. Save the settings for the chart so you can use each day by clicking the Saveor Load Your Graphs button next to the Settings button in left hand bottomcorner.


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Press the Save or Load Your Graphs Button, to the right of Settings bottom left hand

corner.

Press the Save/Delete option and the above Template box will appear. Put Net Trap in

the lower box and save the chart setting.

Press Save and the chart template is saved. You can also press the save button to the

right of the Save and Load Your Graphs button to save the chart as your default chart.


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You can then select this chart anytime when you log into your spread betting platform

by clicking the Save Chart button as shown above.

Give yourself a pat on the back, you have now set up your chart and are ready to learn

how to use the Net Trap Trading Strategy.


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Notes


Net Trap System BlueprintSo I’m now going to take you through the detailed trading blueprint summarisingthe Net Trap System.

Don’t worry if it looks complicated at first.

Like anything new, first time seems tricky but after repeating it a few times, it becomes

second nature.

I go through many actual trade examples after this blueprint and it will become very

clear to you.

When you learn this strategy, you will soon be able to open a chart, and see within

minutes whether there is a trade set up.

You could soon be an independent forex trader.

Open the 15 minute Spot FX GBP/USD chart with the 40 bar Moving Average (MA),

as explained in the ‘Setting your chart’ chapter.


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Trade Signals

Check the chart at the close of 6:15 am candle at 6:30 am.

Buy Signal

A). At 6:30 am the 40 MA (the thin pink line) is going up over the previous 10

candles (ignoring candle sticks when it is not rising or falling, and is flat or the same).

I have marked the 6:15 to 6:30 am candle stick with a black vertical line above.

The 40 MA, the thin pink line is clearly rising (going up) for the previous 10 bars.

Note the 40 MA line must be rising by at least 1 pip during the last 10 candle sticks

and with no more than 2 consecutive candles where 40 MA is falling.

Ignore candles where 40 MA is not rising or falling and is flat.


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You can see the value of the 40 MA for any candle stick by placing the cursor over the

candle stick and the data window will appear as below.

Above I highlight the 4:00 to 4:15 candle 10 candles back and the value of the 40 MA

is in the bottom of the data window as 16506 (this would be quoted as 1.6506 at other

spread betting companies).

Often you can see whether the 40 MA line is rising without checking every candle

stick, it is obvious to the naked eye as above.

This means the average value of the last 40 candles is rising and indicates the current

trend is a rising market.

Note - IG Index quote GBP/USD as 16506.05 as opposed to 1.6506 at most other

providers.

If there is no clear direction to the 40 MA (pink line) don’t place an order.

B). If A). Above is satisfied (40 MA is going up over the last 10 candles) consider

placing an order to Buy at the high of the 6:15 candle plus 2 pips plus the spread. (the

GBP/USD spread is normally +3 pips, so place an order to buy at the 6:15 candle high

plus 5 pips).

To do this place the cursor on the 6:15-6:30 candle when it closes at 6:30 am.

The data window opens and you can see the highest number.


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In this example, the highest the market went was 16552.1 as shown below.

You would place an order to buy at 16557.0 at IG Index or 1.6557 with another

provider. This is 16552 plus 5.0 (5 pips)

I usually round the IG Index number to the nearest whole number.

This is adding 5 pips to the highest point of the 6:15 candle. In forex prices are

normally quoted to 4 decimal places and a pip is normally 0.0001.

For example in GBP/USD 1.6552 is the usual way it is quoted and adding 5 pips

would be adding 0.0005 giving is 1.6557.

I’m going to show exactly how you would place the trade in a later section.


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Risk Management (This is very important,please do not skip this)When you place a buy order as illustrated on page 18 you would place an ‘If Done’Stop loss 30 pips below buy trade order.

This means you would set a maximum risk for the trade. If the trade was filled at

1.6557, then turned around and went down you would minimise your potential loss to 30

pips.

In the example on page 18 a Stop loss would be set at 1.6527 or 16527.0 at

IG Index.

You know the risk of the trade and can calculate your % of trading account that is

risked on every trade.

For Net Trap, I recommend never risking more than 2% of your tradingaccount on any one trade.

For a £3,000 trading account, a trade of £2 a pip would represent 2% of the account.

£2 per pip x 30 = £60 risk per trade. £60/3,000 = 2%.

If you have £1,500 trading account 2% would mean you should trade with £1 a pip.

The risk per trade would be £30.

For a £300 trading account you should trade for 20p a pip, giving a risk per trade

of £6.

This is very important and means you can be confident in your trading knowing you

are conservatively managing your trading risk.

You also know you will still be around trading this time next year.

With Net Trap I always use a 30 pip Stop Loss and a 50 pips Profit Target Limit.

Exit Strategy

When you place the Buy order you set an ‘if done’ order to automatically close the

position if the profit target of +50 pips higher than the buy price is hit. This is called a

Limit Order.

I will show you exactly how to do this later.

In the example on page 18 the Limit order would be placed at 1.6607 or 16607.0 at IG

Index which is 50 pips above the buy entry price of 1.6507.


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C). Check back at 8:30 am.

If the profit target (Limit Profit Order) or Stop Loss has not been hit, you manually

close the whole position at 8:30 am at the market price.

This is done by selling the GBP/USD position at the market price at 8:30 am. You do

this by logging into your spread betting account and placing the live trade.

If the buy trade has not been triggered, and was not done cancel the order at 8:30 am.

In the above example, at 8:30 am the market had risen to 16595.6, as shown below.

You would close the position by selling GBP/USD at 16595.6 which was 38 pips profit

in the above example.

I’m going to show you lots more real trade examples to make sure you get this.

Sell Signal

A). 40 MA is falling.

40 MA must be falling by at least 1 pip during the last 10 bars and with no more than

2 consecutive candles where 40 MA is rising. Ignore candles where 40 MA is flat. See

example charts. If there is no clear direction, don’t place an order.

B). If A) is satisfied, consider placing an order to Sell at the Low of the 6:15 candle

less 2 pips.


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Why 2 pips and not 5 pips like the buy order?

Because you need to add the 3 pips spread to the buy order, but not to the sell order.

Risk Management

Place ‘If Done’ Stop loss 30 pips above the Sell price.

Exit Strategy

Place ‘If done’ order to Buy at 50 pips below the Selling price

The position will then be closed automatically if the trade is triggered and the profit

target of +50 pips is hit.

C). Check back at 8:30 am and if the profit target or stop loss have not been hit, close

the whole position at 8:30 am at the market price.

If Sell trade is not triggered, cancel the order at 8:30 am.

No Trade Rules

Some days the 40 MA may be flat at the close of the 6:15 am candle and may be

indecisive for the preceding 10 candles, some going up, some going down, some flat.

If it is not visibly trending down, or up, then stand aside and do not place an order.

This keeps you out of non trending, more risky markets.

If in doubt, stay out and don’t place an order.

Many days it is very clear with the 40 MA clearly rising or falling, but some days it is

not.

On these days you should check each bar by placing the cursor over each candle stick

and checking the last 10 candle sticks and to see if it is going up or down.

If there were more than 2 candles in the opposite direction then you would stand aside

and not place an order, and wait for the next day.

Do not guess and place a trade anyway, the key to successful trading is protecting your

trading account from losses.

Remain disciplined and check again next day. There will be lots of opportunities; this is

where patience is required, just like when fishing.

I’m going through trading examples next so you can see how easy this is to do.


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Notes


Trade Signal Examples

Trade Example 1

Open your GBP/USD 15 minute chart at around 6:25 am before the close of the 6:15-

6:30 am candle.

Check the direction of the 40 bar MA (Moving Average).

In the above example the pink line is just going up for the period of the last 10

candles.

Make sure it has not turned down for more than 2 candle sticks in the last 10,

ignoring any flat bars.


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You can read the value of the 40 MA by moving the cursor over each candle and

comparing candles.

In the above example MA40 is rising, even though for the last two candles it is flat (we

ignore candles where 40 MA is flat).

At 6:30 am, consider placing a buy order to buy GBP/USD at the high of 6:15-6:30

candle plus 2 pips plus the spread (0.0002 + 0.0003 = 0.0005).

In this example a buy order at 1.6383 (1.6378 + 0.0005 = 1.6383) would be placed

with a stop loss of 30 pips and a profit target of 50 pips.

For a buy order the stop loss is 30 pips below (-0.0030) the entry price so it would be

1.6353. The profit target would be 50 pips (0.0050) above at 1.6433. Confirm the order

and leave the computer.

On IG Index this would be a buy order at 16383.0 with a stop loss of 16353.0 and

profit limit order of 16433.0


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Check back at 8:30 am and if the profit target or stop loss have not been hit close the

trade at the market level by selling the position.

In the above example neither the stop loss nor the profit target had been hit so the

trade was closed manually at the close of the 8:15-8:30 candle at 1.6395 for +12 pips

profit.

Trade Example 2

In the above example the 40 MA (pink line) is clearly falling.

The 6:15-6:30 am candle is at the bottom right corner of the chart and is just closing.

You are looking to place a Sell order.

Place the cursor over the 6:15-6:30 am candle and the box as shown above will appear.


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The lowest point of the 6:15 candle was 1.6418.

This means you place a sell order at 1.6416.

For sell orders you deduct 2 pips from the low (1.6418 – 0.0002 = 1.6416) to get your

entry price.

Why is this different to the buy trade? It is because trading charts are bid charts. You

can sell at this level but if you want to buy, the spread betting provider will add their

spread.

It’s a basically their commission for doing the trade. They normally add 3 pips for

GBP/USD.

This is why when you sell you only have to deduct 2 pips and when you buy you have

to add 5 pips.

Your stop loss of 30 pips would be at 1.6446 and a profit target of 50 pips is 1.6366.

You would have placed the order on your spread betting platform and walked away.


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When you checked back 2 hours later you would have been pleased to find the trade

hit the profit target for +50 pips profit, after hitting the target automatically just after 8

am.

Trade Example 3

At close of 6:15-6:30 am candle the 40 MA is just going down.

At 6:30 am you would consider placing an order to sell at the low less 2 pips which

would be 1.6540 with an ‘If done’ stop loss of 30 pips at 1.6570 and a profit target of +50

pips at 1.6490.


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You would then walk away and check back at 8:30 am.

The trade was not triggered until 8:18 am when GBP fell and first hit the sell order at

1.6540 and then hit the profit target at 1.6490. It was automatically closed out at 8:30 am

for +50 pips profit.

The chart below shows the numbers more clearly.

The above chart shows the 8:30 candle hit a low of 1.6486.


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When the Market is Moving QuicklySometimes the market is moving quickly at 6:30 am and the 6:15-6:30 am candlestick closes at its highest point or its lowest point.

In other words the market is heading quickly in the direction of the 40 MA.

When this happens if you are very quick you could buy or sell at the market instead of

placing an order (allowing for the +5 pips or -2 pips for the correct entry point).

However, if the market has already moved 10 pips in the direction of the 40 MA past

the entry point, don’t chase the market.

If you have time you can wait to see if it moves back to the entry point and then get in

or you could set a Limit order at the desired entry point.

A Limit Order is placing a trade order to buy that is below the current market price.

This means you could still set the 30 pips stop loss and 50 pip profit target, and if the

market falls back to the entry point, the trade would be triggered.

This is the best way to do this as it means you could place the Limit Order and then

leave the computer and come back two hours later.

Sometimes it won’t have been done and you may have missed the move, but this is the

safer way to trade.

In trading you always have to manage your risk as first priority.


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Notes


A Note of CautionWhilst all of these examples are real, not every trade signal produces a winningtrade, and as with any trading strategy, you will have losing trades.

What makes this strategy so powerful is your potential losses are always known and

managed.

This gives you an excellent opportunity to trade successfully as an independent trader

in the long run.

This strategy keeps you out of non trending markets. It also has an additional safety

valve, so if the market turns just after you place your order and the trend does not

continue, your trade will sometimes not be triggered. Potential losses are reduced.

Because you simply place your order and go and do something else, this strategy

reduces the emotion of trading. The worst thing is sitting watching a trade, as you are

tempted to take small profits, before hitting the profit target.

As with all things worthwhile, it will need some practice and I suggest you use a demo

account or trade very small sizes until you are comfortable, with trading this strategy.

You should also follow the method and not change it. This strategy has a fixed stop

loss and profit target for specific reasons and for the GBP/USD pair only.

This is based on hundreds of hours of research and trading experience.

Don’t get greedy and always trade according to the risk management rules of never

risking more than 2% of your trading account on any one trade.

The key to being a successful fisherman is taking a consistent catch, to provide a

reasonable daily diet. Used wisely you can learn to trade to provide a consistent additional

income for life – now that is definitely worth the initial effort.


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Notes


Placing a Trade at IG IndexI will show you how you would place a trade using IG Index.

Go to www.ntsystem.co.uk if you need to open an account.

Sign In using your Username and Password.

Open Spot FX GBP/USD chart by clicking on the chart icon to the right of where it

says Spot FX GBP/USD.


33


The chart will open up and you need to set up by adding the 40 bar Moving Average,

as previously explained.


34


The 40 MA is clearly going down. You check the low of the 6:15-6:30 candle for the

entry price for a sell trade set up.

Hover the cursor on the 6:15 candle body and read the Lowest. It is 15833.0. IG Index

quote forex rates as whole numbers (instead of 1.5833 at other providers)

An order to Sell GBP/USD at 15831.0 could have been placed. Two pips lower than

the lowest level. (With IG index a pip is not 0.0001 but is simply added or subtracted

to/from the whole number).


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Open the Ticket screens by pressing the down arrow button to the right of the chart

button, the above drop down menu with appear.


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Select Order to Open and the above ticket will appear.

Complete the ticket as shown. In this example, you would click Direction as Sell.

Order level is 15831.0. Type is Stop. Amount is determined by your risk management

rule on never risking more than 2% of your trading account.

In this example, I am assuming a trading account of £1,500, so am risking £1 a pip

which is £30 risk (2% of £1,500).

Under Contingent Orders put in a Stop of 30 and Limit (Profit) of 50. IG Index

calculates the levels of these orders for you. Press Submit.


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The screen above should appear. Check the Order and Close the Button. If you need

to change anything, you can go back to the drop down ticket menu and Edit the Order

and Submit again.

You can see the Order by Clicking the Orders to Open button at the top of the screen

the fifth button from left to right. I’ve circled it for you below in blue.

You will see the order at the bottom of the screen under Working Orders. Circled for

you in black.

You now go and do something else for 2 hours.


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Returning at 8:30 am you can see the market did go down and the order was filled.

It went down to around 30 pips in profit, then retraced and went back up and through

the stop loss.

This trade was closed automatically just after 8am hitting the Stop for a 30 pip loss.

Not all trades are winners and that is why we have good risk management rules only

risking 2% of the trading account and having a stop loss of 30.

We are managing our risk and in the long run have very good potential to profit.

Trading like this puts you in a strong position, and you could use this system to your

advantage for years to come.

And of course I’ll be going through weekly trades with you in my Monday updates.

Keep an eye out for them. Providing you don’t cancel look out for emails from

[email protected]


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Notes


Placing a Trade at the Market.Sometimes if the market is moving quickly you may have to place a live trade atthe market. This is because it will not be possible to place an order as the marketprice is too close to the trade entry point.

You will also have to close a trade at the market to close an open trade at 8:30 am if it

has not hit the profit target or the stop loss.

To place a live trade at the market, first log into your Spread betting account.

Go to Spot FX GBP/USD and click the downward arrow tab to open the Deal Ticket

window.

Highlight the Deal Ticket on the drop down menu as shown above (normally when


41


placing an order you would open Order to Open – this time select Deal Ticket).

The above screen appears and you input your stake in Amount and the Stop and Limit

orders.

In this case I have inputted £1 a pip and the stop loss of 30 and profit target of 50.

You then wait for the market to reach the desired entry point and hit the Buy or Sell

button and your trade will be done.


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To Close an Open Trade at 8:30 amTo close an open trade at the market, you select your open trade which is shown inthe Open Positions box at the bottom section of the main screen.

Select the downward arrow tab and the following box appears.

Select Close position as shown.


43


Hit the highlighted button in this case the Buy button.

You then get a confirmation box that the trade has been closed.

Please note this example was just an example of how to do this on IG Index and not

an actual Net Trap trade.


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Placing a Trade at ODL MarketsTo open an account at ODL Markets go to:

www.odl-fsp.co.uk

Log in and the following screen opens:

To open the chart click the GBP v USD Rolling Spot chart icon to the right of the

GBP v USD row. Set the chart up as explained earlier.

To do a trade click Deal for a trade at the market, or more commonly with the Net

Trap System you will use Order to input the entry, stop loss and profit target.

Click Order and the following screen appears:

Input the order entry point and stop and profit targets.


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On the previous page I entered a buy order to buy at 16560.0. You have to calculate

the stop levels and profit target limit and input the actual prices like in the example on

page 45.

You also have to tick the box for order type which in this case is a Stop order. You

then click Place Order and the following confirmation will appear.

You should then see your order under Active Orders at the bottom of the screen as

shown below.


46


A Month of Examples

Net Trap Results Table – August 2009

Date Trade Profit/Loss

3/08/09 Buy at 1.6731 -30

4/08/09 Buy at 1.6948 +50

5/08/09 No trade 0

6/08/09 Sell at 1.6988 -12

7/08/09 Sell at 1.6769 +22

Total for week +30 pips

10/8/09 No trade 0

11/08/09 Buy at 1.6486 -11

12/08/09 No trade 0

13/08/09 Buy at 1.6526 +50

14/08/09 Sell at 1.6537 +50


17/08/09 Sell at 1.6446 +50

18/08/09 Buy at 1.6359 +50

19/08/09 Sell at 1.6526 +50

20/08/09 No trade 0

21/08/09 No trade 0


24/08/09 No trade 0

25/08/09 No trade 0

26/08/09 Sell at 1.6314 -20

27/08/09 Sell at 1.6217 +8

28/08/09 No trade 0

Total for week -12 pips

31/08/09 No trade. Bank Hol 0

Total for month a net +257 pips


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Net Trap – August Charts

3/08/09

Buy at 1.6731 stopped out at 1.6701 (lowest 1.6794) for – 30 pips

04/08/09

Buy at 1.6948 reached 1.7003 and hit the +50 pips profit target.


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05/08/09

40 MA flat no clear direction, no trade, 0 pips

06/08/09

Sell at 1.6988 (high 1.7012, did not hit stop) closed at 8:30 am at 1.7000 for

-12 pips


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07/08/09

Sold at 1.6769 closed at 1.6747 8:30 am for +22 pips

10/08/09

Buy at 1.6721, not triggered, no trade 0 pips.


50


11/08/09

Buy at 1.6486, closed at 8:30 am at 1.6475 for -11 pips loss.

12/08/09

40 MA flat and indecisive at 6:30 am, no order placed and no trade – 0 pips.


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13/08/08

40 MA rising so buy order placed at 1.6526. Hit profit target for +50 pips.

14/08/09

Sell order at 1.6537. During 8:15 candle dropped triggered trade and hit the profit

target for +50 pips at 8:30 am.


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17/08/09

Sell at 1.6446, hit profit target for +50 pips profit.

18/08/09

Buy at 1.6359, hit profit target for +50 pips profit.


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19/08/09

Sell at 1.6526, hit profit target for +50 pips profit.

20/08/09

Order to sell at 1.6519. Not triggered, no trade 0 pips.


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21/08/09

Order to sell at 1.6415, not triggered no trade, 0 pips.

24/08/09

Order to buy at 1.6527, not triggered, no trade, 0 pips.


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25/08/09

Order to buy at 1.6425, not triggered, no trade 0 pips.

26/08/09

Order to sell at 1.6314. Triggered at 8 am then closed at 8:30 am for -20 pips.


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27/08/09

Order to sell at 1.6217, triggered almost stopped out but closed at 8:30 am 1.6209 for

+8 pips profit.

28/08/09

40 MA indecisive, no trade order, no trade, 0 pips.

31/08/09

Bank Holiday, no trade.


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Notes


Questions and Answers1. How do you read the 40 MA when it is quoted to 5 decimal points?

Some spread betting companies quote prices to 5 decimal places. For example 1.64563.

In this situation, when checking the 40 MA, I would round the fifth decimal place to

the nearest whole number.

For example 1.64563 would be 1.6456.

1.63288 would be 1.6329

For the MA to be qualify as going up it should be going up by at least one whole pip.

If 40 MA is not going up by at least one whole pip over previous 10 candle sticks, don’t

place a trade.

The same principle applies when the 40 MA is going down for the sell trade.

2. Why do you add 5 pips to the high of the 6:15-6:30 am candle stick to a buy trade?

This is because we want to make sure the market goes higher than the previous high by

2 pips to trigger the trade.

On a buy trade you have to also add the spread which is effectively the spread betting

companies commission.

Charts show the bid prices and for the ask prices you have to add the spread.

The spread for GBP/USD is usually around 3 pips.

This means we add 2 pips plus the spread of 3 pips, meaning a total of 5 pips would to

be added to the buy trade.

If your spread is more than 3 pips or less then you need to adjust the pips you would

add. For example if your spread is 2 pips you should only add 4 pips. If it is 4 pips you

would add 6 pips to the buy trade.

3. Why do we take off 2 pips from the lowest point of the 6:15 to 6:30 am candle stick?

This is because we want the market to turn down lower, lower than the previous bar

low to trigger the sell trade.

Since charts are the bid price, we do not need to deduct or add any other spread, so we


59


only deduct the 2 pips.

This should be the same for whatever spread betting provider you use.

4. Do the daylight saving time changes (the clocks changing by one hour in Springand Autumn) affect the Net Trap System?

There is a one week difference in the days that the time changes take place in the UK

and the US.

This can mean the week in between can be more erratic for the system and it is

probably best not to trade until the clocks are both adjusted.

Also note some forex charts show time in Greenwich Mean Time. This means during

British Summer Time, the times on the charts can be one hour earlier than actually in the

UK.

5. Should I trade the Net Trap System every day?

I find it is better to check the charts every day and check for the trade signal as

normal. I don’t take any notice of possible news announcements, FED rates decisions,

Bank of England Committee meetings etc.

I have found most news releases happen later in the day and beforehand the market

can still offer some great trades.

6. Should I stake the same amount every day?

I recommend staying within the 2% risk management staking size is best. This means

as your trading account grows; you could increase your stake (remaining within the 2%).

I would not recommend staking more than 2% too early as you run the risk of

damaging your account prematurely.

One of the secrets of successful trading is not getting greedy and being content with

consistent small gains over time.

6. Who do I contact if I have questions?

I’ve designed this system and manual to cover all bases but if you have any other

technical questions please email me directly at [email protected]

Please remember that I’ll also be going through new FAQs each week in my weekly

updates.


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A Final WordCongratulations you now have completed the guide to the Forex Net Trap System.

Put it to good use and use it wisely.

Successful independent traders put into practice what they learn and remain focused

and disciplined.

My advice is to take things slowly, and really learn how to do this before risking real

money.

It is far better to practice using a demo account or with very low stakes before you are

comfortable with this.

This system is relatively simple, so you should get this quickly with a bit of effort.

Trading forex like this with discipline and risk management means you have an

excellent opportunity to profit in the long run.

I look forward to hearing your success stories.

Best Wishes,

Richard HillForex Net Trap System

P.S. Don’t forget... if you haven’t already signed up to receive my free, twice weeklyForex Round-Up e-letters, make sure you do today.

To sign up, for free, you just need to visit www.forexroundup.net and pop in

your details.

© Copyright 2009 Agora Lifestyles Limited. All rights reserved. No part of this report may

be reproduced by any means of for any reason without the consent of the publisher


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