28# FX Volcano Trading System

Submit by Lorenz

Fx Volcano is a trading system design with three modes and three main indicators. The system follows a step-by-step approach for entry and exit signals, using an entry/exit indicator, a currency strength/weakness dashboard, and a trading assistant to manage trades.

1. Trading Modes (FXVOLCANO1, FXVOLCANO2, FXVOLCANO3)

The system offers three operational modes that vary in risk, speed, and potential profit:

FXVOLCANO1 (Conservative Mode):
- Description: Provides the most secure signals, with lower profit potential.
- Target Audience: Traders who want to spend minimal time in front of the computer.
- Recommendation: Suitable for all types of traders.
- Timeframes: Longer timeframes (H1/H4/D1 for swing trading).
FXVOLCANO2 (Balanced Mode):
- Description: The most universal mode, offering a balance between risk and profit.
- Target Audience: Beginners and experienced traders.
- Recommendation: Ideal for those seeking stable signals with limited risk.
- Timeframes: Mid-range timeframes (M5/M15/M30 for day trading).
FXVOLCANO3 (Scalping Mode):
- Description: Fastest signals with the highest profit potential, but also higher risk.
- Target Audience: Advanced traders familiar with scalping.
- Recommendation: For those who can handle quick market movements and rapid decisions.
- Timeframes: Short timeframes (M1/M5 for scalping).

2. Indicators

The system includes three key indicators:

Entry/Exit Indicator:
- This indicator produces buy or sell signals based on price action or technical patterns.
- Signals are color-coded (e.g., white for a sell signal on EUR/USD).
Currency Strength & Weakness Dashboard:
- Displays the relative strength or weakness of different currencies.
- This dashboard is crucial for confirming the validity of a signal.
- Example: If the Entry Indicator gives a sell signal on EUR/USD, check if EUR is weak on the dashboard. If EUR is weak (displayed in white), the signal is valid.
Trading Assistant:
- Manages trade execution, setting stop losses, take profits, and trailing stops based on the selected mode.
- Helps automate trade management, reducing the need for constant monitoring.

3. How the System Works

Here is a step-by-step guide to how the system operates:

Pair Selection:
- Start by selecting your favorite trading pairs (recommended: 4-8 pairs).
Choose the Timeframe:
- Select the appropriate timeframe depending on your trading style:
  - Scalping: M1/M5.
  - Day Trading: M5/M15/M30.
  - Swing Trading: H1/H4/D1.
Wait for Entry Signal:
- Monitor the Entry/Exit Indicator for a signal (e.g., a sell signal on EUR/USD).
Confirm with Currency Strength Dashboard:
- After receiving a signal, confirm it by checking the dashboard. If the signal suggests selling EUR/USD, check if EUR is weak (displayed in white). Matching the colors confirms the trade.
Execute the Trade:
- Once the signal is confirmed, use the Trading Assistant to enter the trade.
- Set the stop loss and take profit levels according to the mode:
  - FXVOLCANO1: Conservative risk with wider stops and smaller position sizes.
  - FXVOLCANO2: Balanced risk with moderate stops and position sizes.
  - FXVOLCANO3: Aggressive scalping with tight stops and larger positions.
Trade Management:
- The Trading Assistant will manage the trade automatically, adjusting stop losses, trailing stops, and exiting the trade when necessary.

4. Entry Example (SELL EUR/USD)

Signal Received:
- The Entry/Exit Indicator produces a sell signal for EUR/USD (signal color: white).
Dashboard Confirmation:
- Check the Currency Strength Dashboard to see if EUR is weak (white). If it matches, the sell signal is valid.
Execute:
- Use the Trading Assistant to place a sell order on EUR/USD, setting stop loss and take profit based on your chosen mode (FXVOLCANO1 for conservative, FXVOLCANO2 for balanced, or FXVOLCANO3 for scalping).
Monitor:
- Allow the Trading Assistant to manage the trade until either the stop loss or take profit level is hit, or adjust manually if necessary.

5. Summary of the System

FXVOLCANO1: Secure, low-risk trades with limited profits. Ideal for traders who want minimal screen time.
FXVOLCANO2: Balanced signals for all levels of traders, with moderate risk and profit potential.
FXVOLCANO3: Fast, high-risk signals for advanced traders familiar with scalping techniques.

By following the system’s three-step confirmation process (signal, dashboard check, trade execution), traders can minimize risks and increase the probability of successful trades.