My mate Brian from Inside Out trading gave me permission to give this report out to you all. I trust that you will enjoy it and find some benefit from it…

I sent out two pdf’s recently to my mailing list. I just wanted to post them here to the site in-case you want to refer back to them and you no longer have the email.

Hope you enjoy- both subject matters are critical to establishing a strong and reliable Traders -mindset.

The Enemy Within

Habits Maketh The Man

Cheers, hope you enjoy,

Chris.

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Here is that link again:

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Here is a brief PDF…yes brief because I am, after all these years, finally coming to my senses. I have always believed more is more…well I don’t have time for more…I am in to much of a hurry these days, as are we all, so I will be brief…but in being brief I will not be negligible.
The message I bring this week is simple, but extremely powerful!
Hope you enjoy,
Chris.
Habits & Fear PDF

EUR/USD
Weekly Trend direction: Bearish
Weekly trend reversal level: 1.3340
Key G7 resistance levels: 1.2900/20, 1.2960, 1.3030, 1.3100
Counter-trend and scalping opportunities:

Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.

Today’s trade suggestion: A sudden reversal of fortunes for the Euro has created a large bearish weekly candle and a drop below last week’s reversal level. That means we are bearish this week, whilst below 1.3340, a long way above us. Remember that August is traditionally a tough month to trade due to thin markets creating sudden swings in both directions. The two hundred period moving averages are around about the first resistance levels between 1.2900 and 1.2960, and these are the first levels where we’ll look to sell. Targets will be back down at 1.2750 and perhaps lower.

Update: Pretty much ranged since the start of the week. The strategy remains the same – sell into rallies, with resistance levels unchanged. After last week’s dramatic move lower, it’s not unusual to get a period of
consolidation whilst the traders not on holiday digest the moves.
Update Friday: No change – strategy remains the same!

Summary: Sell rallies to resistance levels, starting at 1.2900, after a clear G7 entry signal. Target 1.2750 and
perhaps lower.

GBP/USD
Weekly Trend direction: Bearish
Weekly trend reversal level: 1.6000
Key G7 resistance levels: 1.5680/1.5700, 1.5780, 1.5820, 1.5900
Counter-trend opportunities:

Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal

Today’s trade suggestion:
Similar to the euro, the pound formed a large bearish engulfing candle last week, reversing the weekly direction this week to short. We have fallen back to the weekly trend line and seen and small bounce. The strategy is very simple this week, and resistance levels are well defined, with confluences of technical resistance all the way up to 1.5900. At the moment, the most likely candidate for a sell level is 1.5680 – 1.5700, and we’ll watch closely for a clear G7 reversal signal before selling. If this fails, look for signal higher up at 1.5780 and 1.5820.

Update: The pound moved up to the first resistance level at 1.5700 yesterday before falling back to last week’s low. We were able to sell into the rally during session yesterday, but we got taken out at breakeven due to the intraday chop. The strategy remains unchanged. It will be interesting to see if we break below 1.5530 today – in which case the resistance levels will need to be adjusted.
Update Friday: Strategy remains unchanged. We’ve had two great opportunities to sell into the news rallies, with over 110 pips gained. Perhaps best to call it a week.

Summary:
Sell rallies to 1.5680/1.5700 after a clear G7 signal. Target 1.5550. If this should fail, watch for reversals at the resistance levels higher up.

USD/JPY
Weekly Trend direction: Bullish
Weekly trend reversal level: 84.70
Key G7 support levels: 85.80, 85.50, 85.30, 85.00
Counter-trend opportunities:

Strategy: Whilst above the weekly trend reversal buy dips to support levels after an entry signal.

Today’s trade suggestion:
Sigh…A weekly “piercing pattern” candle last week means we have reversed to long. Whether we’ll hold above the magical 85.00 level (15 yr low) remains to be seen. The weekly “falling wedge” pattern, last week’s piercing pattern and the ever-present danger of price protection by the Bank of Japan, means that long trades are the best bet whilst above 84.70. Look to buy the dollar into dips whilst above here, for a target of 86.40 and then 88.00.

Update: The Dollar fell back to the key hourly 78.6% Fibonacci level yesterday, where we bought. Still hovering around the entry at 85.35, and still inconclusive. Will we fall through the 78.6% and retest the 15 yr lows at 84.70, or will support hold? Today should tell. Holding longs from 85.35, with updates as the day progresses!
Update Friday: Unchanged. Messy and annoying. Currently long the dollar, but the jury is still out. Weekly
direction is long.

Summary:
Buy into dips into support levels whilst above 84.70, after a clear G7 entry signal. Target 86.40 and then 88.00

EUR/USD Weekly Trend direction: Bearish

Weekly trend reversal level: 1.3340 Key G7 resistance levels: 1.2900/20, 1.2960, 1.3030, 1.3100 Counter-trend and scalping opportunities:

Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal. Today’s trade suggestion: A sudden reversal of fortunes for the Euro has created a large bearish weekly candle and a drop below last week’s reversal level. That means we are bearish this week, whilst below 1.3340, a long way above us. Remember that August is traditionally a tough month to trade due to thin markets creating sudden swings in both directions. The two hundred period moving averages are around about the first resistance levels between 1.2900 and 1.2960, and these are the first levels where we’ll look to sell. Targets will be back down at 1.2750 and perhaps lower.

Summary: Sell rallies to resistance

EUR/USD

Weekly Trend direction: Bullish
Weekly trend reversal level: 1.3040
Key G7 support levels: 1.3100, 1.3040/50
Counter-trend and scalping opportunities:

Strategy: Whilst above the weekly trend reversal level buy dips to support levels after an entry signal.

Today’s trade suggestion:
August chop already seems to have set in, with Friday’s NFP gains already wiped out, and nasty swings yesterday.
We haven’t managed to get into any Euro trades this week so far, and just as well – bullish attempts would have
been stopped out. For today, we’ll look to buy the euro into dips with just two support levels left beneath us:
1.3100 (yesterdays support low) and 1.3040/50 (the weekly reversal level and the 78.6% retracement of the last
swing rally) Be careful of whipsaw, and don’t be in a rush to enter this market today. With over 300 pips in the
bank already this month, I am willing to be VERY patient.

Summary: Buy dips to support levels listed above after a clear G7 entry signal. If we drop below the weekly
reversal level at 1.3040. Stay out.

Note that Scenario 2 produces $95,000 in the 24 month period.

That’s a return of $85,000 on an initial investment of only $10,000.

And that’s allowing for three losing months of 350 pips each.

OK well, there you have it. How to transform a small trading account into a much larger one using sensible money management and a profitable trading system. I would very much like to help you achieve the same.
In fact, we have been using a leverage of 5:1 in these calculations, but when using 10:1 leverage, the same $80,000 is achieved in only 2 years from a starting balance of only $1000!

Consider these facts:
1. The scenario tables above, which show you can multiply your account over and over again, are simple maths – no gimmicks and no tricks – as long as you can stick to the trading methods and keep your head!

2. If you apply the 3 simple disciplines we have mentioned, and join the Live Charter Group of James’s, so that you have a reliable trading system as well to assist you, you have a good chance of converting your account into a genuine money spinner! Of course there are no guarantees, and there is always a risk, but we have shown it can and is being achieved.

3. On your own, you may struggle to produce profitable trades. With the Live Charter Group you will have the best possible chance of making money from the Forex. And it will only cost you a small fraction of your trading profits – that’s why we even took them off the profit examples on the Excel sheets above.
I really hope that this article clarifies the power of compounding for you, and helps you understand just how important this factor is in the long term picture.

Cheers for now,
Chris.
P.S. My business partner, James, applies this in a live environment to show traders exactly how it works in the real world. If you really want to learn how to apply this practically then check out his Live Charter Group .

EUR/USD
Weekly Trend direction: Bullish
Weekly trend reversal level: 1.2860
Key G7 support levels: 1.2960/80, 1.2920, 1.2660/70
Counter-trend and scalping opportunities:

Strategy: Whilst above the weekly trend reversal level buy dips to support levels after an entry signal.
Today’s trade suggestion:
A messy old day on Friday (as expected on the last Friday of the month) saw some nasty whipsaws leaving the price essentially unchanged since Thursday. This week we are bullish yet again, with weekly support at 1.2860 and various support levels above there at 1.2960 and 1.2920. The strategy remains unchanged – but the euro into dips after a clear g7 entry signal with a target of 1.3100 and perhaps higher. A word of caution – the price has reached just shy of the weekly 38% retracement level (see weekly) chart, and the euro is more overbought than it has been since October 2009. This means we are possibly due for a sharp correction, which could take us below the weekly trend reversal level in quick time.

Summary: Buy dips to support levels listed above after a clear G7 entry signal, allowing for a sudden pullback
as far as 1.2500. First target 1.3000 and then 1.3120.

This last scenario was based on 200 pips per month and no losing months, at a 5:1 leverage. We have already discussed leverage, but let me remind you that

this means 5 mini lots per trade position per $10,000 in your trade account, or 5 100k lots per trade position per $100,000 in your full account.

As you can see, I have even allowed for a deduction of $100 per month for subscription fees!

The account grows from a starting balance of $10,000 to a final balance of $88,200 after two years!

Yes, that’s eighty eight thousand two hundred dollars after two years!

This has been achieved at a conservative 200 pips a month with a very safe leverage of only 5:1, and you can see that most of the growth has come about

through sensible growth and re-investing profits at a safe rate of return.

That’s the power of compounding!

Note how the number of lots traded grows as the account balance grows, enabling you to make more money from the money you have already made. If you push the

projection out for just one more year, the profits are an amazing $274,200!!

Well, if only it were as simple as that. The problem is that not every month is a winner (although 100% are at this time) and we don’t make 200 pips every

other month. The good news is that we actually make over 300 pips per month most of the time, and the bad news is that we must allow for losing months.

Ok, so let’s look at scenario 2 – a more realistic picture of what might be achieved. I have changed the winning months to 300 pips each (compare this to the

actual results in the table on the first page) and have also allowed for three losing months of -350 pips each. Let’s look at the more realistic Scenario 2:

MT2nd spreadsheet