Table Of Content

Level 1: THE FIRST BATTLE, Forex Art of War Disclaimer: Forex Art of War and Vance Williams believe that customer should be aware of the risks associated with over-the-counter, spot Forex. Forex trading is highly speculative in nature which can mean currency prices may become extremely volatile. Forex trading is highly leveraged, since low margin deposits normally are required, an extremely high degree of leverage is obtainable in foreign exchange trading. A relatively small market movement will have a proportionately larger impact on the funds you have deposited. You may sustain a total loss of your funds. Since the possibility of losing your entire cash balance does exist, speculation in the Forex market should only be conducted with risk capital you can afford to lose which will not dramatically impact your lifestyle. 1 Copyright 2015, Vance Williams, Forex Art of War, All Rights Reserved www.forexartofwar.com Edition 10.13.15 Level 1: THE FIRST BATTLE, Forex Art of War Personal Note from Vance This book represents the best of 11 years of my Forex trading and coaching. I created this book prior to my retirement so that others would have a path to follow to reach success, efficiently. Of course I’m not actually retiring, just shifting more of my time to my passion, which is human potential and life coaching. While I maintain the copyright on this book, you are welcome to share it with anyone you like. The only thing I ask is that you share the entire book, and not in pieces. So as long as you are sharing the entire book, you are welcome to pass it out as much as you like. Special note: In this book, you will notice references to a community activity which is an important part of skill development. To do this on your own, you will need a forum that enables you to create your own topics and allows you to post pictures of your work. Create a forum which is your name or moniker. Have each of your friends do the same. Then as you all post trades, give each other feedback and follow what I show you in this book. I’ll provide a few more tips in the back of this book. If you don’t have a team, you can check out the tools I created for this purpose at www.forexartofwar.com I wish you the very best on your journey! Vance Williams 2 Copyright 2015, Vance Williams, Forex Art of War, All Rights Reserved www.forexartofwar.com Edition 10.13.15 Level 1: THE FIRST BATTLE, Forex Art of War An Introduction to Level 1 Most traders don't recognize their first battle. But since it is a battle of vision, it must be won. If you are going to win in trading, you have to understand how the game is really played. The Forex culture fosters the belief that “if you have enough information, if you manage your risk well, and if you are disciplined, you will win.” That is absolutely TRUE. But it’s also like telling someone who is overweight “if you eat right and exercise, you will lose weight.” Is that a STRATEGY for losing weight? No. When an objective is truly important, you will take the time to consider everything that can affect your success. Even when you have a good plan, it is a “starting point.” As you put your plan into practice, you discover critically important information about yourself. Such as, you will find it’s better to not go to the store hungry. You might also discover that you continue to eat after you are no longer hungry. Personally, I discovered that even though I won’t jog, I won’t walk, I won’t stretch, I will get beat up for an hour in Muay Thai Kick Boxing. Go figure. When I moved from my former residence and could no longer practice the same discipline, I had to find something else that I “would” do. “Eventually” I discovered that I’ll walk endlessly on the treadmill if the TV is on. Bingo. When I came to Forex trading in 2004, my advantage was my experience with self- discipline. How do I get myself to make good choices? How do I consistently make good choices? If our goal is to lose weight, our greatest difficulty is going to be dealing with “how we feel.” We want something that is not good for us. The same is true with Forex trading. You are going to find out sooner or later that your emotions will prevent you from making money if you don’t have a strategy for making good decisions in spite of your emotions. So this is your first and most important choice. “Do what you feel like doing.” 3 Copyright 2015, Vance Williams, Forex Art of War, All Rights Reserved www.forexartofwar.com Edition 10.13.15 Level 1: THE FIRST BATTLE, Forex Art of War Or… “Learn to make good decisions regardless of the emotions you experience.” I also like to think of this as operating proactively instead of reactively. Can I put off the short term discomfort for the longer term rewards? Those are your two choices. One is easy and results in no profit and the loss of all of your money. The second requires an effort and can enable you to reach your goal. Make the right choice and you move forward. Make the wrong choice, and you end up repeating the same activity over and over again for months or years. This was Einstein’s definition of insanity, but people do it anyway. If you are ready to make the right choice, I wrote this book for you. The Forex "culture" encourages an ineffective vision of Forex trading. This is primarily due to the fact that most information about Forex trading is provided by brokers in one way or another. They are not in the training business. They make money when you trade a live account. I’m not disparaging them. I’m grateful they make retail trading available for just about anyone. But at the same time, the best place to buy a car is probably not from an oil company. They want you to use oil, and have little incentive to make a great car. The bottom line is that if you want to succeed in Forex trading, you absolutely, positively must stop “following,” and think completely for yourself. Get in the habit of “going after the best information possible for making decisions.” The best information is often hidden behind a “symbol,” as you will soon see. 4 Copyright 2015, Vance Williams, Forex Art of War, All Rights Reserved www.forexartofwar.com Edition 10.13.15 Level 1: THE FIRST BATTLE, Forex Art of War Chapter 1: Getting Started If you are a member of my community, be sure to access the sessions I recorded, specifically going over the content in this book. I would encourage you NOT to jump ahead. If you try to run before you learn to walk, you risk being disappointed. Whether you are in my community or part of another, make it a habit to ask a question in your forum anytime you have one. The goal of this first section (level 1) is to provide you with the tools and basic knowledge, so that you can build a solid foundation for high probability trading. This guide is intended to show you the fastest and most efficient way to get started trading the Forex market. I’m not going to explain trading in a traditional sequence. Instead, we are going to get right into the charts, and you can learn as you go. The information is presented in the order it will be used. If you need charts or a trading platform, we provide those for free. We include videos that explain their use. You will find all of this in the member area. Forex Art of War is a holistic strategy for winning that strives to take into account everything that affects your ability to make consistent profit. I consider this first section to be the first level of knowledge, skill, and application. To illustrate: Before you can express an idea in a sentence, you must be able to write the words. To write words you must first learn the letters and basic rules for spelling. For now, just practice the basics. Here are the specific learning goals of Level 1:  Tools such as charts and trading platform  Vocabulary such as PIPs and Stop Loss  Basic trading logic that teaches trends, barrier, entry and exit  Implementing a simple trading plan, setting the trade on auto-pilot and leaving it alone I have been trading and training others for over ten years. I have worked with thousands of aspiring traders, and had the privilege of working with some truly great traders. I love what I do because it is challenging and because I can help people to improve. People who strive 5 Copyright 2015, Vance Williams, Forex Art of War, All Rights Reserved www.forexartofwar.com Edition 10.13.15 Level 1: THE FIRST BATTLE, Forex Art of War to reach further in their life inspire me. It’s why I am transitioning to life coach over the next two years. There are literally tens of thousands of pieces of information you “can” learn about the Forex market. I’m only going to focus on the essential things that you "need" to learn. I believe that you cannot make “more” profit until you learn to make “some” profit. So that is an important principle applied in this book and the subsequent training. Basic Logic As traders, we are anticipating what will happen in the future. How do we do this? There is a simple logic in trading. Logic can be viewed and defined in many ways. I like to keep things simple. When I refer to logic, I’m referring to information from the past that can be used to anticipate what is likely to happen in the future. Human behavior is repetitive. When you look, you see it everywhere. We tend to shop at the same places, and buy the same food. We know when traffic will be congested on our roadways. While I have written extensively on this subject, suffice it to say that not only do we repeat the same behaviors over and over again, we have difficulty changing a behavior even when we make a conscious effort. Just remember your struggle the last time that you set out on a new diet or exercise program. There is a deeper reason for our human frailty. The same mathematical sequence we see everywhere in nature is also in us. That is why we can rely on historical information to anticipate what is “likely” to happen in the future. Grocery stores even set prices based on your behavior. When I talk about repetitive patterns, I’m not just talking about patterns you hear about like trends, head and shoulders, candle patterns, double tops, etc., etc. I’m talking about patterns throughout the entire decision process. We know traders like to trade trends. Where do they like to get in? Where is the best place for you to get in? Where is the best place to put your stop loss and profit target? There are patterns (logic) for all of these decisions. 6 Copyright 2015, Vance Williams, Forex Art of War, All Rights Reserved www.forexartofwar.com Edition 10.13.15 Level 1: THE FIRST BATTLE, Forex Art of War As buyers buy and sellers sell in the Forex market, they create patterns. These patterns show us what traders are doing over and over again. So when we see the pattern next time, we know what is likely to happen again. The Forex I’m going to be brief in my explanations because there is so much that you “don’t need to know.” Forex is short for Foreign Exchange. It’s the largest market in the world, currently at approximately 5 trillion USD a day in volume. I think of money as the life blood of business and the Forex as the circulatory system. It is a network of 1000’s of banks around the world with no central location. No one is in charge. The purpose of the Forex market is to determine a fair price of exchange between two currencies. The price is determined using the principle of supply and demand. If there are more buyers at any given moment, price is moving up. If there are more sellers, price is moving down. What is the Forex to me? A stream of data. That data comes into my software and tells me what price is doing. Trading Software Trading software takes in the data feed about buying and selling around the world and can be used in many different ways. In 2001, platforms became very stable so that we were able to trade from our personal computers. So the industry or retail Forex trading (you and me) is still in its infancy. Brokers or dealers provide most of the data feeds, charting software and trading platforms. These should be free of charge. Most brokers are willing to supply these to you (free of charge) in hopes that you will eventually trade a live account with them. Be sure you only open a practice account, NOT a live account. If you are a member of my community, you will find free software and tutorials there. Do not open a real money account until you “actually” know how to trade. If you open a live account prematurely, even if you intend not to trade it, there is a 90% chance (at least) that you will trade it and that you will lose all of your money. 7 Copyright 2015, Vance Williams, Forex Art of War, All Rights Reserved www.forexartofwar.com Edition 10.13.15 Level 1: THE FIRST BATTLE, Forex Art of War For those of you who are MAC users, you will need to use Windows Parallels or a program like it to take full advantage of the tools available to a Forex trader. I know MAC users don’t like to hear it, but MAC is only 10-12% of the PC market, so those who write software write it for the bigger market first. The good news is that programs work pretty well using Parallels. You can use web based software on MAC but functions will be limited, though adequate. With modern software, you can execute trades directly from your charts. I recommend a desktop trading platform for new traders because it has functions that enable you to learn details you don’t know. Please make a note that some user codes expire every 30 days. So your charts and trading platform will become inaccessible when a code expires. Simply register for a new user code in the free member area once you are a member. Use that new code to login to your charts and trading platform, and you are good to go again. Charts usually display military time as 00:00-23:00. To calculate the time, just subtract 12 hours. So if you see it is the 14:00 candle and you are not familiar with military time, subtract 12 hours and you know that is 2PM. It can be beneficial to set your charts to New York, ET if they are adjustable. This will make it easier for you to read other trader posts, and make it easier for others to review something you share. For example, if a trader writes that they entered the trade at 13:00. This could cause confusion if your charts are set to a different time zone. If you do prefer a different time zone, that's okay, because what I'm showing you will work for any time zone or charts. I recommend Fibonacci retracement tool settings of 23.6, 38.2, 50, 61.8 and 76.4. These are used to measure the natural retracement areas of price waves, and will be important later. You will find instructions regarding in the charting tutorials within the community area. Give yourself time to practice and become familiar with the charts and trading platform. I’m going to give you a specific method (rules) in this guide so that you can practice. This will help you develop proficiency with the tools, a familiarity with the vocabulary we traders use, and you’ll be going through the motions of applying good trading logic. 8 Copyright 2015, Vance Williams, Forex Art of War, All Rights Reserved www.forexartofwar.com Edition 10.13.15 Level 1: THE FIRST BATTLE, Forex Art of War Chapter 2: Market Language There is definitely a vocabulary or language to trading; a few words and terms. I think the fastest way to learn is to begin using the charts and trading platform. You find out quickly what you don’t know or are not sure about. When you come across a word or term you don’t know, just ask or look it up. I’ll briefly define most of the words and terms that are important. Currencies are traded in pairs. So when we trade, we trade a pair such as the EUR/USD. The currency on the left is the “base” currency. The currency on the right is the “quoted” currency. So that means when you look at a EUR/USD chart, you are “seeing” the Euro value move up and down on the chart. The price on the right side of the chart is the USD. So that chart is telling you how much US Dollars it takes to buy one Euro. You don’t really need to know that to trade, though (ha). All you need to know is this: If you buy and price goes up, you make money. If you buy and price goes down, you lose money. If you sell, and price goes down, you make money. If you sell and price goes up, you lose money. Buying or selling is the exact same thing because of the great liquidity in this market. That just means that there are almost always buyers and sellers available. That is very different from stocks where price could be plummeting and you cannot close the trade because there are no buyers. What you need to know is this: buying and selling is the same exact action. This can be confusing for new traders. We understand that if we buy something and the price goes up we make money. If the price goes down, we lose money. But how do we comprehend selling something and the price going up or down and making or losing money? It’s because currencies are traded in pairs. As one goes up in price, the other is going down by exactly that same amount. So imagine you are trading the EUR/USD. If you buy the EUR/USD and it goes up, you make money. Simple enough. But what if you sell it? Think of it this way, if it helps. Selling the EUR/USD is the same thing as buying the USD/EUR. So just change their places, and you are back to buying! Another thing you need to know is that price movement is measure in PIPs. Just think of it as a currency measurement just like quarters, nickels, dimes and cents. Only it is even 9 Copyright 2015, Vance Williams, Forex Art of War, All Rights Reserved www.forexartofwar.com Edition 10.13.15