Sabtu, 30 April 2016

Even more on news driven trading - forex trading swing strategy

Even more on news driven trading ~ forex trading swing strategy


News driven trading is even more in vogue today than when I last mentioned it, judging from the increasing number of vendors (e.g. Ravenpack, Sensobeat, Recorded Future, etc.) and researchers pitching their wares. Not only are traditional financial and economic news deemed important, but researchers have found even blog posts (at least those on Seeking Alpha) and Twitter (Hat tip: Satya and William) to be predictive of stock prices.

One key ingredient to success in this type of trading is of course the ability to gain access to breaking news ahead of other traders. On the macroeconomic news front, the MIT Billion Prices project has spun off a company called PriceStats to deliver daily consumer product price index to subscribers. PriceStats compiles this index by continuously scanning online retailers websites, and hopefully provides a preview of the official CPI numbers. Whether this is useful for futures and currencies traders is of course subject to their rigorous backtests, though the chart displayed on their website does suggest that the daily price index is a leading indicator of the CPI.

There is an important caveat to using news trading: not all news are equal. So another key ingredient to success is to carefully differentiate between the different types of news and backtest their predictive abilities separately. For example, I recall some research has indicated that an analyst downgrade of a stock from a "hold" to a "sell" rating has more impact than from "buy" to "hold" rating.

My own experience with news driven trading is that for all this trouble, the trading opportunities are relatively few compared to pure price driven trading, the consistency of success is low, and finally the profitability lifespan is short. If you have better experience, do share it with us.
More info for Even more on news driven trading ~ forex trading swing strategy:

EURO TRADE UP 200 PIPS ON NFP NUMBERS - open source forex trading system

EURO TRADE UP 200 PIPS ON NFP NUMBERS ~ open source forex trading system


The dreaded Non-Farm Payroll (NFP) Employment Change was released today and led to the sharp and volatile movements normally feared during this major Fundamental announcement. The employment data, which was positive for the US Labour Market, led to sharp gains of 100 Pips and 80 Pips against the Euro and Swiss Franc, respectively, within 2 hours of the release. Lucky Day Traders may have got some or even all of this movement if they had correctly guessed the short-term reaction of the market. However, those who were already in long-term trades based on the major trends of these two pairs, would have comfortably avoided this volatility on their way to even larger trading gains.


The number of persons employed in the United States increased by 248,000 in September, translating to a welcomed decline in the Unemployment Rate to 5.9% from 6.1%. The increase was also more than the forecast 216,000 and the previous figure of 186,000 for August. Naturally, the reaction to these numbers was sharp, positive and immediate for the US Dollar.  


EURO USD- 30 MINUTE CHART
























 USD CHF - 30 MINUTE CHART
























On the Euro pair, one could have anticipated this movement with a short position placed before the announcement, since the forecast was for an improvement in the numbers. Similarly, there was already a start to the breakout from that Pennant on the USD CHF which the trader could may have used as a sign to enter long. Nevertheless, given the history of these and other currency pairs reacting in contrast to the economic data-especially for the NFP-the trader may have had some doubt about the actual direction of the market.  

Past trading losses from this and other fundamental data may have also increased the anxiety about trading altogether, inclusive of how much to get from the trade - 30 Pips, 50 Pips, 10 Pips? Complicating matters for USD CHF traders would have been the weak candle that started this breakout- a weak breakout that often leads to False Consolidation Breakouts.



USD CHF - 30 MINUTE CHART




















 



In contrast to these difficulties, long-term traders would have already been in trades based on the larger patterns and trends on these pairs. 

The EURO USD was always expected to continue bearish regardless of a single monthly economic data point. A wider view of the Daily Chart reveals that the pair had been in a sharp downtrend since May this year when it turned at the Resistance of the large Pennant Consolidation. 

 
EURO USD - PENNANT CONSOLIDATION























Similarly, the USD CHF was continuing a sharp rally towards a major Outer Downtrend Line after breaking above the Inner Downtrend Line in August.


USD CHF - SHARP RALLY TO TREND LINE

 






















Within this context, a short trade on the EURO USD could have been opened using the most recent bearish signals on the Daily and 4 Hour Charts. The Daily Chart had already broken a Counter Trend Line (CTL), while the 4 Hour Chart followed up with a bearish breakout from a Pennant.


DAILY CHART


 



















4 HOUR CHART
 
 





















Entry took place after the breakout, with the Stop Loss set above the Resistance of the Pennant. As you can see here, additional entry points were also possible to add to that position. The inversely correlated USD CHF provided a similar Pennant breakout setup on its 4H Chart.


4 HOUR CHART






















The Stop Loss was placed below the Support with the target set for that major Trend Line target. After 7 day patient days, the target was finally hit.


DAILY CHART

 




















For the EURO USD, however, the target at Support is likely to take a much longer time. With 150 Pips left in this trade, we could see this area hit by the end of the upcoming week.


DAILY CHART























The larger trends and setups on the Daily and 4 Hour Charts provide bigger profits with less volatility and trading stress relative to the Smaller Time Frames. Short-term reactions to important but inconsistent Economic reports have very little bearing on the main direction and targets of the larger charts. With the greater stability and clarity of these trends, Retail Traders can therefore hold on to profitable trades for a much longer period with greater confidence that their analysis and patience will be significantly rewarded.



MAIN TECHNICAL POINTS


  • Counter Trend Lines -  (SECTION 3 - CURRENCY PATTERNS & MARKET DIRECTION)

  • Downtrend Lines - (SECTION 3 - CURRENCY PATTERNS & MARKET DIRECTION)

  • Breakouts - (SECTION 4 - MARKET DYNAMICS - TRENDS & CONSOLIDATION)

  • Stop Loss Placements - (SECTION 6 - TRADING PLAN - EXIT & ENTRY RULES)

  • Weekly Ranges - (SECTION 3 - CURRENCY PATTERNS & MARKET DIRECTION)



    ___________________________________________________________



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    Duane Shepherd 
    (M.Sc. Economics, B.Sc. Management and Economics)
    Currency Analyst/Trader
    Contact: shepherdduane@gmail.com
    Twitter: @WorldWide876
    Facebook: DRFXTRADING 

    More info for EURO TRADE UP 200 PIPS ON NFP NUMBERS ~ open source forex trading system:

    Methodology Turns Currency Fund Managers into Amateurs - forex trading system sample

    Methodology Turns Currency Fund Managers into Amateurs ~ forex trading system sample


    Within the context of extremely low currency volatility in 2014, negative and flat rates of returns have been the norm for Currency Traders around the world. The Barclays BTOP FX index is down by 4,36% year-to-date as at July 31, 2014 and with the challenging environment expected to continue, the outlook appears to be bleak for traders. Yet, how is it that despite this challenging environment, a simple Methodology continued to generate large rates of returns with signals that have identified high paying trades over the last 5 years of Financial turmoil?

    The table below shows the results of trades and setups that have been identified by this Methodology so far this year. The returns assume a very conservative Risk per Trade of 2% on a trading account of US$100,000.


    TABLE 1- YEAR-TO-DATE JULY 1, 2014 




    Although these setups appeared an average of just twice a month, the size of their targets and the accuracy of the signals were more than able to compensate. Below are a few examples of these setups.



    NZD CAD - DAILY CHART















    CAD CHF - DAILY CHART 

















    GBP USD - DAILY CHART

















    EURO NZD - DAILY & 4H CHARTS




















    USD CAD - DAILY CHART

















    Similar opportunities were also provided over the last few years in which the market was affected by the aftermath of the 2008 Financial Crisis. Heightened uncertainty, budget crises, debt crises and extraordinary policy measures still gave the fortunate users of this Methodology strong gains on several occasions. 


    EURO USD- DAILY CHART




    USD CAD - DAILY CHART





    EURO JPY - DAILY CHART

















    GBP CHF - DAILY CHART








    GBP JPY - DAILY CHART














    METHODOLOGY

    The Methodology is based on identifying High Probability setups across the Currency Market, using only the Daily and 4 Hour Charts. Specific combinations of Japanese Candlestick Formations and Signals were found to provide a consistently high rate of accuracy when used within certain parameters established on these time frames. These charts offer a greater degree of stability relative to the smaller charts, while offering practical Risk-Reward ratios for the average Retail Trading account. 


    The main aspects of the strategy involve;

    • Identifying Market Direction using Candlestick Patterns;
    • Waiting on the Daily & 4 Hour Charts for Entry Signals;
    • Aiming for 100-200 Pips per trade;
    • Holding Trades for a Pre-determined Holding Period;

    Trading is focused on the larger trends of the most liquid currency pairs away from the noise and chaos of the lower time frames. It is a type of Swing Trading system in which trades are held for a few days at a time in contrast to the quick turnover approach of Day Trading. The Methodology also makes use of the Weekly and Monthly Ranges hardly seen in other Swing Trading systems, but which are crucial to entry and exit decisions.


    ECONOMIC DATA & STATISTICAL INDICATORS

    The use of short-term economic data has been found to be unnecessary for successful trading. In most cases, the net reaction of the market to any major news item will be reflected in the Candlesticks of the larger charts. It is therefore more prudent to simply wait on these signals to provide market direction for the larger and more profitable currency movements. Statistical Indicators are mathematically-based and can be lagging in nature. Experimenting with several of these to find the perfect signal or combination of signals can be a tedious and unrewarding task especially if done on the lower time frames.



    TRADE MANUAL

    The Methodology has been put together in an extensive 166-Page e-Book that can be used by individuals and professionals seeking to complement or replace their existing trading systems. This manual and the strategy explained will provide;

    • New insights that surpass the recycled trading information in free & low-cost books/manuals; 
    • Predictable times for entry using the Daily and 4 Hour Charts;
    • Actual step-by-step Trade Sheet instructions;
    • Practical ways to avoid checking trades before targets are hit;
    • Pre-determined exit rules based on each trade setup;
    • Weekly & Monthly Ranges not seen in any other strategy;
    • The 4H Chart candles to avoid depending on the time of day;
    • Spotting the start of Consolidation and False Breakouts;
    • Clear Candlestick Patterns that start and end Trends;
    • Real examples of each Technical Factor explained;
    • A Proven set of parameters built on 10 years of trading and analysis of market patterns;

    In addition to this, Subscribers who email the Code at the end of the Trading Manual will receive;

    • Trade Setups sent 30 Minutes before Entry;
    • Personalized Analysis of Preferred Currency Pairs;
    • Excel Sheet Setup for Trade Decisions & Leverage Calculations;

    When this Trade Manual is combined with detailed Chart Analysis and interaction provided daily on this site, a real source of Long-Term Income & Wealth awaits.




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    ____________________________________________________


    SUBSCRIBE TODAY

    ____________________________________________________



    Buy Now
    US$120.00



    Support independent publishing: Buy this e-book on Lulu.

    Free 
     ___________________________________________


    Duane Shepherd 
    (M.Sc. Economics, B.Sc. Management and Economics)
    Currency Analyst/Trader
    Contact: shepherdduane@gmail.com
    Twitter: @WorldWide876
    Facebook: DRFXTRADING 

    More info for Methodology Turns Currency Fund Managers into Amateurs ~ forex trading system sample:

    How to Trade Forex The Key Points You Need to Understand to Win - slumdog forex trading system free download

    How to Trade Forex The Key Points You Need to Understand to Win ~ slumdog forex trading system free download




    If you want to learn how to trade the markets successfully and earn foreign exchange, this article will show you how to get the right forex education and how to get the mindset for Forex success - look at how to win at Forex.

    Forex is a learned skill and anyone can learn Forex trading, but you need the right education and avoid the myths first and then have to adopt the right mindset to succeed. Lets look at these two elements of other successful currency trading.Do not make the mistake of thinking that it will make money with no effort and fall into the rich get quick Forex robots and expert advisors that provide an income for life for a few hundred dollars - is not working. If you want to make money, you must learn certain skills, but the good news is that this should only take a few weeks.


    Forex trading is simple and simple systems work best; Thats why anyone can learn to trade Forex but have a good strategy is not enough, you need to implement, and change with discipline. Thats why most traders fail because they can not apply a trading strategy with discipline and if you can not implement a strategy with discipline, they must not just one.If you use a Forex trading system you must stick with it and this is easier when you win, but you will have to face periods of losses and in these periods, its essential to stay the course and keep your losses small - Sounds easy?


    It is not because their emotions get involved and most traders, he sees them mounted on their trading signals systems, change or leave. To trade with discipline, you have to accept losses and keep small, so that its heritage is preserved and can run large profitable trades when you touch them.

    Discipline is based on confidence and know what youre doing and leave your ego behind, if you want to be right all the time or feel ready, do something else. If, however, want to make money and can accept short-term deficit and trade with discipline in the long term is the way to enjoy success, youll be able to make a great second or even life changing income, about 30 minutes a day.

    More info for How to Trade Forex The Key Points You Need to Understand to Win ~ slumdog forex trading system free download:

    Jumat, 29 April 2016

    Time of day effects in FX trading - forex trading straddle strategy

    Time of day effects in FX trading ~ forex trading straddle strategy


    As I mentioned in a previous post, one of the main ingredients of success in constructing a profitable momentum trading strategy in Forex (and futures) is to pay attention to the entry and exit times. I havent seen any good momentum strategy that has "time-translation invariance", i.e. works without reference to a fixed time of the day. The fixed time can refer to a benchmark level of the market (e.g. the previous close), or it can be the entry or exit time.  (This is in contrast to mean-reverting strategies where the reference price can often be just a moving average.) A recent research paper (Hat tip: William) points to another example of such time-of-day effects in FX markets: a currency typically depreciates during its local trading hours.
    More info for Time of day effects in FX trading ~ forex trading straddle strategy:

    Forex Trading Financial Software an indispensible too - forex profit heaper trading system

    Forex Trading Financial Software an indispensible too ~ forex profit heaper trading system


    Where can I find out the latest on Forex trading financial software? Well if you already have a Forex account you would have the answer to that question. There are many different types of software in regards to the Forex.

    This Forex trading financial software has the latest information and market situations so that you have the information right at your fingertips. This will make the decision that you have much more easier as it provides market analysis in order to make an informed choice.

    By using the Forex trading financial software in conjunction with your account, you will have the tools and information to choose wisely as far as what you will buy and sell in regards to your foreign currency. It takes time, patience and information in order to make informed choices when you are ready to buy or sell currency.

    When you make a choice with Forex trading financial software that is fully informed, you stand the chance of making a financial gain when buying or selling in the marketplace.

    When choosing the Forex trading financial software that is right for your situation, you will have an edge over those who do not have that information. Also by choosing whether or not your software is mechanical or automatic can make quite the difference in jumping on the bandwagon as it happens or missing an opportunity. This depends upon the choices that you make.

    When accessing Forex trading financial software, you have a choice of whether or not to buy and sell. You also have the choice of the currency that you wish to buy or sell. You also have the choice of the lot set that you wish to purchase. You also have the choice of what is to be sold when.

    Custom tailored software, like the forex trading financial software is geared specifically for the forex market. They cannot be found anywhere else except in the forex market. This is because the forex market is unique over other markets.

    The uniqueness is of the forex market makes this software. A very essential tool for any investors. With the guidance obtained through using the software, you will allow yourself to be better equipped for making informed decisions in a fast-growing market.

    By Joel Gardner
    More info for Forex Trading Financial Software an indispensible too ~ forex profit heaper trading system:

    Here is the Signal to Forex Money - heiken ashi forex trading system

    Here is the Signal to Forex Money ~ heiken ashi forex trading system



    Sure it would be great if something or someone tells you when to trade or where to trade and how to trade. Sure that would be nice, but if you are Forex Trading wouldnt it be better if you could do it yourself. Would you like to have the Forex Trading skills to acquire all the money you wanted from Forex Trading?

    Then the answer is simple, you have to learn about trading signals namely leading and lagging.

    A trading signal will tell the trader when it is the time to get into a trade. Of course, these dont come out with signs however so learning how to see them is the first education lesson to learn. By learning through forex courses, you will learn to hone your skills to identify them. For more educational information feel free to visit the CFD FX REPORT. They specialize in helping to educate forex traders. They can also help you find the Best Forex Brokerin the market.

    After that, currency trading signals and indicators can actually be identified with just two categories namely leading and lagging. First, let us define leading indicators.

    The major indicator or signal shows when and where a trend would take place and if you are successful in identifying this and trading that pair, you will be one of the first to take advantage of this trend which means that you will make more money and lots more profits.. However, leading signals can also be false so there is a considerable amount of risk involved with this forex trading tool.

    The other indicator or signal is less risky compared to leading signals and is known as lagging signals. These signals show you which trends had already begun which you could still invest in. The downside however is that the profit you will gain is far less compared to the former indicator.

    By fxsignal
    More info for Here is the Signal to Forex Money ~ heiken ashi forex trading system:

    76 PIP CHF JPY TRADE 100 RETURN BECKONS - forex binary options trading system omni11

    76 PIP CHF JPY TRADE 100 RETURN BECKONS ~ forex binary options trading system omni11


    This trade took advantage of the False Breakout on the Pennant of the Daily Chart, following a short-lived Bullish breakout.  It provided a gain of 76 Pips over 4 Days as the pair returned inside of the large Consolidation on its way to the Support boundary. This latest trade was added confirmation of the accuracy of my Methodology which continues to produce above average trading gains. A Demo Account, which was opened in October (up 4%), now tracks my Live Account and will demonstrate how a 100% return is possible by January 2015 with only a small number of trades.

    There was an initial breakout long above the Resistance of the CHF JPY Pennant that pointed to the start of sharp gains for the Swiss Franc. It was expected to mirror the gains for the US Dollar against the Japanese Yen, following a Range breakout of 700 Pips. 


    DAILY CHART- USD JPY BREAKOUT

















    The Pennant setup on the CHF JPY was much larger in comparison and was also in an Uptrend. As such, when the Bull Candle breakout signal appeared above its Resistance, the distance of the breakout was expected to be much greater.



    DAILY CHART- CHF JPY PENNANT

















    DAILY CHART- CHF JPY BREAKOUT

















    As tempting as this appeared to be, there were two important Technical Factors that mitigated against entry;

     

    1. The Breakout Signal was a Large Candle 
        • (Weekly Technical Notes - August 25-29, 2014 & October 13-17, 2014)
           
      1. The Weekly Range was hit 
        • (Section 4 - Trading Manual)



      Given these reasons, a pullback was expected and we needed to wait on another signal to resume the breakout. Instead of this, however, the pair became volatile and eventually reversed to start the False Breakout back inside of the Pennant. 


      DAILY CHART - CHF JPY FALSE BREAKOUT 

















      With this turn and the Bearish signal given, the pair was expected to decline towards the Support once more. Entry then took place at a Counter Trend Line break signal on the 4 Hour Chart, with the Stop Loss placed above the high and the Limit set to the Near-End Value of the Pennant (Section 6 - Trading Manual).


      4 HOUR CHART- ENTRY SETUP


















      ENTRY SHEET SETUP (As Sent to Subscribers)

        
      ENTRY DATE
      TODAY, OCTOBER 6, 2014
      ENTRY TIME
      NOW
      ENTRY PRICE (LOWEST PRICE)
      113,20
      STOP LOSS
      114,07
      LIMIT ORDER
      112,20
      HOLDING PERIOD / FINAL DAY
      4 DAYS-  FRIDAY OCT.10, 2014
      DAILY TIME CHECK
      21 00 GMT



      At the end of the established Holding Period, the trade had not yet reached the Near End Value and thus had to be closed for 76 Pips instead of the targeted 100 Pips. 


      DAILY CHART- CHF JPY TRADE EXIT


















      DAILY CHART - LIVE ACCOUNT RESULT
      9-Pip Loss due to initial uncertainty about Trade Setup vis-a-vis Methodology

        























      With this result, the Demo Account generated its first win of just handful of trades needed for a 100% over the next few months.


      PROJECTED RETURN

      More info for 76 PIP CHF JPY TRADE 100 RETURN BECKONS ~ forex binary options trading system omni11:
       

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