The essence of the mistake made by classicists of Forex and the technique of determining the basic rules, according to which the trader should work under in case of appearance (issue) of news.

In its essence, the principal mistake made by those classicists who give the fundamental analysis to Forex consists in the following. There is detected (found out) no correlation between the fundamental and technical analyses of Forex. That is, any of the analysts hasn’t combined the fundamental-, wave- and technical analyses of ally currency pair movement, divergence, medium- and long-term trends, currency indexes, etc. It looks like the fundamental and technical analyses of Forex “live lives of their own” separately. Surely, if both the techniques of the fundamental and technical analyses are correct, they must intersect and supplement one another.

Only in Masterforex-V Trading System the fundamental and technical analyses are combined and presented as a whole. Thus, one gets marvelously simple, understandable (clear) and reliable rules, according to which the trader should work in the case of appearance (issue) of news. Any classicist of Forex hasn’t developed anything analogous. Our technique is unique.

Below there are partly revealed the rules according to which the trader should work with the news. The total (complete) course is available (submitted) in Masterforex-V Academy. Besides, one can also take part in the daily training (during a year or two). There it’s explained how to apply the theory to the current trading at Forex and how to make the business plan for the current trading session. One can also find the analysis to the tactical solutions and on-line prompts by traders of experience. In addition, there are available answers to novices’ questions concerning the current trading. One can also find calculations of the session trend movement goals (short- and long-term deals, wave analysis of the market and the corrections to it). Masterforex-V Academy chairs  submit prompts from Murray’s viewpoints, with respect to channels, fibo, wave analysis, dislocation of the order accumulation at the real stock-exchange market, options, currency indexes, ally currencies, etc. All of these services are available everyday.

There are the basic rules of the work with news according to Masterforex-V Trading System

1. The issue (publication) of news is nothing else but an occasion (cause) for “driving” currency upwards-downwards at the controllable market of forex.
2. If the issue (publication) of news where the difference in the index is either better or worse than the prognostication has indicated, the currency pair movement is obligatory developing according to the technique developed by the classicists.  

The issue (publication) of news

·       If news is better than the prognostication, the currency spurts upwards.

·       If news is worse than the prognostication, the currency spurts downwards.

Comments by Masterforex-V Trading System

Let’s examine what classicists of forex don’t write about and what is the trader’s principal mistake in working with the news.

The currency pair reaction to the issue of news can be different.

·       Either the previous trend pulse wave,

·       Or the wave correction of the previous trend,

·       Or a new trend wave.

For instance, on May 10, 2007 the rate of exchange of GBP with respect to USD has increased by 0.25%. As the result, the cost of GBP has risen from 1.9848 up to 1.9908.

Below we submit the comments, given by Dow Jones agency - the adherents (followers) of the fundamental analysis of forex - after the issue of news and slump in the price of GBP.  

Below the following quotation is submitted - see Dow Jones agency comments on May 10. In practice, GBP is being traded almost without changes. This situation has developed when Bank of England Committee for the monetary-credit (back-up) policy has decided to heighten (rise) the interest rate by 25 basic points – up to 5.5% - as it should be already expected. As traders said, the market to a certain degree was disappointed because Bank of England didn’t raise the interest rate by 50 basic points. Notwithstanding this fact, the contiguous data statements (dictums) made by Bank of England rather clearly indicate the following. It’s most likely that again Bank of England will heighten the interest rate by 25 basic points in June. At present GBP/USD pair is being traded by 1.9985 against 1.9880. This is going on before the announcement of the solution concerning the interest rate.

After the fall of GBP, analysts – via the statement made by an unanimous so-called “trader”, unknown to anybody – have decided to soothe those traders all over the world who have already opened deals on “buy” when dealing with GBP/USD pair movement.

There is another quotation.

They say at the market that there are no reasons to sell GBP.

Again, see Dow Jones agency statement issued on May 10. There are no reasons to sell GBP at all. Really, one must take into account the heightening attractiveness of GBP in gambling on the difference between the interest rates after their raise (heightening) on Thursday when Bank of England has raised interest rates by 25 basic points. Besides, there is high probability that these rates could increase in next months – this is stated by a trader from one of British Banks. According to this trader, now the price of GBP will gradually start to increase – up to $2.00. Probably, GBP can even culminate new maximums that exceed the value of 2.0130 on Friday or at the beginning of the next week. At present GBP/USD-pair is being traded for 1.9895 – to compare, the daily minimum makes 1.9851.

I hope that the reader can guess the further development of the events. GBP has fallen down again!

Chart GBP/USD

3. The basic gauge (indicator) of the currency pair movement intensity after the issue of news – i.e., whether this movement is intensive or not – is not the published information itself but the technical analysis that must be given to forex market.

There is the example #1 of GBP/USD pair movement in the timeframe H4.  May 4, 2006, 14:13, Britain: Bank of England has left the interest rate at the same (previous) rate – 4.5%. As the result, one has got an increase in GBP price more than by 600 points in 1/5 of a week – from 1.8334 and up to 1.8998 points (see Chart GBP/USD pair movement in the timeframe H4).

 There is one more example #2 of GBP/USD pair movement in the timeframe H4. On April 6, 2006, Bank of England has left the interest rate at the same (previous) rate – 4.5%. However, during several days GBP has fallen in price from 1.7580 down to 1.7374 points. After this, an intensive “bull” trend has started – up to 1.8998 (by 1600 points).

 One can see the corresponding example of GBP/USD pair movement in the timeframe H4.

  There is the example #3 of GBP/USD pair movement in the timeframe H4. The day of August 3, 2006 has really become the celebration for all analysts-economists! That is, the results of the technical analysis have coincided with the news that has indicated a raise in the interest rate, initiated by Bank of England. The interest rate has been heightened by 0.25 of pct – up to 5%. GBP rate has increased by 430 points – from 1.8694 up to 1.9127.

One can see the following chart in the timeframe H4.

There is the example #4 of GBP/USD pair movement in the timeframe H4. On April 18, 2007 at 12:04 Bank of England Committee on the monetary and credit policy has decided to keep (reserve) the interest rates on the level 5.25%. As the result, the “bear” trend has deceased by 450 points – from 2.0133 down to 1.9676.

One can examine the corresponding chart in the timeframe H4.

There is the example #5 of GBP/USD pair movement in the timeframe H4. On May 10, 2007 Bank of England has decided to heighten the interest rate by 25 pct – up to 5.5%. As the result, in the 1/5 week GBP rate has fallen more than by 240 points – from 1.9908 down to 1.9676.

One can see the corresponding chart in the timeframe H4.

 Below there are comments submitted by Masterforex-V.

1. One can give a multitude of the analogous examples. However, the essence is the same. That is, the vectors of news and trend can either coincide - or not - with the equal probability. That is, it can be a splash (burst) by 100-200 points within the trading session. At the same time, it can be just correction by 20-30 points, after which the trend can reverse by 100-200 points in the backward direction.
2. Any classicist of forex hasn’t detected the correlation between the technical analysis of forex and the role of news in this analysis.

As regards the given rules (observations), the author of this book and organizer of Masterforex-V Trading System states (claims) the following.

1. The coincidence of the medium- and long-term trends with the published news vector drives (stimulates) a new pulse in the given trend prolongation. One can return to the above-given example #3 (see GBP/USD pair movement in the timeframe H4). The day of August 3, 2006 has really become the celebration for analysts-economists all over the world! That is, a raise in the interest rate, initiated by Bank of England, has induced a heavy (intensive) “bull” trend in GBP/USD pair currency movement. However, analysts of the fundamental analysis don’t know and, respectively, don’t mention the following. This heavy (intensive) “bull” trend could be predicted if one combines the technical and fundamental analyses of forex. The technical analysis has confirmed the news concerning a raise in the interest rate, initiated by Bank of England.
2. Another situation is possible – i.e., when the vector of news and the trend direction don’t coincide. The corresponding example # 5 (May 10, 2007) depicts such a situation.
3. Contradictions can arise between the fundamental- and technical analyses when the news publication stimulates a quick and cardinal change in the trend.

Let’s examine an example of GBP/USD pair movement in the timeframe H4 within July 20-21, 2005.

• As regards USD, the news published is better than the prognostication.
• With respect to USD, the trend is ascending.
• According to Greenspen, the interest rate must increase in USA.
• As regards GBP rate at the same very days, 4 members of the Committee (except 3 ones) have voted for diminishing the interest rate in Grate Britain .
• There has happened a new terrorist act in London.

So, what one does get as the result (in the end)? GBP interest rate has heightened with respect to USD by 1230 points – from 1.7271 and up to 1.8500.

5. The correlation between the issue of news and the change in trend according to Masterforex-V Trading system.

Long-term trends do change only because of very important news. The reason is the following. Organizer of forex-game, so to say, must logically “explain” the regularity of changing in trade via analysts from various brokers’ companies and Dealing Centers. According to Organizer of this game, all these changes are conditioned just by the economical data concerning the currency in question. Otherwise, Organizer would be obliged to explain to the whole world the principles (foundations) of the technical analysis, installed into the central computer, intended for the game of forex. This implies the achievement of fibo-goals, 5-wave trend or 3-wave correction of a correctional wave in a large-scale timeframe, etc. As the result, the trend reversal must happen (can occur). Surely, never anybody will give explanations of this kind to the folk – otherwise, there would arise too many questions.

See another chart that depicts GBP/USD pair movement in the timeframe H4.

On June 29, 2006 after the issue of the news concerning the interest rate in USA one can observe the trend reversal in the timeframe D1. The reason is that in USA FRS has heightened the interest rate again (!). It has declared the temporal arrest (let-up) on the heightening of USD interest rate.

Comments and prompts submitted by Masterforex-V Trading System.

There is depicted GBP/USD pair movement in the timeframes H4 and D1.

The reader should try to understand on his own the following.

• What does indicate such an intensive (heavy) short-term-term trend, synchronous with respect to all ally currency pairs?
• Why does have place a recoil so intensive (profound) – first, at H1, then at H4 and after this at D1? This has happened after the above-mentioned intensive (heavy) short-term trend. What is the correlation between the short-term, medium-term and long-term trends in the given example?
• The reader should detect the points of enter the deal and going out of it (the corresponding calculations of the movement goals must be performed with the precision up to one or several points).
• How the reversal must go on – to start from the upwards and down to the heavy (deep) recoil (the pattern of reversal)?
• What could happen if the support at 1.8088 were broken through?
• What are the advantages of the delayed order “sell-stop” (for the lock) under the support at 1.8088 with respect to the stop-loss?

Let’s examine another example of GBP/USD pair movement in the timeframe H4.

Now let’s examine another variant of GBP/USD pair movement in the timeframe D1.

Comments and prompts submitted by Masterforex-V Trading System.

1. To become a successful trader at forex market (trading on news included), the reader must purely see the correlation between the news and technical analysis of forex. Anybody of the classicists of the technical analysis has not understood (or doesn’t want to explain) this correlation – even such specialists as Elder, Demark, Murphy, Schwager, Borcelino, Luka, Connors, Rashke, Chand, Cats, McCormick, Neiman et al.
2. There are the following prompts, submitted by Masterforex-V Trading System, necessary for understanding the correlation between the technical analysis of the medium-term trend and issued news.
• There is expanding flat encircled in the chart H1. Its behavior (dynamics) is in detail explained in one of the parts of Book 2 (see http://masterforex-v.su/book2.htm). There it’s clearly explained what does the expanding flat detect (mean). It’s based on the giving analysis to the mistakes made by Cornelius Luca and Erick Neiman.
• What’s the correlation between the expanding flat at different timeframes (H1, H4, and D1)?
• As a kind of a prompt, below one can see a chart made in larger timeframes – H4 and D1.    

See another chart that depicts a version of GBP/USD pair movement.

3. Issuing from these charts, the reader should try to understand the logic submitted by Masterforex-V Trading System.

·       What can happen further?

·       What are the points of opening/closing the deals?

·       What can be the possible ways of GBP/USD pair further movement?

·       What’s the correlation between various timeframes (M5-15, H1, H4, D1, etc.)?  

·       What’s the correlation between GBP/USD- and EURO/USD pair movement?

·       What’s the advantage of the “sell-stop” order postponed (suspended) - for the lock - in comparison with the stop-loss support under the condition of the “bear” trend?

·       How and where one should install (open) the lock? Under what conditions and at what point the trend change towards the opposite direction can be confirmed?

Again, one can see a chart that depicts another version of GBP/USD pair movement.

See GBP/USD pair movement in the timeframe of D1:

   See EUR/USD pair movement in the timeframe of D1:

4. The reader should complete (draw up, chart) the patterns of the work on the news. The models of points of opening/closing deals must be presented clearly and unequivocally.

5. The reader mustn’t install postponed orders before the issue of news – especially if the reader, like L. Williams, cannot distinguish (see, recognize) traps installed by the specialists in the point-of-sail terminal of the working currency pairs (as regards traps installed by the specialists, this problem is elucidated more in detail at http://masterforex-v.su/book2.htm).
6. News is being issued every day. At certain days up to 20-30 macro-economical indicators from various countries all over the world can be published. So, what of these indicators and why can they stimulate a change in the trend (a previous- or a new ones - or its correction).
7. You shouldn’t open a real account until you haven’t found answers to the above-enlisted questions. You will just lose your account - as it happens to 99% of traders all over the world.
8. I have mentioned just several rules of the work with news according to Masterforex-V Trading System. I hope that they will be helpful in your real trading at Forex. The complete course of training how to work with the news is available in Masterforex-V Academy. Besides, the reader can also get (receive) the everyday training under the leadership of experienced traders. They will explain you how to apply the theory to the current trades at Forex. Thus, in a year or two a novice can become a professional, qualified trader. It ‘s necessary to start from the demo account and further one be capable of working with the real account.