Module 1
Black Dog Basic

Page 1

Intro - Time Frames - Basic Rules - The 50s

Black Dog Trader

Page 1. Black Dog Basic

Here's what we'll discuss in this section

A short introduction, time frames, basic rules.
Building our charts and use of indicators.
Our main indicator window.
Entries, exits, downloads, and summary.

About Black Dog

Early this century(!), after losing two or three sizable accounts to Mother Forex, I realized something had to be done and to start trading in a fashion which was not the way I had been trading, ie., like an idiot.

People made money at this game - why not me?

Radical thinking was required, I was simply doing and using what every one else was doing and using so why was I losing, and big time? I'm not an unintelligent guy! Then it hit me - I was getting what every one else was getting - because they too are all doing and using the same things ..... and losing. Remember this.

Therein lies the first lesson - DO NOT do what the hordes are doing. Think outside the box. From that point things started looking up and my next (fourth) account, although not growing, was hovering around the break-even area. 

The raw seeds of Black Dog had been planted though the name did not exist until a few years later. Those seeds continue to grow and evolve up to this day where we have a fantastic methodology and superb strategies to fight back at Mother Forex. 

If you do what everyone else does, you'll get what everyone else gets..!!

A Huge Welcome to Black Dog Trader

I am so pleased to meet you and sincerely hope that we have a long and profitable relationship for many years to come. Let me say from the outset that Black Dog WORKS - and it works very well. I have used it for more than seventeen years and it keeps me in the lifestyle that I am accustomed to.

No, there are no images of big houses, swimming pools, fast cars, and faster women! We are traders, not salesmen or marketers. We simply trade, and do it well.

Let me ask you a question. Why are you here?

I suspect that you are here for exactly the same reason that I am - to be more successful at trading. To trade in a better fashion, and eventually to be profitable. Am I correct?

Of course I am.

That is precisely what my job entails here and I will do it to the best of my ability to get you trading in a progressive and constructive manner. My job is to get you trading - not gambling.

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So, like all good buildings that are constructed on a solid foundation, Black Dog is no different. We have to lay the foundations. There is absolutely nothing within this course that will faze anyone. But should you have any difficulty whatsoever you can always email, Skype, or post at the bottom of the page, I reply to them all.

This module is entitled Black Dog Basic, it is the one that started me on that upward curve many years ago. A very important module as it will give you the foundation that is required for the remaining modules.

Hopefully you will learn our other methods too and make Black Dog your preferred method of trading.

Please study this module closely rather than a quick breeze through as it sets the tone saving you a lot of time later.

A quick warning - I tend to waffle on a bit sometimes because trading is my passion, so please excuse me... 

Please please please take your time

This is a MUST. The markets are not going anywhere. It is the trader who knows EXACTLY what he is doing who will succeed. I want you to be that trader. I have put my heart and soul into this course - it is how I trade - you have joined us but I sincerely hope you do not waste your money by going at it on half-cock. Put your heart and soul into it too.

You would not be reading this if your trading was ok - be honest. You have tried many systems but, for some reason, they didn't do it for you. Ask yourself why. Don't system-hop, that ends now, really give the Dogs a good go and you'll really see what they can do for you.

Leave those $97 systems alone - they do not work.

For the next 10 weeks or so really buckle down and get the Dogs into your trading brain. No effort - no gain.

Here and there in the course we have these red sections that really should be noted. They WILL likely have a positive effect on your trading account should you act upon them.

Please take note:

If you do what everyone else does, you'll get what everyone else gets
No effort in = no pips out
Build the foundation
DO NOT add other indicators to Black Dog charts
Follow the rules and keep it simple
Don't just read the text, but STUDY
Above all - Take Your Time
Prepare yourself for the next module - REALLY study the current one
Contact me pronto if you have a problem, don't delay

Time frames and Intra-day

Which time frames to trade?

Well, this is a difficult one. What time frame (TF) should you trade? It all depends on your circumstances, your lifestyle, your job, your family, where you live, etc. It's just something that you need to work out for yourself.

Personally I have a patience problem which means any time frame above M15 (each candle being 15 minutes) is a big deal for me. This is not to say that there are no trading opportunities on the higher TFs, there are many as we shall shortly see.  But I must explain to you why I trade the M15 TF as most of the charts shown will be on that time frame. This is simply because I can find 2 or 3 decent trades in the morning (usually on different pairs) and then forget about trading for the rest of the day. Who wants to be in front of a computer all day?

I'll use that time frame in most of the chart examples in explaining the Dogs, but all TFs can be traded using this method as it's pretty flexible as we'll see. I must also add that I'm pretty impatient when it comes to taking profits too.

So, let's take a look at a first naked chart and a first look at Metatrader. Here's the CADJPY M15. It is showing about two day's worth of price action, it is showing a lot of information.


There are some really good moves in the chart above that could have generated lots of pips for the savvy trader. My job here is to get you into those moves with minimal risk and the maximum profit. I look for up to four moves per day. They don't happen every day regardless as there are flat days and we just have to wait it out. Most pairs show good movement like the CADJPY above almost on a daily basis, below we have the GBPCHF which also exhibits some good intra-day moves.


If I hadn't told you that both charts above were on the M15 TF would you have noticed just by looking at them? Probably not, they both appear to be different yet similar as the candles move up and down. Check your own naked charts but on different time frames - from M1 up to monthly - they all look similar no matter what instrument you look at. The point I'm trying to make here is that this method works very well no matter what TF you prefer to trade.

I confess to not having the patience to trade any TF above M15, in fact I often trade lower. You must trade whatever TF you are happy with. It's really horses for courses.  Consider the chart below of GBPCHF again but this time it is the daily. Each candle represents one day of price action. In appearance there really isn't much difference between all three charts. It seems to me that if the method works very well on M15 then why not any other. Black Dog works on any time frame.


If we are going to trade intra-day then we need the market to be moving in order for us to profit, we also need to stay out of the market when hardly any movement occurs, a flat market. Trading ranges can be very expensive. Where you live will dictate the times you are able to trade and also which pairs. Living in the European time zones enables you to trade the UK session from the open and well into the US session. Living in Australia is a different matter - unless you are a night owl!

It is possible that trading the higher time frames allows you to leave trades open overnight but for me, when trading M15 or less, then I close all trades for the night. Very risky otherwise.

You only have to study any forex pair to see that activity falls off after about 18:00 GMT until the next day at around 07:00 GMT. This doesn't happen every day of course, nothing is for certain in trading. We want to avoid flat markets IN GENERAL. Being stuck in a flat market is not good for your blood pressure and will more than likely result in a losing trade.

The better trading times are from 07:00 to 18:00 GMT.

Yes, there can be good moves outside those times but more often than not there isn't. Play the percentages. There are plenty of opportunities when the market is more active. You should consider rule #1:

Black Dog Basic - Rule #1
For intra-day trading under H1 TF
trade only from London open until about 18:00 GMT
Close all trades for the night

We have two 'red' rules which are important for the fact that they save you lots of money. Please trust me on this. To reinforce what we have discussed so far please spend some time on your own charts, going back in time and slowly scrolling forward. Notice how activity is much reduced outside those times. It is far better to trade when there is a greater chance of success.

Our methods generate signals at any time of the day but it is you who decides which ones to take. Violating Rule #1 is more than likely a probability for traders outside the European time zones but trading higher TFs may be the answer. Or perhaps trading the currency pair that is active in your time zone. Whatever happens the open of London and New York will affect any currency, index, or whatever instrument drastically.

That's it for time frames. We now know when to trade, let's now figure out how to trade. Let's start to build our charts.

Building Our Charts

It must be stressed that we allow PRICE ACTION to dictate our entries into the market. And exits for that matter. NO crosses of indicators or moving averages. This is a losing tactic. The fact is that we don't want to be bullish or bearish - we want to be RIGHT with the market, so in that light we need a line in the sand to indicate to us the direction we are likely to trade. From this point I must assume that you are well-versed in the basic indicators.

The 50 EMA does a great job in this regard and it has served me well for years. For our purposes we need to add a 50EMA to the HIGHS of each candle and a 50EMA to the lows of each candle. These are our lines in the sand. Let's take a look at a chart:

CHART #4 CADJPY M15 showing the channel

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The 50 EMAs (or the channel) are very good at keeping us out of trouble. The first law of trading is to preserve capital so we can fight another day, the 50s help us to do this perfectly by keeping us on the right side of the market for our time frame. You can see that if you are in a long trade then price needs to remain above the 50 channel, where the reverse is true for being in a short trade. Acting on this alone will save us lots of pennies.

You can also see that if we enter a trade and price immediately reverses to close back into the channel then we may exit with a small loss. This is one way of controlling risk by keeping losses to a minimum but we'll discuss this in greater depth later. For the moment we are simply building our charts.

Using just the 50s, in the chart below notice that there are maybe a couple of small losers to the short side but the big move up more than made up. Our method is already beginning to keep us on the right side of the tracks and we've only just started!


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The 50s do a pretty good job of preventing us making rash DATs or Dumb-Assed Trades. This is all part of the grand plan to stop us over-trading (see list). Don't worry, should we need to exit because of our strategy and the market then resumes its merry way, we can always re-enter. Let's check out another chart:

CHART #6 Keep to the correct side of the tracks - or else..!!

Black Dog Trader

The chances are very good that we will lose money if we trade opposite to what the 50s say. Believe me, there will be more than enough trading opportunities for us without going against the grain or trend, so we really don't want to risk it. Let's get as much in our favour as possible, starting with the channel.

For the time frame we are trading:

Price above 50s = up trend. Price below 50s = downtrend.

To be doubly sure then checking the next higher time frame to confirm your trade may help. But we have this covered WITHOUT changing time frames. All will become clear.

With that being said we just cannot enter a trade every time price sticks it's nose out of the channel. We need other stuff to tell us. But the 50s are a good quick indication of trend that should not be ignored.

What about when the market is flat? Well, we have a way around that too. The BD system can't beat the trading range every time, no system can, but before very long you will come to realize how good this is.

The 50s are also instrumental in our entry criteria, in fact the whole methodology is built around them. That point alone makes it very important to understand the concepts in this section. Please read again.

We have just begun the process of building our charts and already it keeps us with the mini-trend (one of the items on our list on the next page). The 50s are reinforced later with our other tools to hopefully grab those high-probability trades much sought after.  


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Now, it really does depend on where your entry price is but Black Dog will not allow losses to become astronomical. We have to accept losses as part of doing business, there is just no way to avoid them so the plan is to keep them tolerable. The rules are there to protect us.

If the system says out, it means OUT.

To help us further we also have the coloured 50s which are available in Module 2. These really help in determining direction as they tell us who is in control - buyers or sellers. Green for buyers and red for sellers. The next chart shows this.

CHART #7a The coloured 50s

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The channel is so important and to me it is the best indicator in the universe. Please study this section very carefully as it will assist in future modules.

1. Please spend some time now in selecting the best time frame for your needs. Don't chop and change.

2. Place two 50 EMAs onto your charts. One of the highs and one of the lows thus producing a channel.

3. The best traders do plenty of chart time. Scroll through your charts with just the 50s and see what you can see.

In Page 2 there must be a little more waffle and we also discuss the list that the new strategy must cover. The famous Black Dogs are then added to our charts together with the SES plus a couple of indicators for you to play with.

Summary of Page 1

Be a trader, not a gambler
PLEASE take your time - there is no panic
Use only BD charts, templates, and indicators
Select a time frame suited to you
Any problems - contact us PRONTO
Rule #1

A sad day - my Origami business has folded..!!

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