The Cash Bands System instantly, scroll below on this page!

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THE CASH BANDS SYSTEM



Download The Cash Bands System instantly, scroll below on this page!

There are absolutely no strings attached… This is my gift to you.

This system is simple — and profitable.

It is so simple that you may think it looks too easy… It really is this easy to trade Forex, and you could be banking pips with this today!

Traders consistently ask for a super-simple, easy to understand, and instant way to begin trading. The Forex Cash Bands system is designed to fit the bill in every way!

With your exclusive Forex Cash Bands gift you get:

• A personal video tutorial that takes you through exactly how to make the best possible trades.
• A complete system report, that walks you from the basics through the rules so you will understand how to read every indicator for maximum cash flow.
• This completely free system is a perpetual cash machine, and could have you cranking out consistently successful trades and big profits faster than anything you’ve used yet.

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Introduction

With this system, we want to lay down all the necessary concepts of trading the Cash Bands system.

This system can be used by uses a combination of the MACD Histogram, Bollinger Bands and Williams %R indicator.

This is a great system when the currency is in a trading range – going in a sideways direction rather than trending up or down.

If you are a beginner, it’s advisable that you limit your use of this system to times when the currency is ranging.

Let’s begin by covering the various indicators that make up the base of the system…

Moving Average Convergence Divergence (MACD)

I. Definition/Description

MACD stands for Moving Average Convergence/Divergence which basically means moving together (convergence) and moving apart (divergence). There is another definition of divergence, but that is a whole other manual altogether. This indicator is based on a short term exponential moving average, 12, a longer term exponential moving average, 26, and a simple moving average of the difference between the two, or signal line, 9.

If you were to place a 12 EMA and a 26 EMA on the charts along with the MACD, each time the EMAs would cross, you would have a crossover of the MACD above or below its zero line, indicating the potential start or finish of a trend.

The farther apart the 12 and 26 EMAs get, the stronger the trend – divergence. The closer they get together, the weaker the trend – convergence.

This indicator was developed in the 1970s by Gerald Appel as a trending momentum indicator and moves above and below a zero line to indicate bias of the market. Above the zero line means the market is trending upwards. Below the zero line means the market is trending downwards.

Now we don’t see the moving averages in the MACD. Instead they are represented by what’s called a histogram. Other signals besides the zero line crossover include the signal line exiting the histogram. This will be the basis for our signals.

II. Application & Settings

We’ll follow the same steps as before to load our MACD only this time we’ll go to Oscillators.

1. Insert
2. Indicators
3. Oscillators
4. Left Click MACD

Next, a pop up window appears just like for the SMA. We’re going to Plot MACD Histogram Settings (9, 12, 26, Close, Exponential) leave MACD on the default settings of Fast EMA – 12, Slow EMA – 26, and MACD SMA (single line) 9, applied to close, so your window should look just like the one below.

Now we’re going to change the colors on the second tab – Colors. We’re going to select Red for the Main (histogram).

Next, select the thickness setting just like this….

Next we’re going to change the Signal Color to Blue and have that set on the second thickness setting as well, just like so…

Next we’ll pop over to the Levels tab and click the Add button and then press OK twice and that will add the MACD to your platform.

Once on your charts the Macd will look like the image below:

 

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Bollinger Bands

I. Definition/Description

Invented by John Bollinger in the 1980s, the Bollinger Bands give us a visual representation of the market’s volatility. The Bollinger Bands have three different parts:

Upper Band – 2 standard deviations above the Middle Band.

Lower Band – 2 standard deviations below the Middle Band.

Middle Band – 20 SMA.

When the market is quiet, the Bollinger Bands contract, or squeeze together. When the market is active, price pushes the bands outward, so they expand. When price is outside the bands, the market is showing strength. Also, when price makes bottoms outside the bands and then lower lows, but those lows remain inside the bands, there is a strong likelihood that price will reverse upwards. On the flip side, if price makes highs outside the bands then more highs, but those second highs are inside the bands, there is a strong likelihood that price will reverse downwards.

Now, when price moves away from the upper band it has a tendency to go to the lower band and when price moves away from the lower band it has a tendency to move towards the upper band. This can provide opportunities for targets as well as dynamic support and resistance. The other great feature about the Bollinger Bands is that when price is at the upper band, it is considered overbought and when it’s at the lower band, it is considered oversold.

II. Application & Settings

We’re going to apply the Bollinger Bands in the same fashion we applied the other indicators:

1. Insert
2. Indicators
3. Trend
4. Left Click on Bollinger Bands

When the pop up appears we’ll leave the settings at the default MT4 settings but we’ll change the color to Orange. So, you have the Period = 20, Shift = 0, Deviations = 2 and Style = Orange.

Once on your chart the Bollinger Bands will display as in the image below:

Williams %R indicator

I. Definition/Description

Plot Williams %R Settings:

Williams %R = 9

Invert Williams %R = ON

For Williams %R you don’t need to know how it was calculated or what it references; you simply need to take signals from it

Developed by Larry Williams, Williams %R is a momentum indicator that is the inverse of the Fast Stochastic Oscillator. It is also referred to as %R, Williams %R reflects the level of the close relative to the highest high for the look-back period.

In contrast, the Stochastic Oscillator reflects the level of the close relative to the lowest low.

%R corrects for the inversion by multiplying the raw value by -100. As a result, the Fast Stochastic Oscillator and Williams %R produce the exact same lines, only the scaling is different.

Williams %R oscillates from 0 to -100.

Readings from 0 to -20 are considered overbought.

Readings from -80 to -100 are considered oversold.

II. Application & Settings

We’re going to apply this indicator in the same fashion we applied the other indicators:

1. Insert
2. Indicators
3. Oscillators
4. Left Click on Williams %R

When the pop up appears we’ll leave the settings at the default MT4 settings but we’ll change the color to Orange and Period to 9. So, you have Williams %R = 9

Once displayed on your Chart the indicator will display as below:

Basic Concept Behind The System

This is what the system would look like on your chart:

We will cover the rules in the next section below.

Basically, the idea behind this system is to wait until price breaches the outer Bollinger Band. When it does, you are looking for an opportunity to trade back into the band.

The first target is the middle band and the second target would be the other outer band.

When price breaches the outer band, look for the next MACD Histogram line to go the other way. At the same time, the Williams %R should also be ticking the other way.

Once you have confirmation with these two indicators, you may place a trade headed back into the band.

If the histogram is still going in the same direction as the breakout or the %R indicator is ticking the same way, don’t trade.

 

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Rules

Long (Buy) Trade Rules

1. Wait for price to breach the bottom outer Bollinger Band and, once that occurs, look for an opportunity to trade back into the band.
2. Once price has breached the Bollinger Band look for the MACD histogram line to move in the opposite direction.
3. Simultaneously look for the Williams %R to be ticking in the opposite direction also.
4. Once you have confirmation as per rules 3 and 4 then place a trade long (headed back into the Band).
5. Set your Target at the Middle Band.
6. You could open a second Target to be the furthest opposite outer band (In this case you can trade 2 lots if you wish and exit one of them at the middle band whilst letting the other one ride to the second target).
7. Your initial stop loss should be 10 pips below the low of the candle that breached the BB provided it was the one which made the most extreme protrusion from the band.
8. If the histogram is still going in the same direction as the breakout or the %R indicator is ticking the same way, don’t trade.

Note: When you place a trade, make sure that your first target (middle band) is far enough to make a decent profit after covering your spread.

Take a look at the chart below for a visual representation of the rules

Short (Sell) Trade Rules

1. Wait for price to breach the Upper outer Bollinger Band and, once that occurs, look for an opportunity to trade back into the band.
2. Once price has breached the Bollinger Band look for the MACD histogram line to move in the opposite direction.
3. Simultaneously look for the Williams %R to be ticking in the opposite direction also.
4. Once you have confirmation as per rules 3 and 4 then place a trade short (headed back into the Band.
5. Set your Target at the Middle Band.
6. You could open a second Target to be the furthest opposite outer band (in this case You can trade 2 lots if you wish and exit one of them at the middle band whilst letting the other one ride to the second target).
7. Your initial stop loss should be 10 pips above the High of the candle that breached the BB provided it was the one which made the most extreme protrusion from the band.
8. If the histogram is still going in the same direction as the breakout or the %R indicator is ticking the same way, don’t trade.

Note: When you place a trade, make sure that your first target (middle band) is far enough to make a decent profit after covering your spread.

Take a look at the chart below for a visual representation of the rules.

Example Trades

Long Trade example 1

Let me walk you through this Long Trade example. First, I waited for the price to breach through the lower outer Bollinger Band (1). Once that happened, I started monitoring MACD and waited for its histogram to start moving upwards (2). For additional confirmation, I had to make sure that Williams %R was also moving upwards (3). After all conditions were met, I entered the trade at the close of the candle (4). I set my 1st Take Profit Level at the middle Bollinger Band (5) and my 2nd Take Profit Level at the outer, upper Bollinger Band (6). My Stop Loss was set 10 pips below the low of the candle that breached the Bollinger Bands (7).

Short Trade example 1

Let’s now take a look at the Sell Trade example. First, I waited for the price to breach through the upper outer Bollinger Band (1). Once that happened, I started monitoring MACD and waited for its histogram to start moving downwards (2). For additional confirmation, I had to make sure that Williams %R was also moving downwards (3). After all conditions were met, I entered the trade at the close of the candle (4). I set my 1st Take Profit Level at the middle Bollinger Band (5) and my 2nd Take Profit Level at the outer, lower Bollinger Band (6). My Stop Loss was set 10 pips above the high of the candle that breached the Bollinger Bands (7).

Money Management

You have one of two choices here. You can either trade to buy a house or trade to lose your house. If you have no money management plan, you’re trading to lose your house… and possibly a whole lot more. If money management comes first, you’re going to be looking at houses before you know it. Building wealth takes time. Sit down and think about where you want to be in 5 years and start building your account to get there.

The following are important money management principles to take note of:

• Risk only 2-5% risk per trade.
• Always use a stop loss (as indicated in our rules).
• Determine your stop BEFORE you place your trade. The reason we say a “maximum” stop is because if we can get a smaller one, then we use it. The less risk, the better.
• The lot size we use should always be appropriate to the account size we have and the amount we are willing to risk. For example:

If we have a $10,000 account and we only want to risk 2% per trade. The amount we are risking is $200. ($10,000 - 2% = $200)

Divide the amount to risk by the stop loss and you get a lot size of $8 or 0.8 lots. ($200/25 pips max stop loss = $8 or 0.8 lots maximum in the MT4 terminal)

If we have a $600 account, and we want to risk 2% per trade, we would use the same process to find our risk.

$600 - 2% = $12

$12/ 25 pips (max stop loss) = $0.48 or a 0.04 lot size (40 cents)

But, at 5% risk per trade, we would have this instead:

$600 - 5% = $30

$30/25 pips (max stop loss) = $1.20 or a 0.12 lot size

Conclusion

There will be many good trading days, some not so good days, extraordinary days and days that are just plain boring. Sounds a lot like life, doesn’t it?

Follow along the rules from step 1 to the end. Make sure you do not miss checking any step. Take notes of your trades. Take screen shots if you can and segregate your good and bad trades so that you can look back at them and find out what you have done right and what you have done wrong.

We hope you will be profitable trading this system and remember – have fun!

 

[Gatusko]

It really looks lice a nice strategy will back test it! Wich time frame do you suggest

 

[Ssekajoe]

Thank for sharing a very nice tool. I will try it. nice formula.. this Technic for swing or intraday?