FCPBonus Forex Secret Protocol is a forex trading strategy that is based on the Elliott wave theory. Elliott wave theory is a very advanced form of technical analysis but in this strategy it is applied in a very easy way. Elliott wave theory is really advanced if you want to study all the details of the every wave. Fortunately, we will not study the details of every wave while trading with FCPBonus Forex Secret Protocol. Elliott wave generally consists of Impulsive wave and corrective wave. Impulsive wave moves in the direction of the major trend while the corrective wave moves against the trend. Here we don’t focus on corrective waves. Impulsive waves consist of further five sub waves. Among them 1st, 3rd and 5th wave move in the direction of the major trend while wave 2nd and 4th move in the anti trend direction. Although there are many rules regarding the Elliott waves. Only very few of rules will be used here. Some of the important rules to know before using this system are:
- Wave 2 never retraces wave 1 by more than 100%. In another words, wave 2 will never move beyond the starting of wave 1.
- Generally wave 2 retraces 23.6%-88.6% of wave 1.
- Generally wave 3 extends to 161.8% of the wave 1.
A normal impulsive wave of an Elliott wave should look like this.
The main idea of this system is to ride the wave three whether it is an uptrend or downtrend.
We will be using two time frames; daily and hourly. We will start to count the wave 1 on daily chart and set our long term target on the daily chart at the level where the wave 3 is expected to end. We will trade on the direction of the wave 3 on an hourly chart.
Buying Setups Using FCPBonus Forex Secret Protocol.
Look for the up trending market on the daily chart and figure out the lowest point on your chart. When the price trends higher and pullbacks downward and again rallies without breaking the low of wave I then probably that pullback is a wave II. Now the new wave rallying higher is a wave III. When the wave III trends higher and breaks above the end of the wave I, understand that your time has come to pull the trigger. When wave I and II are formed completely you should have some clue of where the wave three should end. Wave III will usually end around the 161.8% (around 1.2000 in the above chart) of wave I. keeping these things in mind now shift your time frame to hourly forbuying for a short period of time.
On an hourly chart see when the prices are oversold using stochastic indicator and awesome indicator. And keep buying at swing lows until the wave III ends. Set your stop loss just below the recent swing low and take profits as soon as the stochastic is overbought.
The condition for selling is same as of buying except that the wave three will be trending downwards.
Short Trades Setups.
Set your long term target on daily chart and shift to hourly chart.
Now look where the price is overbought and as soon as you see price is overbought, sell the pair. Set the stop loss just above the recent swing high and take profits as soon as the stochastic dives in to oversold zone.
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