FOREX INVASION SYSTEM

Table of Contents

- Introduction ………………………………… Page 2

- About The System ………………………… Page 5

- Setup and rules ……………………………. Page 11

- Day Trading Strategy ……………………. Page 14

- Swing/weekly Strategy …………………. Page 16

- Re-entering the market ………………… Page 20

- Secret Weapons ………………………….. Page 22

- Trading Examples …………………………. Page 24

- Conclusion …………………………………… Page 38

All rights reserved. Except for brief quotations in a review of this publication, no part of
this publication may be reproduced, stored in a retrieval system, or transmitted in any
form or by any means - including electronic, mechanical, photocopy, recording, scanning
or otherwise - without the prior written permission of the author.
Introduction

Dear Forex friend, congratulations and welcome!

It’s my pleasure to introduce to you in this ebook.“Forex

Invasion”, a powerful trading system that I have been using
for many years with amazing results. I hope that you find it
useful and profitable.

I tried in this ebook to give you all information you need to

be a successful trader. This information are collected in
years, through failure and success, smiles and tears. All
written in as simple and clear language as possible.

For me, becoming a Forex trader was the most exciting

experience, and I feel very happy when I see that many
people around the world are interested in Forex trading.

It’s a great business and could guarantee your financial

freedom, if you know exactly what you are doing. And like
any other business, it could be a financial disaster if you
entered the market with nothing but hopes, dreams and
illusions.

Here are my “3 Golden rules of trading” to think about and

follow “religiously” in your trading career.

RULE 1 - “Follow the system”

I will make this one point very clear, because I strongly

believe it’s the most important rule to remember: In order to
be a successful trader, you must be willing to take your
profits at the right time and never look back.
The same mistake I see new traders make over and over
again is following a trend or position too long. Believing that
this is the trade where they can get 100+ pips and just forget
about what their system is telling them to do!

The reason trading systems are created is to help you limit

your losses AND profits. By limiting the amount of money
you are going to profit/lose, you will be a long-term winner
by keeping control of your trades.

RULE 2 – “Don’t trade with money you can’t afford to lose”

Never risk more than %2-%3 (%5-MAX) of your total

account in any trade.

If you are investing $50,000 in trading, then never risk more

than %2-%3 of your account in one trade or about $1,500 per
trade in this case.

Stick to your system with money management, and you will

be just fine.

RULE 3- “Enjoy your life!”

You are the master, not the slave. Trading forex can be very
exciting and profitable. But you should not forget, not even
for a second, that you have a life and you have all the right in
the world to enjoy it.

Forex trading can give you financial freedom, but it could

take away everything else!

I’ve seen it happening, and believe me, you don’t want that to
happen to you. I know very successful traders who had to
quit trading to save their lives. You don’t have to.
Go out, socialize with people, and don’t forget your friends
and family or your loved ones.

Never work on weekends, forget all about trading whenever

you close the charts. Take a vacation from time to time.

Be organized. Trading forex is a business, not a life.

There is time for trading, and time to live and have fun.

Listen to what people are saying, sometimes we don’t notice

what we are doing. Listen and think.

You are the boss.

Ok, now we are ready to begin our trading journey together.

Hope that you enjoy it and wish you all the best.

To open a live trading account and claim up to $1000 worth

of trading bonuses head to…

http://www.lbsfx.com/tradebonus

To your success,

Steven Lee Jones

About The System

“Forex Invasion” system is designed to take advantage of the

nature of the forex market itself. we know that price moves
in trends (up/down/side ways) and it also moves in waves
(top/bottom – support/resistance).

we are not going to blindly follow the current trend. We are

going to use indicators and special technical analysis
techniques and methods to predict the future move or the
future trend, then and only then, we are going to follow that
trend. For this job, we are going to use the RSI indicator.

Next,we are going to take our trades (buy/sell orders) at the

best time/place possible, according to the waves of price. in
other words, we are going to sell high and buy low to get
maximum profits. and for this job, we are going to use the
bollinger bands indicator.

At the same time, we are going to cut our loses short and let
our profits run. Meaning, our stoploss levels will be as close
as possible to the entry level.

The system is based on a technical analysis method called

trading the divergence/convergence. And it’s very important
before we go on with system rules to make sure that you
understand it.

Divergence happens when the market is making a higher

high (up trend) and the indicator is making a lower low
(down trend).

Convergence occurs when the market is making a lower low

(down trend) while the indicator is making a higher high (up
trend).
Both the Divergence and Convergence indicates that the
current trend is running out of steam and it’s time for a
trend-reversal.

We are going to use the RSI indicator with this system, and
here are examples of both signals:
You may want to take sometime reading about
Divergence/Convergence with more details. It’s a very
common setup and you will have no problem finding free
resources on the internet (ask mr.Google!).
Next, you should invest sometime with the charts and try to
spot the setup in as much pairs as possible with the RSI
indicator.

Now it’s time for Bollinger Bands!

Bollinger bands (BB) are an indication of the volatility of
recent prices. If the recent prices have a larger range than the
previous prices, the Bollinger bands will expand. If the recent
prices have a smaller range than the previous prices, the
Bollinger bands will contract.

Bollinger bands are used in many different ways by different

traders. Some traders make trades when the price moves
above or below the Bollinger bands (i.e. when the price
breaks out of the Bollinger bands channel). Some traders
make trades near the moving average, and use the Bollinger
bands as targets.

We are going to use Bollinger Bands to spot the

overbought/oversold levels

.
Delete the RSI indicator from your chart and attach the BB
indicator to it. Try to spot the overbought/oversold levels of
as many pairs as you can. Take your time.

When you are finished with both indicators, then you are
ready to the next level.

Congratulations!
System Setup and Rules

Open new chart – any trading platform, like metatrader - for

any currency pair. Any time frame will do, but it’s
recommended to use 15 minutes or above. and start with
major pairs only.

Add the RSI indicator, parameters:

Period = 14
Apply to = close
Levels = 40 - 60
Color = (any color you like)

Then, Add the Bollinger Bands indicator, parameters:

Period = 20
Shift = 0
Deviations = 2
Apply to = close
Color = (any color you like)

Your charts should look like this:

Rules for Buy Signal:

Price should hit Bollinger band’s oversold level in two places,

one following the other. (Double bottom).

The double bottom should create a convergence in the RSI

indicator. If it didn’t, then it’s not a valid signal. Ignore it.
Rules for Sell Signal:

Price should hit Bollinger Band’s overbought level in two

places, one following the other. (Double top).

The double top should create a divergence in the RSI

indicator. If it didn’t, then it’s not a valid signal. Ignore it.
We are going to use this system for day trading and swing
(weekly) trading.

Day Trading Strategy:

Enter the market right after a buy/sell signal. Your target is

the opposite level of the Bollinger band or the opposite level
of the RSI. The first one to hit, is your exist signal.

Example: you got a buy signal. Enter the market and open a
buy order. exit when: 1 – the price hit the upper level of the
Bollinger band, or 2 – the RSI indicator reach the 40 line.
Example: you got a sell signal. Enter the market and open a
sell order. Exit when: 1 – the price hit the lower level of the
Bollinger bands, or 2 – the RSI indictor reaches the 60 line.
Swing/Weekly Trading Strategy:

Enter the market right after a buy/sell signal. Your target is

an opposite signal. if you opened a buy order, then you
should close it when you get a sell signal. And if opened a sell
order, then you should close it when you get a buy signal.

Of course, there is no guarantee that the opposite signal will

happen in days from your current signal. But each signal
usually last for days and some times for weeks!
Stoploss level:

The stoploss level is the same for both day trading and swing
trading strategies.
The stoploss for a Buy signal is the lowest bottom level + 30
pips.
The stoploss for a Sell signal is the highest top level + 30
pips.
Re-entering the market:

As I said before, sometimes the signal will last for weeks.

If you are a swing trader, this should not be a problem.. But
for day traders, you will need to re-enter the market again in
the next day or the day after.

So, we need a good entry points and stoploss levels:

If the current trend is down, you can enter sell at any

overbought level of the Bollinger bands indicator. Your
stoploss should be the last support level. The same for up
trends, but your stoploss in this case should be the last
resistance level.
If the trend is too strong and price couldn’t even reach the
overbought level, you can also enter at the middle line level.

When you re-enter the market, make sure that the RSI
indicator is on your side. At or above 60 if the trend is up.
and at or below 40 if the trend is down.
Secret Weapons

When to exit the trade, is way more important than when to

enter the trade. Many trading systems fail at this stage and
leave the trader in the middle of nowhere.

Fortunately, “Forex Invasion” will give you even better than

just an exit rule. We are going to use two of the most
powerful trading tools to give us the best entry/exit points.

The first weapon we are going to use is the Fibonacci levels.

You will find fibo levels in all platforms, and if you have no
idea what Fibonacci levels are, you can ask mr.Google and
you will know all there is to know about it.

Why we are going to use fibo levels and how ?

We are going to use fibo levels to know the best target levels
for our trades.

1- First, we are going to determine the active wave. The

active wave is the one caused the divergence or the
convergence.
 2- Next,if the trend is reversing up, we are going to use the
high and low of the active wave to draw the fibo tool,
here is a screenshot example:

0 fibo level attached to the low of the active wave – 100 fibo
level attached to the high of the active wave.
3- If the trend is reversing down, we are going to use the
Low and high of the active wave to draw the fibo tool. 0
fibo level attached to the high and the 100 fibo level
attached to the low, here is a screenshot example:
Our second weapon is a technical analysis pattern called the
inside bar or the IB.

Whenever you see an inside bar, that means the move is

running out of steam and it’s a very good time for a reversal.

How we are going to use the IB?

The IB could be used as an entry/exist point at
overbought/oversold levels of the Bollinger bands indicator.
Here is an example of how the IB could be used with our
system:
You can use the IB as your main entry point or as a
confirmation to any signal.
You can also use the IB when you re-enter the market from
an overbought/over sold levels or/and from middle line level
of the Bollinger bands indicator.

For best results with the IB pattern, use 30 minutes time

frame or above.
Trading Examples

GBP/USD – 1H Chart – Oct 2008

Based on the above information, we enter the market and

open a sell order @ 1.7527. Our stoploss was the high of the
active wave 1.7653 + 30 pips = 1.7683.
Based on Fibo levels, our first target was 1.7427
Second target 1.7286 – 3rd target 1.7054

First Target = 100 pips – 3 pips spread = 97 pips profit

Second Target = 241 pips – 3 = 238 pips profit
Third Target = 473 pips – 3 = 470 pips profit
GBP/USD – 1H chart – Sep 2008

Based on the information above, we enter the market and

open a Buy order @ 1.7543. We set our stoploss based on the
lowest level of the active wave @ 1.7468 – 30 pips = 1.7438
Based on fibo levels, our first target was 1.7974
Target 2 = 1.8285 (reversal signal before target 3)

Target 1 = 431 pips – 3 pips spread = 428 pips profit

Target 2 = 742 pips – 3 pips spread = 739 pips profit
Our third secret weapon is leverage and compounding on
your profits. With the help of leverage you can buy much
more currency than what your actual account size allows you
on a 1 to 1 basis. When you use leverage, your broker allows
you to increase your purchasing power by as much as
4,000%!

As an example, for every USD $1 in your account many

brokers will allow you to purchase USD $ 400. This is very
powerful and can be very profitable. However, you must have
an excellent money management strategy to manage this
leverage issue so you can take advantage of its maximum
potential but at the same time manage your money for
minimum risk exposure.

So, leverage simply allows you have a much greater

purchasing power and increase your profits per trade
accordingly. Compounding allows you to formulate a
strategy with the objective of building wealth from your
profits. So, instead of taking money out of the account every
time profit accumulates, those profits are used for future
trades.

Let's look at an example of how leverage and compounding

can dramatically grow a small account size over time:

The following is a projection of three scenarios over a three

year period each.

The first starting with a USD $3000 account, the second

starting with a USD $7,000 account and the third starting
with a USD $15,000 account. All three calculations are based
on a 2% weekly net increase in account size. No profits are
taken out of the account; they are re-invested in next week’s
trades.

So, in other words, we will see how these three accounts

would grow over a periods of three years based on the above
criteria.

Example:

Starting Account Size – USD $3,000

Weekly increase in account size: 2%.

Account growth after 1 year: $ 8,401
Account growth after 2 years: $ 23,526
Account growth after 3 years: $ 65,879

Example:

Starting Account Size – USD $7,000

Weekly increase in account size: 2%.

Account growth after 1 year: $ 19,602
Account growth after 2 years: $ 54,893
Account growth after 3 years: $ 153,718

Example:
Starting Account Size – USD $15,000
Weekly increase in account size: 2%.
Account growth after 1 year: $ 42,005
Account growth after 2 years: $ 117,628
Account growth after 3 years: $ 329,396

Can you now see the power of compounding over time?

Again, this is one of the greatest tools a trader has for

building wealth. An account of USD $3,000 could grow to $
65,879 in three years using correct money management rules
and “Forex Invasion” system. Same goes for an account of $
7,000 (to $153,718) and an account of $ 15,000 (to $
329,396) and you could be amongst the 5% of traders who
live the dream of creating true exponential wealth in the
Forex market.
From the examples above, we can form a check list that you
must follow before you enter any trade.

Divergence or Convergence?

Both tops or bottoms at or crossed the overbought/oversold

level of the Bollinger bands?

If all answers to the above questions are (yes) then you have
good trade or a valid signal.

Questions you must ask before you re-enter the market:

What is the current trend/last signal?

Is the price at overbought/oversold level?

If the trend is too strong, did the price hit the middle line of
the Bollinger bands?

Confirmations:

Is there an IB signal?
Is the RSI above 60 or below 40 ?

IB pattern is a very good entry point. but if you didn’t see an

IB you still have a valid signal and you can enter the market.

After the divergence/convergence signal, When the RSI is

above 60 = strong up trend, RSI below 40 = strong down
trend.

Both IB and RSI are strong confirmations that you can use
before you enter the market.
Conclusion

“Forex Invasion” is a very powerful system. However, it’s not

the holy grail! You will have bad trades and there is nothing
you can do about it. Without losing there is no winning. So,
have faith in what you know and start by demo trading this
system for no less than a month. Avoid small time frames,
like 1 minutes/5 minutes. And stick to the major pairs at
first, like EUR/USD – GBP/USD – USD/CHF – USD/JPY –
AUD/USD

Don’t add anything or change anything!

The system was designed to be simple, being powerful got

nothing to do with being complicated. In fact, the opposite is
the truth!

I hope that you will enjoy trading the “Forex Invasion”

system and I’m sure that you will find it helpful and
profitable.

If you need any help or have any questions please head to…

http://www.forextradingmanuals.com/support

To open a live trading account and claim up to $1000 worth

of trading bonuses head to…

http://www.lbsfx.com/tradebonus

Steven Lee Jones

Forex Trading Manuals