Making A Better Life: The 123 Method of Trading

What is FOREX?

What is traded on the Foreign Exchange?

The simple answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or dealer, and are traded in pairs; for example the Euro dollar and the US dollar (EUR/USD) or the British pound and the Japanese Yen (GBP/JPY).

Because you're not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the Japanese economy.In general, the exchange rate of a currency versus other currencies is a reflection of the condition of that country's economy, compared to the other countries' economies.

Unlike other financial markets like the New York Stock Exchange, the Forex spot market has neither a physical location nor a central exchange. The Forex market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.
Until the late 1990’s, only the “big guys” could play this game. The initial requirement was that you could trade only if you had about ten to fifty million bucks to start with! Forex was originally intended to be used by bankers and large institutions - and not by us “little guys”. However, because of the rise of the Internet, online Forex trading firms are now able to offer trading accounts to 'retail' traders like us.

Cari Uang di Internet

Saat ini metode bisnis yang sedang berkembang dan semakin maju pesat adalah dengan berbisnis Online. Survey Majalah Fortune Tgl. 27 September 1999, menampilkan 40 pemuda milyuner dunia. 10 teratas diantara 40 orang pemuda paling kaya didunia tersebut adalah berasal dari perusahaan internet (bisnis online) atau komputer. Dan sampai saat ini orang-orang tersebut masih tetap dalam urutan orang-orang terkaya didunia. Ada banyak cara cari uang dinternet, beberapa contoh diantaranya adalah bagi anda yang berjiwa spekulasi tinggi, anda bisa mengikut sertakan modal anda ke situs – situs HYIP, investasi “modal” bunga diatas rata-rata (bisa 100% lebih dalam sebulan), casino dan bisnis – bisnis lain yang relevan. Namun bisnis -bisnis tersebut sangat beresiko tinggi, yang bisa membawa kita kehilangan sebagian atau bahkan seluruh modal kita.Sebenarnya kalau kita jeli dan teliti banyak bisnis – bisnis lain di Internet yang tidak berbau spekulasi, bahkan kita bisa memulai bisnis tanpa modal sedikitpun.

Apa itu Valas / Forex Trading ?

Globalisasi ekonomi yang menuju kearah sistem perdagangan bebas telah mendorong pesatnya perdagangan barang dan jasa, salah satu perdagangan yang juga berkembang pesat adalah perdagangan derivative. Di era teknologi yang semakin maju seperti sekarang ini, kita tidak boleh kalah dengan para eksekutif berdasi di Bursa perdagangan saham, pengusaha – pengusaha di luar negeri, yang mendapat penghasilan / keuntungan tak terbatas dalam waktu cepat, kitapun bisa terjun langsung sebagai pelaku bisnis/pelaku pasar seperti mereka. Forex (Foreign Exchange) adalah perdagangan kurs valuta asing. FOREX TRADING (valas trading) merupakan pasar terbesar di dunia diukur berdasarkan nilai total transaksi. Menurut survei BIS (Bank International for Settlement – bank sentralnya bank-bank sentral seluruh dunia), yang dilakukan pada akhir tahun 2004, nilai transaksi forex mencapai USD 1,900miliar per hari, dengan tingkat pertumbuhan sebesar 20% setiap tahun dengan tersedianya sarana telekomunikasi yang canggih, setiap orang dapat mengikuti perkembangan nilai tukar valuta asing dan menjadi peserta pasar pada pasar – pasar utama dunia seperti Tokyo, London dan Amerika selama 24 jam sehari.Perdagangan valuta asing menawarkan kepada para investor tersedia pasar yang paling likuid dan pergerakan harga yang cepat. Besar volume perputaran pada perdagangan valuta asing tersebut membentuk suatu pasar yang bersifat persaingan sempurna karena tidak ada suatu pelaku pasarpun yang memilki kemampuan sebagai penentu harga (price setter).Dengan tersedianya fasilitas margin trading, dimana dengan (jumlah dana atau jaminan) yang relatif kecil, kita dapat meakukan transaksi yang besarnya beberapa kali lipat dari dana yang kita investasikan. Dalam perdagangan ini kita mempunyai kebebasan untuk mengambil posisi baik membeli atau menjual suatu mata uang tertentu dan melikuidasi / menutup.

The 123 Method of Trading has been around for a long time and first used in the futures market. Since then traders using it on just about every market and when applied well, can give amazingly accurate entry levels.Lets first start with the basic concept. During the course of any trend, either up or down, the market will form little peaks and valleys. see the chart below:

The problem is, how do you know when to enter the market and where do you get out. This is where the 1-2-3 method comes in. First let's look at a typical 1-2-3 set up:

Nice and simple, but it still doesn't tell us if we should take the trade. For this we add an indictor. You could use just about any indictor with this method but my preferred indictor is MACD with the standard settings of 12,26,9. With the indictor added, it now looks like this:

Now here is where it gets interesting. The rules for the trade are as follows:
Uptrend:

1. This works best as a reversal pattern so identify a previous downtrend.
2. Wait for the MACD to signal a buy and for the 1-2-3 set up to be in place.
3. As the market pulls back to point 3, the MACD should remain in buy mode or just slightly dip into sell.
4. Place a buy entry order 1 pip above point 2.
5. Place a stop loss order 1 pip below point 3.
6. Measure the distance between point 2 and 3 and project that forward for your exit.
7. Point 2, should not be lower than point 1.
The reverse is true for short trades. As the market progresses you can trail your stop to 1 pip below the most recent low (Valley in an uptrend). You can also use a break in a trend line as an exit.
Some examples: