Forex Sailing – RULES for Online Forex Trading

Over the past week, I’ve been reviewing concepts for forex trading online that I call “Forex Sailing.” Today, I’m going to give you the EXACT RULES to follow to start looking for trading opportunities & go Forex Sailing!
For these rules, I’ll be referencing two pictures that I published in previous blog posts (make sure you read them to understand what I’m talking about).
In the post “Online Forex Trading Waves for Forex Sailing,” I introduced the concept of a single Fibonacci wave. Uptrending waves are called “forex candy-canes” and downtrending waves are called “forex umbrella-handles.”  Specifically, this picture is important:

A fibonacci wave with a 61.8% retracement is a common price swing in online forex trading & forms the basis for Forex Sailing.

In the picture above, you’ll notice that there’s a price movement up to a 100% level (from the low to the high of the price swing) and then the price retraces to 61.8% of that high. If the price moved up 100 pips from 0% to 100%, you will want to look for a retracement to a level thats 62 pips above the 0% (low) level.

Different Fibonacci Retracement Levels?

In the picture above I mention a specific 61.8% retracement level. Many people have asked me:
“Aren’t there different possible retracement levels?”
YES!!! There are different Fibonacci levels, but….
The rules below allow you to deal with those levels automatically. Although you’ll be looking at a 61.8% retracement to enter the trade, you’ll be looking at wave patterns to exit. Even if the numbers are different, you’ll still exit the trade properly Simply follow the rules and you’ll see how they adjust themselves to the trading circumstances dynamically.

Fibonacci Wave Zones & Forex Trading Online

In another post called “Fibonacci Wave Zones for Online Forex Trading,”  I introduced a picture that you can use to guide your online forex trading decisions:
If you haven’t MEMORIZED this picture yet, you should do so now!
Seriously, MEMORIZE IT NOW!!!
As you can see, there are two forex trading opportunities revealed in the image above. There’s a trade from III-IV, and a trade from V-VI. The rules for trading these waves are very similar, but slightly different, so I’ll cover the RULES separately below.

Rules for Trading the 2nd Forex Fibonacci Wave Online

When you arrive at point III on the picture below, you’re ready to sailing in the forex market.
Step ONE: Looking at the daily charts, determine the direction of the trend:
Once you determine the direction of the daily trend, ONLY look for Forex Sailing opportunities in the SAME direction as the DAILY TREND!
Step TWO: Looking at the 4-hour charts, determine these three prices:
I – the low price of the 1st fibonacci wave
II – the high price of the first fibonacci wave
III – the low price of the retracement of the fibonacci wave (close to current price)
Step THREE – Calculate the Following:
A: Find the DIFFERENCE between II & I – DO SUBTRACTION (II-I). If you get a negative number, just ignore the negative sign (remember the “absolute value” problems from junior high?). We’ll call this number D1 (D for difference).
B: Now we project a price target for IV by adding (or subtracting) D1 to III. For Forex Candy-Canes ADD D1+III to get IV. For Forex Umbrella-Handles SUBTRACT III-D1 to get IV.
Step FOUR – Looking at the 4-hour charts:

1. Wait for the daily trend retracement (from II-III) on the daily charts to reverse. This means that you’re looking for a reversal signal, then a new fibonacci wave pattern to emerge and get to IV on the 4-hour chart. NOTE: this is the 4-hour chart now, NOT THE DAILY CHART!!! This 4-hour wave is breaking the little retracement wave on the daily charts.
2. Once you get to a IV,V,VI or VII on the 4-hour charts in the direction of your trade, enter the trade as a MARKET order.
3. As soon as you enter the trade – Place a STOP order at the price of I (see picture above).
4. Exit the trade for a profit when you hit your projected price of IV (calculated in STEP THREE above).  -OR- exit the trade if a fibonacci wave develops AGAINST YOU (in the opposite direction of your trade) on the 4-hour charts. If a Fibonacci Wave moving in the opposite direction gets to a IV, get out for a profit or a loss – just GET OUT!

Rules for Trading the 3rd Forex Fibonacci Wave Online

The rules for trading the 3rd fibonacci wave (from V-VI) are ALMOST the same. They’re just slightly different…
Here’s the picture again:
Here’s a little fact that I haven’t shared before:
The 2nd wave (from III-IV) is usually the BIGGEST wave in the three wave pattern. The 3rd wave (from V-VI), will be a smaller move. Usually the third wave is the size of the 1st wave (from I-II).
When riding online forex trading opportunities involving the 3rd wave (V-VI), you’ll need this modified set of rules:
STEP ONE – same as above.
STEP TWO – same as above
STEP THREE -
A: Find the DIFFERENCE between II & I – DO SUBTRACTION (II-I). If you get a negative number, just ignore the negative sign (remember the “absolute value” problems from junior high?). We’ll call this number D1 (D for difference).
B: Find the DIFFERENCE between IV & V – DO SUBTRACTION (V-IV). If you get a negative number, just ignore the negative sign (remember the “absolute value” problems from junior high?). We’ll call this number D2 (D for difference).
C: Which is smaller, D1 or D2? Pick the smaller number (hint, this is the shorter price movement from the two waves). We’ll call this number D3.

D: Now we project a price target for IV by adding (or subtracting) D3 to V. For Forex Candy-Canes ADD D3+V to get VI. For Forex Umbrella-Handles SUBTRACT V-D3 to get VI.
NOTE: This is really the same process as before, but since we have had two fibonacci waves happen, we’re picking the smaller price movement as our “safer bet” for sailing this forex trading opportunity.
STEP FOUR – same as above.

Follow these Rules for Online Forex Trading

Now we have the rules for Forex Sailing officially written down. I recommend that you print them out and keep them by your side when you go sailing in your online forex trading.

Tons of Examples Coming Next

It’s great to have the rules, but you won’t fully understand Forex Sailing until you see how the rules are applied to forex trading online. I’ll be posting many examples on the blog (and videos that I’ll have for you soon). Once you see plenty of examples, you’ll see how easy online forex trading is with Forex Sailing!

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