Magicbreakout+: Forex Trading Strategy

Www.ForexWinners.
Net
Tim Trush & Julie Lavrin
introduce
MagicBreakout+
Forex Trading Strategy
Your guide to financial freedom.
© Tim Trush, Julie Lavrin, T&J Profit Club, 2007, All rights reserved
www.magicbreakout.com
Table Of Contents
Chapter I: Introduction
I.1. Why MagicBreakout+ ?___________________________________________________________4

Improvements and advantages.
I.2. Example________________________________________________________________________5
A typical example of a low risk entry and huge profit.
Chapter II: MagicBreakout+ proprietary indicators
II.1. Why are we trading with special indicators?_________________________________________6

Actually that's not an indicator that make us successful. We know some very profitable traders trading with basic indicators
or no indicators at all! One need an intelligent approach. Maybe we could be profitable without any indicators. But
indicators help much. For a beginner, it is much easier to trade a mechanical system based on indicators. An year later, you
can remove them from your chart because you will get a feeling of the market swing patterns.
II.2. Setup__________________________________________________________________________6
A step by step manual how to install and use our indicators even if you are a MetaTrader novice.
Chapter III: Perfect trend
III.1. What is a perfect trend?________________________________________________________10

Identify a trend better using more than one timeframe. We call it a “perfect trend”.
III.2. Identify the perfect trend_______________________________________________________10
An exact definition.
III.3. The trend indicators___________________________________________________________11
Identify a perfect trend using our indicators. Grab a strong weapon to identify the trend better than anybody else.
Chapter IV: Magic Entry
IV.1. The traffic signal______________________________________________________________13

This funny colored indicator will make your trading more comfortable and exciting.
IV.2. Magic Entry rule______________________________________________________________13
Enter the market at low risk just before the crowd. Identify the perfect trend. Filter bad trades.
IV.3. The MagicEntry indicator_______________________________________________________16
This indicator will test all the rules for you. Stop to watch the market continuously!
Chapter V: Magic Exit
V.1. Simple Exit____________________________________________________________________17

Let's repeat the basic exit rule and improve it in the next paragraph.
V.2. Advanced Exit_________________________________________________________________18
A simple exit rule stops you too early. You often see the market making a huge move without you.
V.3. Magic Exit____________________________________________________________________19
Learn where to move stoploss and how to protect your accumulated profit. Trade with a small risk but unlimited reward
potential.
www.magicbreakout.com 2
Chapter VI: Examples
VI.1. How Forex signal providers cheat you____________________________________________20

Most Forex signal providers or system sellers show how many pips they generated. This is a completely misleading
statistics! Learn why.
VI.2. How we made +67% in one month________________________________________________20
We show you step by step how our strategy works in the real market and how we made +67% in one month from
conservative trading. Several chart screenshots will explain it.
VI.3. Summary for the next two months________________________________________________25
Look in the history and accept that it's an easy task to make +162% in three months.
Chapter VII: How to trade with the trend

__________________________________________________________________________________26
With this little trick, you can filter those losses and dramatically increase the winning percentage. The less you trade, the
more you make!
Chapter VIII: Squeeze the trend to the end

__________________________________________________________________________________28
Our student reveals his secret how he made 5400% in one year.
Chapter I: Introduction
I.1. Why MagicBreakout+ ?
● MagicBreakout+ is a conservative trading strategy.

It's safe. You risk a small amount of money on every trade. A tiny risk but great profit potential.
● Mechanical.
Just follow the rules.
● More comfortable.
Our colored proprietary indicators make your trading comfortable and exciting.
● Identify a perfect trend.
With our non-standard approach you can identify the trend better than anybody else. Beware
from the sideways market.
● Filter bad trades.
MagicBreakout+ strategy provides better filtering of bad trades. Your losses will dramatically
decrease.
● Automated entry signal.
Our MagicEntry indicator developed for MetaTrader will test the rules for you every time. You
will never miss an opportunity or break the rules. This software will make you a lazy money
making machine.
● Magic exit.
With our advanced exiting rules you can make thousands of dollars in one single trade. Don't
exit when the market still moves! Catch the trend and ride. You will be profitable even if you
suffer more losses than winners, because one winner can cover ten losses.
● Protect your profits.
You will learn how to move stoploss and protect your open profit. Some traders don't know
where to move stoploss. They either risk too much, or they are stopped from a winning trade.
● Squeeze the trend to the end.
Our student Alex Fitz made a phenomenal profit of 5400% in one year. He surpassed our
performance several times, so we believed he was a lucky boy or a pure gambler. We couldn't
accept that it is possible to make such a huge profit from conservative trading. Finally, he
revealed his secret and kindly allowed us to publish it at the end of this book. Thanks, Alex!
I.2. Example
We got an automated buy signal at 2.0003. Our strategy tells us to place a stoploss at 1.9973. We are
risking only 30 pips.
The stoploss was moved several times. Our account was growing until the last stoploss was hit.
We exited at 2.0155 and made 152 pips. Reward-risk ratio is 152 / 30, greater than five! Using our safe
money management (you will learn in Chapter VI. Examples) we opened 8 minilots and we made
1216 dollars in one single trade.
Chapter II: MagicBreakout+ proprietary indicators
II.1. Why are we trading with special indicators?
Actually that's not an indicator that make us successful. We know some very profitable traders trading
with basic indicators or no indicators at all! There is no indicator that will make you successful. It's
about the discipline and money management. You can find many people in the forums spending
countless hours testing new indicators. Exploring hundreds or thousands of indicators is a waste of
time. Frankly, we were also there. As we were developing our strategy, we were trying to find the most
suitable indicators. But we were not looking for indicators that should hit the best entries and exits.
First, we had an idea about a trading system and then we were looking for indicators that would
describe our strategy exactly. That's the way how profitable traders achieved their success. The others
are wasting time and money testing new popular indicators and switching from one to another. It is
highly unlikely that you will find a profitable strategy by randomly testing indicators. One can do far
better gambling in Las Vegas. You need an intelligent approach. Maybe we could be profitable without
any indicators. But indicators help much. It is much easier for a beginner to trade a mechanical system
based on indicators. For a beginner, it is much easier to trade a mechanical system based on indicators.
An year later, you can remove them from your chart because you will get a feeling of the market swing
patterns.
II.2. Setup
To import our new indicators into MetaTrader platform, you have to copy all the files *.ex4 (Wave.ex4,
UpperWave.ex4, ColorCCI.ex4, MagicEntry.ex4) into the folder where all MetaTrader indicators are
installed.
You can find default indicators here:

MetaTraderPath\experts\indicators
where MetaTraderPath is the full path where you installed MetaTrader;
for example: C:\Program Files\MetaTrader 4\experts\indicators
Start MetaTrader.
Expand the Custom Indicators left box (double click) and you will find there four new indicators:
Wave, UpperWave, ColorCCI and MagicEntry
Wave
The Wave is nothing special, it actually consists of three exponential moving averages with period 34.
Add this indicator to the chart:

1) Double click on the Wave indicator on left.
2) On the popup window, click OK.
3) You should see three red lines in the chart. We call them the Wave.
UpperWave
This indicator is similar to the Wave indicator, but UpperWave is computed from the upper timeframe.
For example, UpperWave on the M30 (30-minute) chart is identical to the Wave on the H1 (hourly)
chart. We need both indicators in one single chart and that's why we hired a programmer to build this
indicator for us.

1) Double click on the UpperWave indicator on left.
3) You should see the three dashed blue lines in the chart.
ColorCCI
This indicator is an improved CCI indicator to fit our needs. It consists of three colors: red, yellow and
green.

1) Double click on the ColorCCI indicator on left.
3) You should see the colored histogram below the chart.
MagicEntry
This is the hart of our system. We will talk about it later in Chapter IV: Magic Entry.

1) Double click on the MagicEntry indicator on left.
3) You should see some small red and blue arrows in the chart. They represent buy and sell signals.
There are also small yellow points. They indicate where to place stoploss.
You can edit the ShowAlert and SendEmail values to enable / disable the alerts or to send trade signals
to your e-mail. To configure your e-mail in MetaTrader, just go to Tools → Options → Email tab and
enter the SMTP server of your Internet service provider.
The Look_Back parameter sets the number of candles to look back in the history and show the entry
arrows.
Now, our chart is prepared for trading the MagicBreakout+ strategy. It will look like this:
In the next chapter, we will talk about the Wave and UpperWave indicators and the trend definition.
Chapter III: Perfect trend
III.1. What is a perfect trend?
In the MagicBreakout strategy book, you have learned how to define a trend. When price is above the
Wave, there is an uptrend. When price is below the Wave, there is a downtrend. More exactly, the
market is trending up when price is above the Wave-bottom. Similarly, the market is trending down
when price is below the Wave-top.
Uptrend Downtrend
This condition depends on timeframe. Imagine: one trader is trading EUR/USD on hourly chart and he
has defined an uptrend. The second trader is trading the same currency pair EUR/USD on 30-minute
chart and he has defined a downtrend. There is a conflict. The market can move up on one timeframe,
but down on another. We would do better if we defined a trend on both timeframes. Most traders stick
to one timeframe without any idea what happens on another timeframe. Their approach is not bad, but
we will do better watching the higher timeframe too.
III.2. Identify the perfect trend
● There is a perfect uptrend when you see an uptrend on two consecutive timeframes;
● There is a perfect downtrend when you see a downtrend on two consecutive timeframes.
In MetaTrader 4, the two consecutive timeframes are: M1 and M5; M5 and M15; M15 and M30; M30
and H1; H1 and H4; H4 and D1; D1 and W1; W1 and MN. For example, if you are trading on 30-
minute timeframe (M30), switch to hourly timeframe (H1), check the trend and switch back. Switching
between timeframes is impractical, so we have developed the UpperWave indicator. We will not only
be able to define a perfect trend watching one single timeframe, but we will define a more perfect trend
using both waves together. We will talk about a more perfect trend in the next paragraph.
III.3. The trend indicators
Look at the chart we have prepared. There are two waves: one red indicator called the Wave and one
blue indicator called the UpperWave. It is dark colored to have our chart more visible, but you can
simply change the colors you feel comfortable with.
How to change the color and line style:

Press CTRL+I. An indicator box will show.
1) Select an indicator (e. g. UpperWave) and click Edit.

2) Switch to the Colors tab.
3) Double click on the color and choose a color you like. You can change the line width and line style
too.
By default, you should see something like this (we recommend to hide the grid by pressing CTRL+G):
There is a perfect uptrend in this picture. The price is above the Wave and above the UpperWave at the
same time. In addition, the Wave is above the UpperWave. This is the last condition for our final
definition.
A perfect uptrend:
● The price is above the Wave-bottom;

● The price is above the UpperWave-bottom;
● The Wave is above the UpperWave.
A perfect downtrend:
● The price is below the Wave-top;

● The price is below the UpperWave-top;
● The Wave is below the UpperWave.
Perfect uptrend Perfect downtrend
Now, you own a strong weapon to identify the trend better than anybody else.
Chapter IV: Magic Entry
IV.1. The traffic signal
The ColorCCI indicator is a standard CCI indicator with period 20, but it looks somewhat different.
There are red, yellow and green lines below our chart. Let's explain what do they mean.
● Red color: CCI is below the -100 level;

● Yellow color: CCI is between +100 and -100;
● Green color: CCI is above the +100 level.
This view is much more simple and easier to read.
● CCI crossed the +100 level upwards when the color changed from yellow to green;
● CCI crossed the -100 level downwards when the color changed from yellow to red.
IV.2. Magic Entry rule
The rules are similar to the MagicBreakout strategy rules. First, we will discuss long entries. Have an
eye to the changes.
● Be sure that the market is trending up.

We have defined the perfect trend in Chapter III: Perfect trend.
● Price was above the Wave for some time.
(above the Wave-top)
● Price entered the Wave.
Price was above the Wave and then crossed the Wave-top downward.
● ColorCCI was yellow for at least five bars.
● CorolCCI changed the color from yellow to green; A POSSIBLE LONG ENTRY SIGNAL
on the next candle open.
This is a good signal to go long on the next candle open. But be careful...
● Check that all candle bodies were above the UpperWave.
This important rule filters those swing patterns that plung too deeply.
● Check that the Wave was above the UpperWave at all candles.
Again, this rule filters some other ugly swing patterns that plung too deeply.
● Buy now!
If all above is filled, buy as new candle opens.
Practical implementation
Practically, you must follow the written rules backwards:
● ColorCCI changed to green.

Was it yellow for at least five bars? Is it green now? If yes, continue to the next step.
Remember, the signal is valid only when the candle has already closed.
● Is price trending up perfectly?
Is price above the Wave-bottom? Is price above the UpperWave-bottom? Is Wave above the
UpperWave? Stick with our definition! If yes, go to the next step.
● Do you see a valid swing pattern?
Train your eyes on the first few trades and you will see the swing pattern subconsciously
without reviewing the rules. Review: price was above the Wave and then entered the Wave (in
other words, price crossed the Wave-top downward).
There are two additional filters to throw away bad trades (ugly swing patterns):
1. Check that all candle bodies are above the UpperWave;
2. Check that the Wave is above the UpperWave (especially at the swing-low).
OK?
● Buy now!
And prepare your exit targets...
You can simply create the rules for a short entry:
● ColorCCI changed to red.

Was it yellow for at least five bars? Is it red now? If yes, continue to the next step.
Remember, the signal is valid only on candle close.
● Is price trending down perfectly?
Is price below the Wave-top? Is price below the UpperWave-top? Is Wave below the
UpperWave? Stick with our definition! If yes, go to the next step.
● Do you see a valid swing pattern?
Train your eyes on the first few trades and you will see the swing pattern subconsciously
without reviewing the rules. Review: price was below the Wave and then entered the Wave (in
other words, price crossed the Wave-bottom upward).
There are two additional filters to throw away bad trades (ugly swing patterns):
1. Check that all candle bodies are below the UpperWave.
2. Check that the Wave is below the UpperWave (especially at the swing-high).
OK?
● Sell now!
And prepare your exit targets...
IV.3. The MagicEntry indicator
All the rules are tested for you automatically with this great indicator! The blue arrows indicate buy
signals and the red arrows indicate sell signals.
● Buy signal: open a long position as the next candle opens;

● Sell signal: open a short position as the next candle opens.
Buy signal Sell signal
The small yellow dot marks a candle where to place a stoploss order. This indicator detects the swing
low for us.
● Long position: you should place a stoploss order just one point below the candle low.
● Short position: you should place a stoploss order just one point above the candle high.
Attention: Use this automated indicator carefully! Read the Chapter VI: Examples first!
Chapter V: Magic Exit
V.1. Simple Exit
We mentioned the simple exit rule in the basic MagicBreakout strategy book. Recall:
Long position:
● Place the first profit target (sell-limit order) at 1.618 Fibonacci level;
● Place the second profit target (sell-limit order) at 2.0 Fibonacci level;
● Place stoploss (sell-stop order) at 0.0 Fibonacci level.
Short position:
● Place the first profit target (buy-limit order) at 1.618 Fibonacci level;
● Place the second profit target (buy-limit order) at 2.0 Fibonacci level;
● Place stoploss (buy-stop order) at 0.0 Fibonacci level.
It works well. But we have found something much better...
V.2. Advanced Exit
The market can move your way and you make profit or it quickly reverses back and hits your stoploss.
In some cases, the market hits your both profit targets and continues to move for a long time. You see
the market making a huge move without you. You could make thousands of dollars in one single trade
but you don't because you have already exited. How to avoid that? How to make a huge profit from one
big move?
Look at the previous example again:
The market continues to move up. Wait for the UpperWave cross and take profit. In such a big move
you don't need to watch the market constantly. We look at the chart every four or eight hours (a
successful trader sleeps at least eight hours :-). It doesn't make a big difference (sometimes the market
quickly retraces back up and continues to move).
The advanced exit rule:
● Long position: exit when the price crosses the UpperWave-bottom downward;
● Short position: exit when the price crosses the UpperWave-top upward.
V.3. Magic Exit
Look at the previous example once again. There are more blue arrows on the way. Some traders would
buy more lots and add to the long position to achieve greater profit. Don't do that! Your opened
position may become too big. Remember, greed is your worst enemy. We will handle these magic
entries in other way.
On every magic entry, move your stoploss just one point below the swing low (marked with the yellow
dot). As you can see in the chart, the last stoploss was hit before the UpperWave-bottom was crossed.
The stoploss protects our accumulated profit.
The magic exit rule: Www.ForexWinners.Net

● Place the first profit target (sell-limit order) at 1.618 Fibonacci level;
● Place the second profit target (sell-limit order) at 2.0 Fibonacci level;
● Place stoploss (sell-stop order) at 0.0 Fibonacci level;
● On every new magic entry signal, move the stoploss;
● If the first profit target was hit, exit with one third of your position;
● If the second profit target was hit, exit with another third of your position;
● If the UpperWave was crossed as described, exit completely.
The magic exit is a combination of simple exit and advanced exit. In addition, a stoploss is moved. You
should close a part of your position at Fibonacci levels and one third of your position has a potential to
accumulate unlimited profit.
Chapter VI: Examples
VI.1. How Forex signal providers cheat you
Many Forex signal providers or system sellers show how many pips they generated. This is a
completely misleading statistics! We do not earn any pips. We earn money, not pips. How many pips –
at what risk? Think about it. It's easy to make 100 pips if you were risking 1000 pips because there is a
high probability that such a risky trade will be a winner.
You should ask: “How much money I would make if I risk no more than...”, that's the right question.
VI.2. How we made +67% in one month
Let us demonstrate a few trades on GBP/USD currency pair starting with June, 2007. We recommend
you to trade GBP/USD on 30-minute chart because it is a well trending currency pair. To make things
clear, we will not use the Fibonacci exit targets. With them, the results would be even better.
In this example, we have a $5000 account and we are risking no more than 5% on every trade. This is a
very conservative approach.
On 1st June there is a valid signal. The next candle

opens at 1.9793. You should buy at 1.9793 and
place a stoploss at 1.9766. Ask yourself: “How
many lots should I open?”
We are risking 1.9793 – 1.9766 = 27 pips.
27 pips equal to 27 dollars if we opened one

minilot.
Since you risk approximately 5% of your account

on every trade (that's 250 dollars), open 9
minilots.
(approximately, 250 / 27 = 9)
There were two more buy signals later. We moved
the stoploss on every signal. The price hit our
stoploss (and pierced the UpperWave) and we are
out at 1.9913. We made 1.9913 – 1.9793 = 120
pips. Since we have opened 9 minilots, we made 9
* 120 = 1080 dollars. Yes, on thousand dollars!
We made 20% of our initial account in one single
trade risking no more than 5%. Wow!
Go to the next trade. Buy at 1.9743 and place

stoploss at 1.9694. We are risking 1.9743 –
1.9694 = 49 pips. We open approximately 250 /
49 = 5 minilots.
Shortly a new signal appears and we are moving

stoploss to 1.9723.
The stoploss is hit. We lost 1.9743 – 1.9723 = 20

pips or 100 dollars. We lost only 0.5% of our
initial account.
Move on. There is a sell signal, so we open a
short position at 1.9720 and place a stoploss at
1.9739.
We are risking 1.9739 – 1.9720 = 19 pips, so we

open approximately 250 / 19 = 13 minilots.
On the next signal, we move the stoploss to

1.9709. The stoploss is hit and we exit.
We made a small profit 1.9720 – 1.9709 = 11 pips

or 143 dollars. The non-trending market looks
ugly, but we still made a small profit!
Next signal is long. Buy at 1.9776 and place
stoploss at 1.9737.

Look, we entered the market just before the

massive breakout.
The stoploss was moved two times and the last

stoploss was hit at 1.9835. We are out.
Let's compute our profit.

1.9835 – 1.9776 = 59 pips.
We made 6 * 59 = 354 dollars. Not so bad.
Oh no, the market continues to move up without

us! It happens. But this time there is another
signal and we can follow.
Buy at 1.9857 and place a stoploss at 1.9825.

We moved the stoploss to 1.9906 and suddenly it
was hit.
We made 1.9906 – 1.9857 = 49 pips and that

equals to 8 * 49 = 392 dollars. Another profit.
The move continues and we get a buy signal

again!
Buy at 1.9927 and place a stoploss at 1.9886. We

are risking 1.9927 – 1.9886 = 41 pips, so we open
approximately 250 / 41 = 6 minilots.
The stoploss was moved several times and finally

was hit at 1.9976.
We made a profit of 1.9976 – 1.9927 = 49 pips

and that equals to 6 * 49 = 294 dollars.
This is the way how a stoploss makes a profit.
Another good signal. Buy at 2.0003 and place a
stoploss at 1.9973. Look, we enter the market just
before the big move.

We caught a decent move! Stoploss was moved

six times and the last stoploss is at 2.0155.
We made 2.0155 – 2.0003 = 152 pips.

That's 8 * 152 = 1216 dollars.
Nice!
Our account is growing very fast. Our initial account was $5000 and now is
$5000 + $1080 – $100 + $143 + $354 + $392 + $294 + $1216 = $8379.
We made +67% in one month!
VI.3. Summary for the next two months
Enter Stoploss minilots Exit Profit [pips] Profit [dollars]

June, 2007
Buy at 2.0122 2.0079 6 2.0158 36 $216
Sell at 1.9908 1.9872 7 1.9872 -36 -$252
Buy at 2.0157 2.0144 19 2.0144 -13 -$247
Buy at 2.0168 2.0143 10 2.0307 139 $1390
Buy at 2.0353 2.0319 7 2.0499 146 $1025
Buy at 2.0567 2.0536 8 2.0600 33 $262
Sell at 1.9490 1.9457 8 1.9457 -33 -$264
Sell at 1.9532 1.9507 10 1.9710 178 $1780
Buy at 2.0362 2.0285 3 2.0285 -77 -$231
August, 2007
Sell at 1.9715 1.9703 21 1.9703 -12 -$252
Buy at 2.0390 2.0331 4 2.0394 4 $16
Sell at 1.9696 1.9664 8 1.9744 48 $384
Sell at 1.9812 1.9757 5 1.9757 -55 -$275
Sell at 1.9882 1.9843 6 2.0125 243 $1458
Buy at 1.9883 1.9815 4 1.9835 -48 -$191
Buy at 2.0059 2.0006 5 2.0111 52 $262
Sell at 1.9959 1.9917 6 1.9940 -19 -$115
Buy at 2.0160 2.0111 5 2.0111 -49 -$245
Starting with $5000, there is $13 100 on our account after three months. We made $8100 or +162% in
three months! Did you believe that you can double or triple your money in such a short time risking
only 5% per trade? Here is the proof.
If you started with $10 000, you would make $16 200. If you started with $500, you would make $810.
For a small account, we strongly recommend you a Forex broker that supports microlots
(1 microlot = 0.1 minilot = 0.01 lot). These results come from a very conservative approach. As your
account grows, you can risk more than 5% of your initial account, actually 5% of your current account.
This way your account grows faster and you can make explosive profits in a short time.
Note: To look at the MetaTrader historical data, disable autoscroll function and simply look back
using the left key on your keyboard.
If the indicators look strange when loading historical data, restart MetaTrader.
Chapter VII: How to trade with the trend
Although strong trends offer big profit potential, sometimes prices move sideways for a while, the
market behavior is unpredictable and you can suffer a series of small losses. With this little trick, you
can filter those losses and dramatically increase the winning percentage. The less you trade, the more
you make!
Trend vs. Chop
Chop, also known as horizontal price movement, flat market, range-bound market or sideways market,
is a situation where the prices change little over a specific period of time. There is no clear direction for
the market.
Trend Chop
To distinguish between the trend and chop requires practice, but actually, it can be done simply – using
the Wave.
Trend Chop
Determine the clock angle of the Wave.
• The market is in chop when the Wave is traveling at three o'clock. We should not take any
signal.
• The market is in strong uptrend when the Wave is traveling at noon to two o'clock.
• The market is in strong downtrend when the Wave is traveling at four to six o'clock.
Now you see that we can do much better taking only the signals with the strong trend.
Chapter VIII: Squeeze the trend to the end
Our student Alex Fitz made a phenomenal profit of 5400% in one year. He surpassed our performance
several times, so we believed he was a lucky boy or a pure gambler. We couldn't accept that it is
possible to make such a huge profit from conservative trading. Finally, he revealed his secret and
kindly allowed us to publish it at the end of this book. Thanks, Alex!
Alex: “One day, I traded this strategy as usual. I noticed that I often get out from the market too early.
I have found something called divergence that allows me to catch the huge trend to the end. It was my
happy day.”
How does divergence work?
Look at the example.
The trend was going up and suddenly reversed. My discovery allowed me to forecast that the trend is
going to reverse. There is an RSI indicator (Relative Strength Index) on the chart. It gives us some kind
of information about the market strength.
Wait, how do you identify the market strength?
In the bull market, the greater the RSI value, the greater the market strength. In the bear market, the
lower the RSI value, the greater the market strength . For example, if RSI is close to zero and the
market is trending up, it means that the strength is very low, there are only few buyers. It's not a good
idea to open a long position.
Back to the divergence. How do you know that the trend is going to reverse?
Look at the example again.
The market made two significant highs. I connected them with a red line. Then I connected the
corresponding highs on the RSI indicator with a blue line. Look what happens. The red line is trending
up however the blue line is trending down. This interesting pattern is called divergence and predicts a
possible change of the trend. I use to exit immediately when I see a divergence.
It sounds like a hokus-pokus. Why does this pattern work?
The market is going up, but the RSI is going down. In other words, the strength diminishes. It looks like
there are no more buyers to sustain the uptrend. It is very dangerous to stay with the trend. It's more
safe to exit.
Does this pattern work 100%?
No, this pattern does not predict a trend reversal 100%. It only tells you that it would be better to exit
because the trend may reverse. I used this pattern as my own exit rule and that's the secret how I made
money on huge trends.
Licensed to
Happy Trading!
Risk disclaimer:
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree
of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully
consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a
loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.
CFTC RULE 4.41 - Hypothetical performance results have many inherent limitations. No representation is being made that
any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences
between hypothetical performance results and the actual results subsequently achieved by any particular trading program.
One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight.
In addition, hypothetical trading does not involve financial risk. Variables such as the ability to adhere to a particular trading
program in spite of trading losses as well as maintaining adequate liquidity are material points which can adversely affect
actual real trading results.
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Magicbreakout+: Forex Trading Strategy

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Magicbreakout+: Forex Trading Strategy

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What is the MagicBreakout+ trading strategy?

What is the MagicBreakout+ trading strategy?

How do traders identify a perfect trend?

How do traders identify a perfect trend?

Www.ForexWinners.

Tim Trush & Julie Lavrin

I.1. Why MagicBreakout+ ?___________________________________________________________4

Chapter II: MagicBreakout+ proprietary indicators

II.1. Why are we trading with special indicators?_________________________________________6

Chapter III: Perfect trend

III.1. What is a perfect trend?________________________________________________________10

Chapter IV: Magic Entry

IV.1. The traffic signal______________________________________________________________13

Chapter V: Magic Exit

V.1. Simple Exit____________________________________________________________________17

VI.1. How Forex signal providers cheat you____________________________________________20

Chapter VII: How to trade with the trend

Chapter VIII: Squeeze the trend to the end

I.1. Why MagicBreakout+ ?

● MagicBreakout+ is a conservative trading strategy.

II.1. Why are we trading with special indicators?

You can find default indicators here:

Add this indicator to the chart:

Add this indicator to the chart:

Add this indicator to the chart:

Add this indicator to the chart:

III.1. What is a perfect trend?

III.2. Identify the perfect trend

How to change the color and line style:

1) Select an indicator (e. g. UpperWave) and click Edit.

● The price is above the Wave-bottom;

● The price is below the Wave-top;

Perfect uptrend Perfect downtrend

IV.1. The traffic signal

● Red color: CCI is below the -100 level;

This view is much more simple and easier to read.

IV.2. Magic Entry rule

● Be sure that the market is trending up.

Practically, you must follow the written rules backwards:

● ColorCCI changed to green.

● ColorCCI changed to red.

● Buy signal: open a long position as the next candle opens;

Buy signal Sell signal

V.1. Simple Exit

It works well. But we have found something much better...

Look at the previous example again:

The advanced exit rule:

The magic exit rule: Www.ForexWinners.Net

VI.1. How Forex signal providers cheat you

VI.2. How we made +67% in one month

On 1st June there is a valid signal. The next candle

27 pips equal to 27 dollars if we opened one

Since you risk approximately 5% of your account

Go to the next trade. Buy at 1.9743 and place

Shortly a new signal appears and we are moving

The stoploss is hit. We lost 1.9743 – 1.9723 = 20

We are risking 1.9739 – 1.9720 = 19 pips, so we

On the next signal, we move the stoploss to

We made a small profit 1.9720 – 1.9709 = 11 pips