Making Money Trading Volatility Indices by L Mapfuti Shared by Ultimate
Making Money Trading Volatility Indices by L Mapfuti Shared by Ultimate
Making Money Trading Volatility Indices by L Mapfuti Shared by Ultimate
TRADING GUIDANCE
MAKING MONEY
TRADING VOLATILITY
INDICES
(Founder of BGA FX
Trading Guidance)
This book and its contents remains the property of Blue Gold Aura
FX (L. Mapfuti) and cannot be resold, republished, reproduced,
transmitted or sold in whole or in part, or any form, without the prior
written consent of L. Mapfuti (Blue Gold Aura FX). If you are
interested in the contents and would love to help others gain financial
freedom through this material please feel free to contact me via email
at bluegoldaura@gmail.com
3. Trading carries risks. Volatility Indices are highly volatile and they fall into the
highest risk category on the market. Never trade with money that you are not
prepared to lose.
4. The secrets are a private study of the author and are meant to serve as trading
knowledge for his students. This material has been complied with the assumption
that the trader has a basic and not a beginner’s knowledge of the Forex trading. If
not, one can visit www.babypips.com and any other free trading sites.
5. Forex carries 90% risk and without the right guidance LOSSES can EXCEED
ones capital.
6. We will combine the theory with the practical by making use of your demo
account and thereafter placing trades in a live environment.
7. By reading this guide, you agree that I and my company is not responsible for
the success or failure of your business decisions relating to any information
presented in this guide.
8. Information contained in this product is not an invitation to trade any specific
investments.
-Candlestick Patterns
-Legit Support and Resistance
-Channels
-Stop Bombs
-Supply and Demand (Market Stations)
-Continuation patterns
-Reversal Patterns
-Daily Pivots
INDICATORS
Fibonacci Tool
TDI
CCI
Moving Averages
Copyright © 2019 Blue Gold Aura Fx
Table of Contents
CHAPTER 1: INTRODUCTION.....................................................................................................................11
Before we get started….........................................................................................................................11
CHAPTER2: STRATEGY REVIEW TASKS.......................................................................................................12
1st Practical...........................................................................................................................................12
2nd Practical.........................................................................................................................................12
3rd Practical..........................................................................................................................................12
4th Practical..........................................................................................................................................12
5th Practical..........................................................................................................................................12
6th Practical..........................................................................................................................................12
7th Practical..........................................................................................................................................13
7th Practical..........................................................................................................................................13
8th Practical Exercise............................................................................................................................13
CHAPTER 3: WHAT IS VOLATILITY INDEX...................................................................................................14
CHAPTER 4: OUR PORTIFOLIO...................................................................................................................14
CHAPTER 5: VOLATILITY INDEX TRADING SESSIONS..................................................................................15
CHAPTER 6: WHY WE TRADE VOLATILITY INDICES....................................................................................15
CHAPTER 7: MARKET STRUCTURE: BASIC PURE PRICE ACTION.................................................................16
CANDLESTIC PATTERNS.........................................................................................................................16
LEGITIMATE SUPPORT AND RESISTANCE LEVELS..................................................................................25
CHAPTER 8: THE CORE OF THIS TRADING SYSTEM....................................................................................32
CHAPTER 9: REVERSAL POINTS WITH FIBONACCI.....................................................................................32
FIBONACCI RETRACEMENT SETTINGS...................................................................................................33
APPLYING FIBONACCI ON CHANNELS....................................................................................................42
CHAPTER 10: (SUPPLY AND DEMAND)- MARKET STATIONS......................................................................45
CHAPTER 11: HOW TO DRAW AND TRADE MARKET STATIONS................................................................46
CHAPTER 12: FTR AND FTBS (MINOR MARKET STATIONS)........................................................................48
BULLISH AND BEARISH FTR ZONES........................................................................................................48
FTR - FAIL TO RETURN MARKET STATION..............................................................................................49
AN FTR MARKET STATION AS A CONTINUATION PATTERN...................................................................50
FTB– FAIL TO BREAK FTR MARKET STATION..........................................................................................52
CHAPTER 13: PUTTING FTR, FTB MARKET STATIONS (SUPPLY AND DEMAND) TOGETHER.......................54
CHAPTER 14: BGA (BLUE GOLD AURA) NUMBERS.....................................................................................57
In my trading journey, it has never been easy and smooth. After being introduced
to the subject of trading forex a few years ago, I became so interested and started
looking for a mentor to learn more and more about this subject. I searched around
me to get a mentor but to no avail and as a result I decided to use the cheapest
resource I had “The Internet”. The first day I got introduced to trading forex, I
found myself on my laptop researching on how I could make money trading forex.
I remember sleeping around 3-4am in the morning watching YouTube videos,
reading all trading material I could get my hands on.
I hoped from one trading strategy to another in the hope that I will find the holy grail
of trading and possibly become a millionaire just like everyone else. That is the goal
and mantra for everyone joining the trading community. For me it was a daunting and
exhilarating experience. I remember delving into any trading material I would come
across on the internet, test on demo accounts and would get excited after having a
winning streak. However I would get disappointed after having a series of losing
trades and would hop to the next trading system. I know all of you are very much
interested in my journey and how it ended but that’s not my focus right now.
My main focus right now is to make sure that you understand that I have been
where you are now and I understand the struggle. For some of us it has never been
easy because we did not have direct mentorship and we had to make things work.
As a result of this realization, I have decided to share with you this system and
possibly make it easier for you to learn how to trade and be profitable. As I begin
this book I want all of you to focus on mastering the skill rather than focusing on
the money. If you focus on the skill, no one can take away that investment you
would have given yourself. Always have an investor’s mindset i.e. thinking in the
long term. Blowing accounts is part of the game and the learning process. You
must never give until you become a master.
This book is purely based on my experience trading Volatility Indices and hence
my interpretation of the market is simply customized to trading Volatility Indices.
1st Practical
Identify Pivots (Highs and Lows) of the day on H1 or M15. In addition to that, mark
the Weekly and Monthly periods indicating the High, Low and period open.
2nd Practical
Study the Pivots over a period of 21 days, mark up your charts and try to
understand why and where manipulation or Stop Bombs, OTE 79, 62, 70.5
Fibonacci retracement might happen without placing BGA numbers.
3rd Practical
Study the Pivots over a period of 21 days, mark up your charts and try to
understand why and where manipulation, Stop Bombs, OTE 79, 62 and
70.5 Fibonacci retracement might happen with BGA numbers.
4th Practical
Take your Fibonacci tool go to the last 21 days and mark the charts according to
our strategy understanding why price moved the way it moved and why it reversed
the way it reversed using Support and Resistance as well as Channels
5th Practical
6th Practical
7th Practical
Mark and explain price reversal using TDI, QQE and CCI indicator. [I recommend
that you do it on the M15, H1 and H4 understanding divergence on the TDI].
7th Practical
Go and mark BGA whole and half numbers on D1-H1 (Doing the “Snipping Zone”
identification drill.
Create your own BGA trading plan relating to when you will enter and exit the
market.
OUR PORTFOLIO
WE USE THIS STRATEGY TO TRADE THE
FOLLOWING PAIRS:
Unlike Currencies, Stocks and CFDs etc. which have a window period of trading,
Volatility Indices are traded everyday i.e. 24 hours a day, Monday all the way to
Sunday, 365 days including public holidays. As traders we can use this to our
advantage and this also means that one can do other things during the day and trade
whenever we are free. If you have a side business or full time job you can actually
trade Volatility Indices during your spare time and still make consistent profits.
You are probably wondering why we are so much concerned about trading
Volatility Indices when there is a bucket of other instruments like Forex, Stocks,
and CFDs etc. Yes we trade other instruments but here we just want to exploit the
benefits of trading Volatility Indices.
CANDLESTIC PATTERNS
Before we go any further, we just want to make sure that the trader is familiar with
candlestick patterns. It is of paramount importance to understand that candlestick
patterns will go a long way to help us understand what price is doing. Basically
there are so many candlestick patterns out there but here we are just going to focus
on a few that I have found to be effective when trading Volatility Indices.
1. ENGULFING PATTERN
On this pattern, price just taps the reversal points reverse in one big candle. The
bigger candle closes below or above the small candle (engulfing it) signaling a
change in market sentiment. In essence the second candle would have retraced
more than 100% on Fibonacci retracement breaking the opening price of the
previous candle. The above illustration is a textbook example, below is a chart with
these patterns in real life.
This is a common candlestick pattern when trading Volatility Indices. They are
found everywhere but only relevant at our reversal points we have indicated on the
Engulfing Patterns above. These candles are similar in shape and length and they
RRT PATTERNS
3. DOJI CANDLES
Doji candles are so common when trading Volatility Indices. I am not going to go
deeper about their variations but I am going to show you what they look like. Dojis
are unusually small and very short compared to neighboring candlesticks. Price
usually opens and close near to its opening price. They are normally used to hold
price at a reversal point i.e. extending time at a reversal point before reversal.
DOJI CANDLES
Morning and evening star candles are so common when trading Volatility Indices.
This is a reversal candlestick pattern when interpreted in the right context of the
market i.e. on the places described on the picture below. This is where price holds
a reversal for an extended M15, H1, H4 or D1 before price reverses. It happens
after a series of bullish or bearish candles. The market can retrace 0-20-15% of the
previous candle. You can clearly see this behaviour on smaller timeframes. This
clearly shows that there was zero to no price movement for that period.
The above illustration is a textbook example, below is a chart with these patterns in
real life.
Below is a list of other candlestick patterns to look out for at our reversal areas:
We expect that the trader is familiar with the following candlestick patterns.
5. SPIKE CANDLES
You will see that the market would have retraced up to 60-80 % of the wick [that’s
OTE 0.79 and 62% on the Fibonacci retracement level. If you see such a pattern at
our reversal points, know that reversal is imminent. The above illustration is a
textbook example, below is a chart with these patterns in real life.
SPIKE CANDLES
The above illustration is a textbook example, below is a chart with these patterns in
real life.
As a trader, you must be able to understand one of the most widely used concepts
in trading. During my study, I was able to understand that Volatility Indices respect
support and resistance especially of higher timeframes such as H4, Daily and
Weekly. Below we are going to define what Support and Resistance is together
with real market examples. This chapter is here to give you a basic understanding
of support and resistance and we are going to expose deep secrets about these areas
later. Note that we will look for trades in these areas.
Support: This is the floor of the price and for a support to be valid, you must be
able to track this point 3-5 times from the past data.
Resistance: This is the roof of the price and for a resistance point to be a valid
point, you must be able to track this point 3-5 times from the past data.
NB: When a support zone is broken it becomes a resistance and the opposite is
true for a resistance point.
We are going to treat support and resistance areas as zones rather than a line and
we will explain why in the coming chapters.
Note that this behaviour is very much common when trading Volatility Indices
especially after a big move. We are very much interested in the zones and you will
understand why in the coming chapters.
The concept that says “What used to be support will be resistance or vice versa” is
best illustrated on the chart above and below. You can clearly see that price will
always try to come back and retest a broken support zone. Understanding this
concept will allow us to trade with the trend i.e. buy on a major support and
sell at a major resistance considering that all our conditions are met.
In this chapter, don’t worry much about entries but rather focus on understanding
how to identify and draw these zones. We will show you what we look for when
entering the markets in the coming chapters.
There are so many ways to determine Support and Resistance but here I am
going to use the way I found to be easy.
Whenever you are trading Volatility Indices, there is a behaviour which is going to
fascinate you. Indices like to move in channels i.e. dynamic support and resistance.
If you open your charts right from the M1- W1 you will notice this behaviour.
Price will be making higher highs and higher lows (up trending) or lower highs and
lower lows (down trending). Channels are borrowed from the concept of trend
lines i.e. price will be following parallel trend lines. There are 2 types of dynamic
channels which are:
We can go on and on but I am really sure that we can all see that channels are
everywhere on the Volatility Indices charts. There is also something that is
interesting about these channels because inside these channels there are minor or
small channels especially when you go to small timeframes. Now as an exercise,
go to your charts and start marking these channels, you will see that they are
everywhere.
Like I said earlier, in this section you should not worry much about how we are
going to trade them. We will cover that in the following chapters. I tell you, if you
haven’t enjoyed trading, this time around you will definitely enjoy it.
I know most of you have been introduced to a lot of trading systems and they are
now a part of you. The way we are going to interpret the market might not resonate
well with your thinking but this marks the basis of our trading. I suggest that you
put aside what you have learned especially when trading forex and focus on this
strategy to win.
We trade in a market that is infested with various players and all these players want to
make money. “Winning Guys” i.e. big players own at least 30% of the money
circulating in the trading markets and can influence the market direction at will and as
a result are always winning and hence the term “Winning Guys”. These “Winning
Guys” are also traders and their objective is to also make it like us. By understanding
this, we will have to think like them and win with them. In this book we shall call
them the “Winning Guys”. A very good example of the trading market is that one of
Casino’s, they put in place a lot of facilities for people to bet but the truth is that the
house always wins. Note also that Winning Guys are here to hunt and win. So as you
finish this section, you have agreed to think like the “Winning Guys”. Therefore “IF
YOU CANT LOSE BE THE WINNING GUY.
In this section we are going to talk about Fibonacci retracement and how we use it
to trade Volatility Indices. I am not going to dwell much on the history of
Fibonacci and how it came to be, if you are interested about this subject you can
Google about it. The history is not of paramount importance in our trading right?
Before trading, make sure that you have these Fibonacci Settings.
LEVELS DESCRIPTION
0 Profit Scaling on Retracement
0.5 50% equilibrium (BUY OR SELL)
1 100.1
0.705 %$ - OTE – 70.5
0.79 %$ - 79 Percent
-0.62 Target 2
-0.27 0.27
-1 Symmetrical Price
-2 Symmetrical Price 2
-3 Symmetrical Price 3
Figure 21: Fibonacci Settings
Notice how price pinned exactly at our golden numbers. Do you recognize that
candlestick pattern, if so you must be smiling right now? We are the “Winning
Team” and therefore we 80% of the time know exactly where price reverses.
Below is another example of how we apply Fibonacci on a Bullish Reversal.
Notice that price pinned and retraced at an OTE level and closed below it. This is a
very good sign that price is about to continue with the trend. As a trader that’s
where you join the trend. Below is an illustration of the same chart on a line chart.
REVERSAL AT OTE
OUR GOLDERN
NUMBERS. Notice
that the line chart
tapped exactly at the
OTE (70.5)
Figure 27: Notice why we focus much on candle close rather than wicks to draw our Fibonacci levels.
Below are more examples of this concept with entry and exit rules.
Figure 30: Check how price reversed at 62 golden retracement level, came back to retest it
Figure 32: Price failed to reverse at OTE but instead reversed at 100.1 level
Note that the secret here is that: In an uptrend we buy the deeps and do not sell
the peaks. Inversely in a downtrend sell the peaks do not buy the deeps
(troughs). To use the Fibonacci tool effectively, one needs to understand the
daily or weekly bias.
Below are examples of channel charts illustrating where we look for OTE 70.5,
62%, and 79% Fibonacci retracement levels.
This is a very important and key concepts when trading the markets. This is the
heart of every market because for every market to function there has to be some
goods and services on offer [supply] and people who are willing and able buy them
[demand]. Winning Guys trade daily, weekly, monthly, and yearly, because of this
reason, they plan to take trades before other traders get in the market.
They have the ability to do this because they have enough resources to do so. As an
example, if Tesla releases a new car those guys who are moneyed will get it first
before the public. By the time the public affords to buy it, the rich guys will be
looking for the next model. When you look at the charts carefully, there are areas
where price previously tapped and reversed aggressively. To the traders out there,
these are support and resistance areas. However to the Winning Guys, these are
Market Stations where they order and hence the term “Market Stations” -
“Winning Guys” see money whenever they see these areas”. For one to trade and
make money consistently, you must be able to understand what happens in these
areas. Remember that:
Supply Zone: This is where sellers are willing to sell and buyers are trapped
through price manipulation before the market moves down.
Demand Zone: This is where buyers are willing to buy and sellers are trapped
through price manipulation before the market moves up.
Below is an illustration of how one can mark and draw a Supply or Demand zone.
You have to first of all identify a point where price moved aggressively and then
cover the reversal previous candle’s body.
The general rule for trading these Market Stations is to wait for price to come
back to retest the zone. If it is not violated or broken you buy or sell on the
first candle that closes above or below the zone and place your stop loss
behind the zone. This becomes your supply or demand zone as indicated below.
MARKET STATION
Figure 41: Notice that price made an aggressive move before coming to retest.
Figure 42: Notice that price made an aggressive move before coming to retest.
In the markets we have potential reversal points and Winning Guys usually leave their
orders here and that’s where you expect the highest level of price manipulation.
Winning Guys know where retail traders put their orders and expect to take trades and
so they target these places to make money out of you through Stop Bombs.
An FTR Market Station is when price tries to reverse but there is no enough
momentum to push price in the opposite direction and this usually happens in a
single reversal candle or a few candles. For example, the illustration above shows
that price was bullish but price tried to push down but failed. This is usually caused
The rule of an FTR Market Station is that you cover the last reversal candles
body and mark it as an FTR Market Station. Note that you have to wait for price
to come back to this station to test it for an entry. If price breaks the station i.e.
candle closes below the FTR Market Station, then it is violated. For an entry, wait for
price to come and retest the station and allow a candle to close above it and enter- you
can put your stop loss below the station. Below is an example of an FTR Market
Station in real life. Note that the opposite is true for a Bearish FTR station.
On this one, price tries to reverse but there is no enough momentum to push price in
the opposite direction and this reversal candle. The next candle engulfs the reversal
candle and closes above it showing you that the trend is still going up or down. If this
happens, we will look for entries i.e. they happen at right place and at the right time. If
you visit smaller timeframes when this happens you will find out that this reversal
candle full filled our golden Fibonacci numbers i.e. 62, OTE 75 and 79%.
Always avoid entering a trade close to reversal points which will be discussed
in the following sections. Below are examples of this continuation pattern in real
life.
From the above charts, we can clearly witness that these patterns are everywhere
and can pay you big time when traded in the right way. I want you to note that
these patterns are actually 62, 70.5 OTE (Optimal Entry) to 79% Fibonacci
retracement points on lower timeframes. We will discuss more about the OTE and
other components that we will consider when taking these trades.
This is when price comes to test the FTR zone but fails to break it. This usually
becomes a powerful future reversal zone. And again, just like you trade the FTR,
you wait for price to come and retest the FTB zone and enter on the candle that
closes above it if the zone is not violated.
Important Note: This is an FTR Market Station that is retested again without
being violated. Notice also that in these zones. Winning Guys have a tendency of
leaving orders and taking partial profits in these stations. So always take note of
such stations and take advantage of them buy trading with the Winning Guys. It is
very important to go in your charts, study these patterns and write notes-
(Remember “The key to mastery is practice”).
Below are marked charts of FTR Market Stations, FTB Market Stations, and
(Supply and Demand) zones. When you do an exercise of marking your charts, you
must be able to spot these Market Stations without any challenge and that will give
you an advantage when trading.
Remember our main goal here is to make sure that we understand why the market
moves the way it moves and trade with the Winning Guys.
MINOR STATION
MARKET STATION
MARKET STATION
FTR STATION
MARKET STATION
MARKET STATION
MARKET STATION
MARKET STATION
Trading should be interesting and less stressful. If you always find yourself
stressing when trading then you should be in a position to understand that you are
doing it all wrong. There is a lot of information circulating out there and some of it
is sponsored by these so called Winning Guys to make retail traders lose and get
more confused. Ignorance of traders, fear and greed are some of the tools that the
Winning Guys use to get money from traders like you and me.
This chapter is going to make you enjoy trading, if not make you scream or jump
out of your bed. Since we all understand that the market is moved by the Winning
Guys, it’s much more interesting to note that they don’t just go for shopping
anywhere. They have specific areas that they place their orders and it’s not
everywhere that they do this.
The markets always respect whole numbers i.e. $1. 25, $1.50, $1.50, $1.75 and
$2.00. If you go can and check your charts you will see that price always reverse in
these areas. Price will always make support and resistance in these areas. The retail
community doesn’t understand what’s behind what they are trading. Notice also that
EAs or robots used by Winning Guys are usually coded with these whole numbers.
Winning Guys like place their orders as well as manipulate price in these areas.
So to give room for price manipulation represented by spikes, we have rounded off
the figures to 0.20, 0.50, 0.80 and .00. (This is a concept which me and my partner
So in this exercise we will call the 0.20- BGA Q1, 0.50 BGA HALF, 0.80 BGA Q2
and .00 BGA WHOLE numbers. Note that these estimations are based on
Fibonacci personal application on retracement areas.
BGA Q1= 20% of a range between 2 whole numbers, BGA HALF= 50% of a
range, BGA Q2= 80% of a range and lastly BGA WHOLE= 100%. As an
example, the range between $3 and $4 will be $3.20, $3.50, $3.80 and $4.00
When trading Volatility Indices, you will notice that that these ranges are too big
as compared to currencies. However, we use the same concept of 1 BGA 1 whole
number to the next e.g. 170000.0000 to 180000.0000 we have 172000.0000,
175000.0000, 178000.0000 and 180000.0000.
NB: We always treat these BGA numbers as zones to cater for price
manipulation indicated by candle wicks (62, OTE 70.5 and 79 Fibonacci
Retracement).
Below is an example, notice how the market respects these BGA numbers.
Settings: BGA WHOLE- RED, BGA Q1- GREY, BGA HALF- BLUE
and BGA Q2- GREY
Here we are going to do an exercise that is very interesting. We will use BGA
Whole and BGA Half for this exercise. E.g. If price is being pegged let’s say in
thousands, we will divide the range into 2 e.g. 2000, 2500 and 3000.
Make sure you mark the BGA whole in red and BGA half in blue on a daily
timeframe. The main goal of this exercise is to make sure that we mark major
reversal points for the purpose of getting the directional bias and entries.
Step 3: Check to the left side to see if price has bounced off that area before. If
price did bounce for at least 3 times then that’s a good area.
Step 4: On H1 timeframe, Mark the BGA Q1 (20) and BGA Q2 (80) number from
your BGA whole or BGA half that you would have marked on your daily. Mark
this as your potential reversal zone. We shall call this zone the “Snipping Zone”.
Note that price can sometimes tap and reverse at a BGA whole or Half on D1
without extending a Stop Bomb inside the “Snipping Zone”.
Step 5: Look for reversal patterns, Fibonacci Golden entries and candlestick
patterns in the zone
Step 6: If you see reversal pattern in the “Snipping Zone”, bull or sell without
hesitation
Step 7: Make sure that you are buying and selling with the trend
Step 8: If you see that the “Snipping Zone” has been violated (i.e. you see a large
candle closing above or below it, scratch the trade.
Note that you will be holding your trade from BGA number to a BGA number
on the daily. You will only exit at the next BGA number when a reversal
signal fires.
Note that major support and resistance respect these numbers. If price breaks a
number, it will go to the next number. Notice also that price makes reversal
patterns on these numbers and zones. Now we will go to H4 timeframe.
Remember patterns are only relevant when interpreted in the right context of the
market. Below is a list of reversal pattern behaviors’.
This is a type of an M seen on Volatility charts. The first leg of the M is short and
the 2nd leg is very long. This is done to entice long traders to take long positions by
the Winning Guys. As soon as the bait is taken, breaks are applied and price is
reversed very fast. Price will be showing higher highs and on the TDI, the RSI
price line will be showing lower highs and in most cases price would have been
contained back in the volatility bands. This is called Divergence in the trading
circles and hence the name “M Dive”.
This is a type of a W seen on Volatility charts. The first leg of the W is short and
the 2nd leg is very long. This is done to entice long traders to take short positions
by Winning Guys. As soon as the bait is taken, breaks are applied and price is
reversed very fast. Price will be showing lower lows and on the TDI, the RSI price
line will be showing higher lows and in most cases price would have been
contained back in the volatility bands. This is called Divergence in the trading
circles and hence the name “W Dive”.
JET HOOK
This is another variation of price reversal pattern. Price will shoot in an inclined angle
very fast, induce and reverse without giving people a proper signal to enter. If you
take a look at the pattern, it literally looks like a jet and hence “JET HOOK”.
Before trading the markets, one must understand what price usually do at reversal
points. In some circles these patterns are called double tops and bottoms. These are
psychological patterns in the markets. Remember that in the previous chapters we
have talked about the Winning Guys.
Note that this can happen anytime especially at a reversal point e.g. that’s OTE
70.5%, 79 and 62%. Price is usually held in a range, at a Market Station or
consolidating for some time and this usually happen when the market wants to
make a big move. Price will be moving up and down testing the previous highs and
lows as well as Pivots and Market Stations. The Winning Guys as I have stated
before, does this to make money.
On the M pattern above, note that price was ranging between the previous highs/
Market Stations. Price then broke out of the range to form an M Pattern.
Even though the second leg of the M came to test the first high of the M, the candle
closed below the first highs candle.
FTR
This is an M pattern variation. Price was pushing up. After stopping at a reversal
point, price made an M pattern before running away with the money. Notice that
the 2nd legs candle closed below the first Ms High. The 2 nd leg retraced beyond the
62, OTE 70.5 and 79 Fibonacci retracement levels.
FTR
FTR M STATION
This W pattern is actually similar to the first M pattern chart. Price broke out of the
range to pitch a W Pattern below. Notice also that the 2 nd legs tapped below with a
wick but closed above the first legs low. If you go through your charts you will see
this behavior happening over and over again.
Buy understanding this we are able to capitalize on this and make consistent profits.
As a trader you must be aware of the following Pivots.
On each and every day i.e. price always moves to create High and Low (Pivots) of
the day. Winning Guys have a tendency of enticing traders to take trades in false
direction from the daily open price line. From the daily open price line, price can
go to test the previous day’s high, low or open. These areas usually coincide with
the BGA numbers as well as Support and Resistance, FTR and FTB (Market
Stations). Below is an illustration of how you mark the daily open line, daily high
and daily low.
Now that we understand what happens during a day, we are able to apply the same
concept to the weekly and monthly high and low. The same price manipulation
happens on the weekly high/low, monthly high/low and yearly high/low.
Now that we understand how the markets move and potential price reversal points,
we now need to establish the market sentiment. For us to do this we have modified
the TDI (Traders Dynamic Index).
The core indicator in TDI is the RSI. We use the TDI to:
In order to understand TDI, you must understand its underlying indicator RSI
(Relative Strength Indicator). RSI is based on candle close and won’t fall for
spikes. Excellent for confirming shift in momentum. TDI is also excellent for
spotting divergence.
RSI Line: Period- 14 Typical Price (HLC/3) Colour Red Apply to: Close
LEVEL DESCRIPTION
20 Extreme oversold level
32 Buy
50 Midpoint
68 Sell
80 Extreme oversold level
Figure 90: RSI Settings
VOLATILITY BANDS:
For volatility we use Bollinger Bands and the settings are as follows:
Period: 34 Deviation: 1.619 Style: Blue Apply to: First Indicators Data
TDI EXPLANATION:
Market Baseline:
The yellow line is the dynamic moving market baseline. [Standing as the liquid or
moving 50 market baseline]. When the dynamic market baseline crosses with the
signal line, it’s a trend change confirmation and you can also enter into a trade.
VOLATILITY BANDS:
They are similar to Bollinger bands. They act as support or resistance based on
the close, much stronger. The bands of the Bollinger bands are support and
resistance and therefore:
When price breaks out of the bands, it’s a sign of momentum shift and a
breakout
If price breaks and comes back inside the bands, you can sell or buy and add
when price line crosses the MBL.
When the bands contain the RSI line after a Break, It is Divergent (Stop
Hunt).
When viewed in a proper context, they can identify Stop Bombs, Scale Ins
and Exits.
Note that when the MBL is above trending above the 50 fixed RSI level,
the market will be in an uptrend and the opposite is true for a bearish
market. line.
Figure 91: Notice that when price is in a downtrend, the MBL is below the 50 fixed RSI line.
When the MBL is above the 50 RSI always look for buys and the opposite is true
for a bearish market.
QQE INDICATOR
We also use the QQE indicator in this BGA Strategy for signal confirmation
and entries. We shall provide the settings when one has acquired this strategy.
If you notice at a reversal point that price has extended beyond the 100% Fibonacci
retracement, you should check the TDI to see it’s a true breakout. If you see that
what’s happening on your charts is opposing what’s happening on the TDI (that’s a
fake out), get ready to pull the trigger because the market is about to reverse.
This is the core of this trading strategy. All other tools like indicators are designed
to complement this core system. Remember when you place a trade here; you trade
from zone to zone or swing to swing. Expect to hold a trade for hours or days if it
permits you to.
1. Analysis is carried out of the DI, H4, H1 and M15 timeframe and
entries are placed on M15. It’s also good to look at the bigger picture
i.e. D1 and W1
2. The first question to ask yourself where the current price is- (apply your
Support and Resistance)?
3. Mark up BGA numbers i.e. above and below price?
4. What is the trend? (UPTREND OR DOWNTREND) you can see that by
looking at price or looking at the TDI MBL (Market Baseline) position.
5. Which areas might cause price to reverse i.e. BGA NUMBERS,
MARKET STATIONS, FTRS, FTBS, DAY HIGH-LOW or DAILY
MARKET STATION
MARKET STATION
MARKET STATION
MARKET STATION
MARKET STATION
MARKET STATION
MARKET STATION
MARKET STATION
From my study and during the strategy testing process, I discovered that most of my
students struggled to get perfect entries after spotting a reversal point whilst learning.
Remember that trading is a skill which is comes with “Hard work, Desire,
Determination and the Will to Win”. I added a CCI (Commodity Channel Index)
indicator with customized settings to make life much easier for a newbie. For those
that struggle to use the TDI, this can help you spot trades whilst you are learning.
Note that indicators are lagging and hence should be used as part of your trading
tool box. We have made this chapter especially for newbies and those struggling
to identify patterns, entry confirmations etc. remember I don’t want you to dwell
much on indicators as they lag- I want you to master our key reversal tools i.e.
high low of the day, Daily Opening, BGA Patterns, Fibonacci points, BGA
Numbers etc. Below is a plain chart with BGA numbers only.
1. When CCI price line crosses the 0 and is above 70.5 line, BUY at
a reversal point.
2. When CCI price line crosses the 0 and is below -70.5 line, SELL at
a reversal point.
Below we are going to explain to you how we are going to explain how we use the
CCI on a real chart combining everything we have learned in this book. Note
MARKET STATION
From the chart above price has been falling for 2 days on the left. We are anticipating
that price has to reverse and give a long position. Notice that price stopped and gave
us a spike gang at 2400.00 BGA whole number. Now that we have an idea of what
price is likely to do, we are now looking for an entry to go long.
Here is where our TDI and CCI come into play, but here we are going to concentrate
on the CCI and 8SMA. For now let’s ignore the TDI and QQE indicator. If you have
understood the concepts in the previous chapters notice how price has been pushed
down to entice sellers to jump in before putting breaks at the 2400.00 point.
Now that our chart is ready and we have established that we are looking to go long,
we now need to get our entry using CCI. Remember that:
1. When CCI price line crosses the 0 and is above 70.5 line, BUY at
a reversal point.
2. When CCI price line crosses the 0 and is below -70.5 line, SELL at
a reversal point.
It is always important to enter trades with all tools on your side. In as much as we
might be accurate most of the time, there are time where price might choose to do
something else. In such moments, we want to make sure that we minimize losing
trades and maximize on our winning trades. One might be wondering why we have
explained a lot of concepts in the previous chapters when entering a position is this
simple. Notice that with all those tools, you are able to understand what is
happening with price and then enter a position. Like I said, the goal is to give you a
tool box that will give you a signal with at least 3 powerful confirmations.
NOTICE CHANNEL
AND 62, OTE 70.5
and 79 FIBONACCI
ENTRIES
FTR ZONE
STATION
FTR
Now that we have explained every concept, it’s now time to put everything
together. Like what I have indicated in the previous sections that we will make our
trading simple and interesting with our special tool box. In this section we are
going to do a BUY and SELL SETUP applying all our concepts.
Below is a plain chart we are going to use as our case study for a BUY setup. Note
that the highlighted as our current day. (1 Period is equivalent to 24 hours or 1
Day).
REMEMBER THAT OUR NUMBERS ARE: 0.20- BGA Q1, 0.50 BGA
HALF, 0.80 BGA Q2 AND .00 BGA WHOLE NUMBERS.
BGA Q1= 20% of a range between 2 whole numbers, BGA HALF= 50% of
a range, BGA Q2= 80% of a range and lastly BGA WHOLE= 100%.
Colour Settings are as follows: BGA WHOLE- RED, BGA Q1- GREY, BGA
HALF- BLUE and BGA Q2- GREY.
Now go to your charts and start marking BGA numbers close to price i.e. above
and below price. For a start you can use BGA WHOLE and BGA HALF then fine
tune with Q1 and Q2 when price is so close. We are going to mark our case study
chart. Start with BGA whole numbers as follows:
If you don’t know how to edit the horizontal lines you can Google about that.
From the chart above we can see that price has been on a downtrend on the left i.e.
making Lower Highs and Lower Lows. For those that prefer the TDI, see below
that the TDI Market Baseline is below the 50 RSI line signaling downtrend.
Check if the previous day’s High or Low is close to your price to determine if it’s
going to affect our entries or trade. From our case study chart, note that previous
day’s High and Low coincide with BGA numbers.
Notice how price made a W pattern with a 6 Gang pattern inside the W. By looking
at this, we can tell that price is about to reverse. Note also that this happened at a
BGA whole number.
Here is how you get buy entries combining all the tools I have shown you. On how
to manage your trade, you can visit the Money Management and Risk
Management section.
To add to your positions, you can use FIBONACCI numbers. You wait for price
to finish an impulse move and come back or start retracing for entries as shown
below.
Notice how I have applied the FIBONACCI tool to add positions and know if
the retracement has ended. (I have BGA Number, Fibonacci Number and CCI
as my entry tools. This will give you a high probability trade with little or no
drawdown. From the chart we can see more swings and areas to add positions,
Below is a plain chart we are going to use as our case study for a SELL setup. Note
that the highlighted as our current day. (1 Period is equivalent to 24 hours or 1 Day).
BGA Q1= 20% of a range between 2 whole numbers, BGA HALF= 50% of
a range, BGA Q2= 80% of a range and lastly BGA WHOLE= 100%.
Colour Settings are as follows: BGA WHOLE- RED, BGA Q1- GREY, BGA
HALF- BLUE and BGA Q2- GREY.
Now go to your charts and start making BGA numbers close to price i.e. above
and below price. For a start you can use BGA WHOLE and BGA HALF then fine
tune with Q1 and Q2 when price is so close. We are going to mark our case study
chart. Start with BGA whole numbers as follows:
If you don’t know how to edit the horizontal lines you can Google about that.
From the chart above we can see that price has been on an uptrend on the left i.e.
making Higher Highs and Higher Lows. For those that prefer the TDI, see below
that the TDI Market Baseline is above the 50 RSI line signaling uptrend.
Figure 127: MBL below 50 signaling that the market has been buying
Check if the previous day’s High or Low is close to your price to determine if it’s
going to affect our entries or trade. From our case study chart, note that price came
back to test the previous days high.
3150
Notice how price made an M pattern at a 3150.00 BGA number. By looking at this,
we can tell that price is about to reverse.
Here is how you get sell entries combining all the tools I have shown you. On how
to manage your trade, you can visit the Money Management and Risk
Management section.
To add to your positions, you can use FIBONACCI numbers. You wait for price
to finish an impulse move and come back or start retracing for entries as shown
below.
Notice how I have applied the FIBONACCI tool to add positions and know if
the retracement has ended. (I have BGA Number, Fibonacci Number and CCI
as my entry tools. This will give you a high probability trade with little or no
drawdown.
For one to be able to have the trading system when mobile, we have provided the
following settings for your MT5 mobile phone platform.
Figure 134: Tap f+ on the MAIN CHART tab and select moving average
Figure 135: Tap f+ on the Indicators Window tab and select RSI- Copy the above settings.
Figure 136: Tap f+ on the Indicators Window tab and select Bollinger Bands- Copy the above settings.
Figure 138: Mobile phone MT5 chart setup with our Fibonacci tool
CCI SETTINGS
Now that you know how to add indicators, we will just give you values for our
customized CCI indicators.
Parameters:
Levels:
LEVEL DESCRIPTION
70.5 Buy when price is above
-70.5 Sell when price is below
0 Sell or Buy with Trend on cross
Figure 139: CCI Indicator Settings
When you are done with setting up, your chart should look like the chart below.
This is an area that differentiates successful and unsuccessful traders. Many have
failed in this game simply because they want to be rich in a short space of time.
Remember that your account is your asset and therefore treat it as an egg. There is
no need to rush the process- Rome was not built in one day and therefore it cannot
be destroyed in one day. Similarly grapes must be crushed to make wine. Olives
are pressed to release oil. Diamonds come from great heat and pressure. What I am
trying to say here is that you are powerful when you trust the process.
I advise that whilst you learn, never risk more than 2 % of your account per
trade. Never take a trade that has a risk to reward ratio that is less than 1:3. Do
not open many trades on a single pair. Volatility indices are more volatile and unlike
currencies, they can wipe your account in a flash if you don’t treat this seriously.
Risk in trading is defined as what % of our account balance would be lost if our
trade went to Stop Loss.
Mastering entries can allow one to trade with a PURE 3:1 Risk to Reward
Ratio. Meaning one can lose three trades in a row and still have enough
margin to come back and negate the loss with just one trade.
NB: After we take a STOP OUT, we come out with the same SL and lot size until
we negate the loss. If you lose 4 times, re-calculate your LOT size using the
account balance.
1. Moving your stop loss after you have placed it- allow price to move at least 2
times your stop loss distance before moving to break even.
2. Putting on multiple positions that add up to your % risk. If you want to do that,
divide all the positions into your single risk LOT SIZE.
5. Not having HARD Stop Losses and Take Profits WITH THE BROKER. Never
try it when trading Volatility Index. If you don’t put a Stop Loss, when will price
hit if the market goes against you- nowhere right.
If you have made it to this point, I just want to say Congratulations! I have poured
my heart out and have equipped you with the BGA FX Volatility Indices system
which I am so confident about. THE MAIN GOAL HERE IS TO PRODUCE
SELF-SUSTAINING TRADERS WHO DON’T RELY ON SIGNALS. I know
this information might be overwhelming and could actually be different from what
you have learned before, but you now have it and its time for you apply it into your
trading and be profitable. I WISH YOU NOTHING BUT THE BEST.
Below are a few thoughts I would like to share with you before I round this up.
Rome wasn’t built in a day and Rome wasn’t destroyed in one day either. Diamonds
as precious and glittering as they are, are a result of great heat and pressure. You see,
trading and making money can be a daunting task to some and very exciting to some.
However like any other profession you might want to invest your time into, you have
to put in the work, trust the process and do away with fear. Most degree graduates
spent up to 8 years in college studying. What about a new trader mastering a skill that
could give him financial freedom for life? Don’t think about the money just yet. Just
focus on doing the right things and mastering what you have been taught. I know
some of you have seen the flashy cars, houses, expensive staff that successful traders
have. To be honest with you, you can achieve all those things if you are patient and
carry the investor’s mindset in you. Trading is not a get rich quick scheme, if you treat
it like a business you will definitely eat like a king in the long term. There are
There is absolutely no reason why you should jump into trading with live money
before mastering the trading skill. However when trading a demo account, treat it
as if you are trading with real money. Never shy away from asking for help when
you need it. People like myself are happy to assist people like you.
REMEMBER: “It’s not whether you are right or wrong that’s important but
how much money you make when you’re right and how much money you lose
when you’re wrong”- George Soros
If you want to open a live Volatility Indices trading account and get paid while
trading, you may need to: check this out and open a live forex account through them.
If and when you are having great success using my strategy, I would really love to
hear from you on how you are doing. Please send me an email and tell me about
your success.
L. Mapfuti founder of Blue Gold Aura FX (Private Fx Trader & Educator), is the
creator and moderator of this strategy. After a long struggle of seeking Financial
Freedom in the journey of trading, L. Mapfuti decided to share this strategy to
people who are looking for consistency in the markets. He decided to share his
years of experience studying the markets. This strategy together with the advices
shared will not make you rich but will surely change your perception of the
markets. This strategy was made available to create a rare group of traders who are
self-sustainable i.e. traders who don’t rely on signals from others to make money.
Thanks to:
Editor: K. T. Subeli.
To start Volatility Index Trading you need to create an Account With The Classic
Binary .com Platform Or The New Deriv .app D-MT5 Platform
Open a Synthetic Index Market Account To Be able to Access The markets.
Watch Live Trading Tutorial on how To Open Your MT5Volatility Index Account.
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Join Our Telegram Channel To Get Access To More Free Trading strategies 100% Free
This Strategy Has Been Shared By Ultimate Trading Tools
Where You Learn & Remove The L In Learn Later.
Patience Is Key to Financial Freedom