Forex Income Engine Review
Discover exactly what Bill Poulos reveals in his Forex day-trading course.  We have obtained a copy of the course and have worked through the entire curriculum, and now we strip away to hype to show you what is really there.

Bill Poulos had previously released an excellent Forex trading course, which we reviewed here on this site.  That first currency trading course, Forex Profit Accelerator, provides four distinct end-of-day trading methods tailored for trading the major foreign currency pairs. 

Forex Income Engine is the next evolution in Profits Run's library of instructive trading materials and offers somethings that their FPA course does not.  Forex Income Engine is designed to keep you out of higher risk trades, have you enter at “safe” points in the market, and implement strong risk management principles. If you master these aspects of the method, you will have a sound foundation that will leave you well prepared to adapt to future market changes and your own trading personality.

The course consists of five modules, each contained on its own CD-Rom.  A bonus module is included for those who are new to currency trading.  It covers important Forex basics, providing the new currency trader with the foundation they need to understand how the foreign currency markets work and how a retail trader can participate in those markets. The bonus training includes instruction on how to read FX quotes, leverage and margin issues unique to the Forex market, how to calculate trading profits and losses based on “pips," and a review of the various order types your broker should accommodate.

Module 1: Background, Overview & Trading Examples

The first module introduces the background and rationale behind the Forex Income Engine trading method. Bill Poulos reviews what can reasonably be expected when trading the system in the Forex markets and then provides a broad overview of the Forex Income Engine system, reviewing several example trades to give the student a sense of what it is like to trade this particular method.

Students are taught to limit their trading to the “major” currency pairs. These include the Euro, British Pound, Japanese Yen, Swiss Franc, and Australian dollar. The reason trading is limited to these particular currencies is because this is where you will find the greatest amount of liquidity. While it is possible to trade other more exotic currencies, you will likely find them to be less liquid and not an ideal trading medium.  An additional benefit of limiting yourself to just five currency pairs is that you will not need to look at a large number of securities or invest in sophisticated scanning software.

Selecting a quality broker is particularly important because unlike the stock market, Forex brokers are not necessarily regulated. Bill Poulos provides guidance to finding the best brokers and identifying the regulatory agencies that you want to be sure cover your particular brokerage. You will receive a broker scorecard that allows you to objectively assess a brokerage firm, cut through the hype, and find the broker best suited for your needs.

Having identified the currency pairs you will trade and having guided you in selecting a broker, Bill Poulos reviews the tools that you will need to put his trading method to work. It begins with reliable charting software and identifying your time constraints. The good news is that your broker may provide acceptable charting software at little or no cost and because Forex is a "24-hour market," your trading can take place at a time convenient to your schedule.

Module 2: Trading Rules

The method taught in the Forex Income Engine course is a deceptively simple swing trading technique that will move you into and out of the trade in just a few bars.  What that means is that if you're trading 30-minute bars, your trades will last an hour or two.  Trading 15-minute bars reduced the trade's life span to less than an hour.  You may choose any time frame that suits your particular tolerances and needs.

The Forex Income Engine trading method incorporates two common technical indicators along with a set of powerful trading tactics that identify high probability trading opportunities, place you into the trade, protect your capital, and capture profits. Numerous examples are reviewed using 30-minute, 15-minute, 10-minute and even 5-minute bars, demonstrating how the method can be used on differing time frames.

As was mentioned, any time frame can be used with the Forex Income Engine method, but it is designed for trading on an intra-day basis. You will be going after 1 to 10 bar swings in the market.  Long positions are taken at areas of support and short trades are opened at areas of resistance. You will be trading with the trend, but without the use of traditional trend analysis.

Two common technical indicators are used. It is not fair to reveal what those two indicators are, but what can be shared is that both indicators are available on just about every reasonably decent charting package out there.  If your broker provides a real-time feed for their charting software, you are most probably set.

There is nothing exotic about the selected indicators, but the use to which they are put is uncommon. Neither is used to identify or enter the trade. One indicator is used to avoid trade setups that will likely to fail. The second indicator is used to for risk management and identifying profit targets. Setting up both indicators is simple and straightforward, requiring no fine-tuning or adjustment. It took less than 5 minutes to have both configured and saved as a template on our broker's platform.  Once the two indicators are defined and present on your charting software, they will work with any intra-day time frame you may choose to trade.

The rest of module two covers both long and short set-up conditions, entry rules, the methods for placing an initial and follow-up stop orders, and exit strategies.  I will warn you, that at first blush these criteria seem complex, maybe even confusing, but do not allow yourself to be discouraged. After reviewing the trade criteria, Bill Poulos walks through multiple examples that demonstrate precisely how the conditions are applied in the market.

Module 3: Detailed Trade Examples Review

The entire purpose of this third module is to dive into multiple example trades, providing a detailed explanation and analysis of each trade. There are 23 case studies, providing a great deal of insight as to how the Forex Income Engine criteria are applied and how the trading rules will move you into, keep you out of, and have you exiting trades.

After watching several trade examples the individual elements of the trading system come together to create an understandable picture and some time spent trading in a practice account will have you trading the system confidently.

Module 4: Forex Brokers, Charting Software & Trading Platform

This is the “shop talk” portion of the course. To assist you in identifying and ranking good Forex brokers, Bill Poulos has put together a “broker scorecard.” He actually goes beyond a superficial discussion and demonstrates how to score a broker.

The criteria discussed include regulatory over site, appropriate spreads, acceptable order execution, trading platform and minimum leverage. By the time you work through each of Bill's scoring criteria, you will be armed with specific, objective criteria that you can use to identify the quality brokers as well as the questionable.

Demonstrations are also provided as to the mechanics of placing orders. These videos were created with live market data, using Bill's actual account. Using his trading platform, he walks through the daily business of trading the foreign currency market. This is a true “look over the shoulder” perspective, as the videos are shot real-time and not handpicked set-ups using historical data. You will see real trading using the precise methods you are taught in this course.

One of the things I especially appreciated about this video was the fact that there was none of the typical trading hype involved. Bill methodically works through his rule set, applying each rule without questioning or re-thinking the trade. Where many other trading courses would try to create a great deal of excitement, these videos show you the reality of trading. It is methodical, it is purposeful, it is deliberate, and, yes, it can even be dull at times. However, you'll see how Bill's rule set can literally make money in about 20 minutes during lunch.

Module 5: Risk Management & Discipline

The reality of trading is that you can devise the most clever trading method possible, but still lose money if you do not implement proper risk management in a disciplined fashion. It is also possible to take a less than stellar trading system and maintain profitability through risk management. This is where a trader “makes or breaks” themselves.

Emotions play a big role in trading. Losing trades are inevitable, even when using a well designed trading system. Not only will you experience an occasional loss but you must be prepared for streaks, with two or more trades losing in succession.  This will play havoc with your emotions.

The key is to start with a strong trading system that gives you a statistical edge.  All of Bill Poulos' trading systems are rigorously back tested, so you are assured that Forex Income Engine provides that sort of edge. Consequently, you will be taking more “winning” trades than “losing” trades.

As good as the Forex Income Engine trading system is, it will not eliminate loosing trades. Risk management is absolutely necessary.  In this fifth module, Bill Poulos devotes a great deal of time to the subject of risk management. He provides specific instruction on sizing your trades and how to adjust position sizes as your account grows and in the event you experience an inevitable draw down.

There is also a practical discussion concerning how many trades you should have open at any given time. Bill's advice is dependent upon time frame, so if you're trading a longer time frame you can ramp up the number of trades and scale the number back if you're working on shorter time frames.

You will also be treated to a good discussion about the realities of trading and the experiences you are likely to encounter over time. Bill Poulos prepares you for future success and your own personal evolution as a trader. While the course is designed to get you “up and running” with the Forex Income Engine trading system, is also addresses future adaptation to your personalized trading style.

No trading course is the conclusion of your trading career. As long as you trade, you will be in a constant state of learning and adaptation to changing markets.  While a comprehensive course, it is inevitable that you will have questions or may want some clarification on certain aspects of the trading system. Support is provided, giving you access to Bill Poulos and his team.

You Can Expect From Forex Income Engine

The five standard modules and one bonus module, come on CD-Roms that you will view on your computer.  Each comes in it's own protective case, so you can easily take one or two to the local coffee house or to your office if you like to get a change of scenery when studying.

A full color reference manual is also provided in a 3-ring binder, along with reference cards contaning the trading rule sets.  The cards are convenient references that you will want to have with you when you first start trading in the practice account and when you go live with real money.  A "Quick Start Guide" is also provided to help you get started with the material in an efficient manner.

It took me a weekend to work through the course.  That includes watching each of the five modules and reviewing the videos to make sure I understood the material.  Quizes are provided to help ensure you have properly understood the concepts.

I do not recommend jumping straight into the market after you finish your initial course review. Rather, open a practice account with one or more Forex brokers and put the system to work while “paper trading” for a short while.  This is necessary to allow yourself a chance to really learn the system's rule set and get used to the broker's trading platform. Once you're comfortable with both the trading system and your trading platform, it's just a matter of funding an account.

That brings us to the minimum account size.  The tight risk management rules will allow you to trade a very small account.  Realistically, you can probably get away with trading an account of less than $1,000.  This is makes it very easy for most people to get started without a significant committment of capital.  As you build confidence in the system and your ability to adhere to the rules, you should see the account size expand. 

You are truly learning a skill that will serve you for many years...

by Christopher Smith - December 1, 2008

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The author is the founder of TheOptionClub.com and an avid stock, options, and currency trader.  He has routinely reviewed trading courses published by Bill Poulos and other leading educators.

Source: http://www.theoptionclub.com