Managed Forex What are The Pros and Cons - forex h4 trading system

Managed Forex What are The Pros and Cons ~ forex h4 trading system

The decision to invest in a managed Forex account can be a difficult one. This is a significant decision just like any investment you might make. The big difference in this investment compared to others is the leverage used.

The leverage is actually borrowed money that the broker has given you. Because you are borrowing money you give them the right to close any trade as they need to protect themselves. If you agree to this then sign up and start trading.

If you have made the decision to invest in the Forex market then there are three different accounts you can invest into: standard, mini, and managed. Each option has both pros and cons and it will be up to you to decide which account is best for your needs.

1. Standard. This type of account is the most common. Basically you have access to a major amount of currency. The worth is $100,000. You do not have to put the $100,000 down in order to do trading. Basically, you need $1,000 in the account for t his to work.

Pros Forex brokers will often times give extra benefits and services to this type of account. The potential gain is also the very high as you are investing a serious amount of money into each and every trade.

Cons Capital Requirement - Most brokers would require you to have a starting balance of at least $2,000 and others more than that. Potential to Lose - Just like you could make $1,000 a day, you could also lose that $1,000 in a day.

2. Mini - This account allows money to be moved in blocks or lots. The mini lot is roughly $10,000.

Pros Risk - The risk is much lower because you are using such smaller lot sizes. This is great for who have little to no experience trading the forex market. It also allows for you to test out trading strategies with less risk. Capital required - The amount to start an account can be as little as $250.

Con Low reward - Because you are risking such a small amount of money then of course the potential gains will be much smaller.

3. Managed Account - The managed Forex account is different than the others. You allow your money to be traded by a professional trader in the hopes that he can do a better job than you.

Pro Professional trader - A trader with years of experience will be trading your account giving you more time as you will not have to constantly watch the market.

Cons Fees - You will be required to pay a fee of 20% to 50% of all the gains made on the account each month. Capital - Most managed accounts will have a minimum investment amount of $5,000 to as much as $100,000.

It is always wise to research as much as possible to see which option best fits your needs. Always remember it is your money and you have to be the one watching over it.

By Ryan D. Moxie
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Poor risk management and how to avoid it - forex cot trading system

Poor risk management and how to avoid it ~ forex cot trading system

Poor risk management destroy your Currency trading profession and can cause pressure. You may possess the greatest Currency trading system on the planet should you not practice good risk management, but its going to fail. Losses are unavoidable with any Forex strategy. However, what for those who have risk management that is poor? You are going to blow your account out shortly and most likely do not have enough cash to make those gains when you began trading Forex, that youd dreamed.

They take on an excessive amount of dangerous overtrade and get blown out from the market. Many purchase a Forex system that is fantastic, make several trades which are way too large for his or her equity in the account. They lose virtually all their equity when the first few of the trades make a mistake. After this they stop and believe that Currency trading is a lie.

Capital preservation or capital growth,whats more significant for you personally? Obviously capital preservation. Learn how to survive to trade the marketplace another day. Imagine, your system makes just 10% yield per month having a danger of just 1%. I would like to clarify.

Imagine, there is a coin and you also have $100. Your buddy need to gamble $10 dollars for each flip of the coin. He and you consent to make 1000 flips. Youll be making $10,000. ideally in case you win all the 1000 flips Nevertheless, youve just $100 in your own pocket.

Youll have 90% probability of being wiped out in 1000 coin flips in case you wager $10 on each flip. In those 1000 flips, you simply want 10 losing flips to get rid of your $100. So, things to do? Let us say, you tell your buddy that you will be prepared for the stake but with just $1 per flip.

Just 5%. You see, you want 100 flips in row. This makes your own risk of losing just 5%. This really is just the way you should take the match of trading. Its risk management which is likely to decide how fast or how slow your equity grow. Your equity can grow very fast in the event you take an excessive amount of danger however, you should get blown out shortly also. Whatever, you must know it is not the pips which you make that decides how much you really make using a Forex strategy but risk management that decides how much youll find yourself making with those amount of pips.
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Forex Education Miss It and Miss Out - zero loss forex trading system

Forex Education Miss It and Miss Out ~ zero loss forex trading system

Forex Education: Miss It and Miss Out

At present, each expert needs careful instruction and hands-on preparing to be proficient and creative in whatever he or she does. 

Any expert employment will oblige you to prepare for a normal of four years. Specialists train for more than ten years. Legal counselors train for more than seven years. 

Each calling involves building a wide cluster of abilities and also a time of practicum. Subsequent to getting a hearty foundational information, a lions share of experts then branch out and move in one zone to end up authorities. This is not any not quite the same as a calling, for example, Forex exchanging. 

The fundamental refinement is that most Forex dealers dont consider training important. Most merchants today have not blazed their fingers in Forex instruction colleges. 

They are individuals who need to take alternate routes and bring home the bacon as fruitful dealers without taking as much time as necessary and push to get fitting and careful preparing on the most proficient method to exchange monetary forms. Disgrace on them! 

Here are about four key things you ought to contemplate to guarantee you get appropriate Forex instruction. 

1. Grow clear instruction objectives 

Preparing on money exchanging starts with a yearning to learn and a drive to end up fruitful as a broker. Appropriate Forex training requires duty and a lot of assets. 

You have to show devotion in thinking of the objectives you have to accomplish when participating in any Forex instruction. 

Do you have to hone your exchanging aptitudes considerably more? Do you need enough abilities to gainfully bank 100 pips for each exchange? The objectives you lay out are what will touch off you to endeavor to accomplish them. 

2. Put resources into a decent Forex instruction bundle 

It is imperative to say that not all Forex preparing assets are conceived rise to. The greater part of the material flooding the online space is gagging with "cushion" and filler", created by people who are preferable at phantom composition over at exchanging coinage. 

At the point when putting resources into a Forex instruction course, go for substance arranged by brokers who have a shown reputation of achievement in the Forex market. 

Do your individual verification to find out the significance and fittingness of the training bundle you are keen on. You can depend on criticism of different dealers or supports by different clients. 

3. Try not to abandon persistent training 

Much the same as some other calling in this planet, Forex instruction never stops. You can just quit teaching yourself the minute you hang your boots and demonstrate the business sector your back. 

The remote trade business sector is exceptionally alterable in nature. What worked a month ago may not work today. In this way, keeping up a ceaseless preparing system will guarantee you cruise high in your vocation as a Forex merchant. 

4. Keep records 

This one is a biggie! Individuals who have succeeded in Forex exchanging keep records. They take notes on their beneficial exchanges and losing exchanges, as they climb the expectation to absorb information. 

Carefully keeping records of each exchange will guarantee you exploit your additions and abstain from rehashing the same errors over and over. 

In spite of the fact that it can be requesting, the advantages of doing this will be obvious over the long haul. Thus, dont whisk it away, attempt it and youll see the outcomes.

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What You Didn’t Know About The Psychology Of Forex Market Trading – And How It Might Bankrupt You - forex king kong trading system

What You Didn’t Know About The Psychology Of Forex Market Trading – And How It Might Bankrupt You ~ forex king kong trading system

by: Joseph Plazo


When it comes to trading on the Forex market, winning is a matter of the mind rather than mind over matter. Any trader who’s been in the game for any length of time will tell you that psychology has a lot to do with both your own performance on the trading floor and with the way that the market is moving. Playing a winning hand depends on knowing your own mind – and understanding the way that psychology moves the market.

Studying the psychology of the market is nothing new. It doesn’t take a genius to understand that any arena that rides and falls on decisions made by people is going to be heavily influenced by the minds of people. Few people take into account all the various levels of mind games that motivate the market, though. If you keep your eye on the way that psychology influences others – including the mass psychology of the people that use the currency on a daily basis – but neglect to know what moves you, you’re going to end up hurting your own position. The best Forex coaches will tell you that before you can really become a successful trader, you have to know yourself and the triggers that influence you. Knowing those will help you overcome them or use them. Are you saying ‘Huh?” about now? Believe me, I understand. I felt the same way the first time that someone tried to explain how the mind games we play with ourselves influence the trades and decisions that we make. Let me break it down into more manageable pieces for you.

Anything involving winning or losing large sums of money becomes emotionally charged.

All right. You’ve heard that playing the market is a mathematical game. Plug in the right numbers, make the right calculations and you’ll come out ahead. So why is it that so many traders end up on the losing end of the market? After all, everyone has access to the same numbers, the same data, the same info – if it’s math, there’s only one right answer, right?

The answer lies in interpretation. The numbers don’t lie, but your mind does. Your hopes and fears can make you see things that just aren’t there. When you invest in a currency, you’re investing more than just money – you make an emotional investment. Being ‘right’ becomes important. Being ‘wrong’ doesn’t just cost you money when you let yourself be ruled by your emotions – it costs you pride. Why else would you let a loser ride in the hope that it will bounce back? It’s that little thing inside your head that says, “I KNOW I’m right on this, dammit!”

Bottom line: You can’t keep emotions out of the picture, but you can learn not to let them control your decisions.

To most people, being right is more important than making money.

Here’s the deal. The way to make real money in the forex market is to cut your losses short and let your winners ride. In order to do that, you have GOT to accept that some of your trades are going to lose, cut them loose and move on to another trade. You’ve got to accept that picking a loser is NOT an indication of your self-worth, it’s not a reflection on who you are. It’s simply a loss, and the best way to deal with it is to stop losing money by moving on – and really move on. Moving on means you don’t keep a running total of how many losses you’ve had – that’s the way to paralyze yourself. This brings us to the next point:

Losing traders see loss as failure. Winning traders see loss as learning.

Not too long ago, my twelve year old son told me that before Thomas Edison invented a working light bulb, he invented 100 light bulbs that didn’t work. But he didn’t give up – because he knew that creating a source of light from electricity was possible. He believed in his overall theory – so when one design didn’t work, he simply knew that he’d eliminated one possibility. Keep eliminating possibilities long enough, and you’ll eventually find the possibility that works.

Winning traders see loss in the same way. They haven’t failed – they’ve learned something new about the way that they and the market work.

Winning traders can look at the big picture while playing in the small arena.

Suppose I told you that last year, I made 75 trades that lost money, and 25 that made money. In the eyes of most people, that would make me a pretty poor trader. I’m wrong 75% of the time. But what if I told you that my average loss was $1000, but my average profit on a winning trade was $10,000? That means that I lost $75,000 on trades – but I made $250,000, making my overall profit $175,000. It’s a pretty clear numbers game – but how do you keep on trading when you’re losing in trade after trade? Simple – just remember that one trade does not make or break a trader. Focus on the trade at hand, follow the triggers that you’ve set up – but define yourself by what really matters – the overall record.
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Some riskless profit and why it exists - forex trading systems free

Some riskless profit and why it exists ~ forex trading systems free

Numerous commentators have pointed out the enormous yield spread between agencies debt (Fannie/Freddie) and US Treasuries.

Here are some links kindly provided by a reader: 10 yr Fannie/Treasury, 5 yr Fannie/Treasury, 10 yr Freddie/Treasury, and 5 yr Freddie/Treasury.

Currently their spreads are above 150 bp. Since the US government has nationalized Fannie and Freddie, this 150 bp is a riskless profit. As the blog Accrued Interest has pointed out, one reason this riskless profit exists is hedge fund deleveraging: nobody has the risk appetite to arbitrage this spread at a meaningful scale.

Brad Setser, a blogger at the Council of Foreign Relations, suggests that the Chinese government, who does have a lot of cash to benefit from this high yield, should go ahead and buy up these agencies debt. However, if you read the Chinese blogs and online comments, there is enormous internal pressure for the government to spend some of this money on infrastructure projects, social security, health care, etc., so I doubt that the Chinese government will have stabilizing the US mortgage market at the top of its agenda. As a result, arbitrageurs out there should have no fear that this opportunity will disappear any time soon.

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Data mining and artificial intelligence update - forex trading strategies that work 2013

Data mining and artificial intelligence update ~ forex trading strategies that work 2013

Long time readers of this blog know that I havent found data mining or artificial intelligence techniques to be very useful for my own trading, for they typically overfit to non-recurring past patterns. (Not surprisingly, they are much more useful for driverless cars.) Nevertheless, one must keep an open mind and continues to keep tabs on new developments in this field.

To this end, here is a new paper written by an engineering student at UC Berkeley which uses "support
vector machine" together with 10 simple technical indicators to predict the SPX index, purportedly with 60% accuracy. If one includes an additional indicator which measures the number of news articles on a stock in the previous day, then the accuracy supposedly goes up to 70%.

I did not have the chance to reproduce and verify this result yet, but I invite you to try it out and share your findings here. If you do so, you may find this new data mining product called 11Ants Analytics useful. It is an Excel-based software that includes 11 machine learning algorithms including the aforementioned support vector machines. It also includes decision trees which are sometimes quite useful in automatically generating a small set of trading rules from an input set of technical indicators. (Whether those rules remain profitable in the future is another question!) If you have tried this product, I would also appreciate your comments here.

(If you are a die-hard MATLAB fan, support vector machines are available in their Bioinformatics Toolbox, and classification and decision trees in their Statistics Toolbox.)
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Currency Converters And The Foreign Exchange Market Explained - forex h1 trading system

Currency Converters And The Foreign Exchange Market Explained ~ forex h1 trading system

Vast amounts of money are being poured into the foreign exchange money each year. It has been reported that many billions of dollars are benefiting investors all over the world- making many the fortune of a lifetime. But before a lifetime on easy street can be obtained, theres much to learn. But not to worry, an investors life is made easier thanks to forex calculators.

A foreign exchange calculators most basic use is to determine what may or may not be a good investment. One can easily find updated rates on many different currencies, past rates, and even projections on how the rates will continue to fare. Armed with this knowledge, investors will be able to make a huge sum of money off each bit of money invested- assuming market conditions are pristine.

When investing in another currency, the investor hopes that the currency being converted from raises in value so that converting back will create a large return on the initial investment. Of course there are other ways of making money in the foreign exchange market, but this provides some of the quickest and biggest gains, depending on the investment amount.

The foreign exchange market uses currency as its basis for working- meaning there are many different ways to work the market to ones advantage. Doing so will cause need for a multi-purpose forex calculator that will be able to display multiple currencies at a time in relation to a specific currency. Some advanced calculators even show results starting with the most popular currencies, so as to better appeal to the common investor.

The next stage in the process is to track all currencies that an investor is watching. After all, if a currency increases in value over time, isnt it safe to say it will continue to do so in the near future? This isnt always true, but more often than not, this simple rule makes investors quite a bit of money. Foreign exchange calculators should be able to track several different currencies for investors in this case, which usually requires a user registration for tracking purposes.

As a final note, the perfect foreign exchange calculator should be able to make use of newer technologies for a quick and simple solution to an investors problem. Technologies such as AJAX or Java should be used, where results can be displayed quickly and effectively- even without a page refresh. This is in comparison to technologies such as PHP, where the process can be lagged down by the constant need to refresh the page after each calculation.

Closing Comments

The foreign exchange market is a very risky game. If one is to play it, it should be done so in a wise manner. There is a need for a handy calculator for foreign exchange market calculations and tracking methods, not to mention an effective way to check values without and delay or latency. In obtaining such a calculator, odds of making a successful return on investment are much improved, and investors are better off as a result.

By Chris Channing
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Forex strategies and how to trade forex profitably - trading forex correlation system

Forex strategies and how to trade forex profitably ~ trading forex correlation system

Forex trading is the business of selling and buying international currencies against one another, for example buying the Euro at 1.36 US Dollars, then selling it back at 1.37, buying low, selling high and making a profit. To trade fx and make a profit you should find a few of the many Forex strategies, that traders use to trade fx. The main issue with these Forex strategies is finding one that works, and one that you can learn and cope with.

Although there are a number of profitable strategies available, none of them can trade and win every single trade, no fx strategyis one hundred percent successful and you should not expect them to be. To trade successfully is to simply win more trades than you lose, or to profit from your winning trades to a larger extent than your losing trades do. This is known as your risk/reward ratio and varies between each strategy.

Some Forex strategieswill use the principal of winning a high percentage of the trades, but each trade is only profitable by a small amount, or a few pips as it is referred to. These Forex strategies are known as scalping methods, and the principal is that, you will win most trades as you are looking to take small quick profits. The problem with these Forex strategies is that you must control your loses, otherwise you may cancel out ten winning trades with one losing one, that is not a good way to trade fx.

Other strategies, will take the opposite approach to the risk reward ratio. Trading Forex in this manner means looking to make large amount of pips on a winning trade, and using small stop loses, and only losing a few pips on the losing trades. Using these types of strategies, means you can trade profitably by winning less than half of the trades, depending on the ration, you may only need to win twenty percent of your trades to trade fx and turn a profit.

Whichever way you decide to trade Forex, whichever of these Forex strategies you use, it is still going to take time, patience, and dedication to master the art form that is trading. To trade Forex is not a science, it is not gambling either, but can feel like it, so keeping control of your emotions is a common problem that must be overcome to trade Forex successfully.

If you are just starting to learn how to trade Forex, then there is a lot of information on the internet describing peoples different Forex strategies. Some advice is free and freely available, some people will sell you their Forex strategies so you learn hot to trade Forex, the same way they do. It is difficult to say which is best, there are some golden rules on how to trade Forex, but no guarantees, it is an art form in many ways, and some people say that to trade Forex well, you must adapt your own style of Forex strategies, just is suitable to your personality.

So if you are going to trade Forex, take your time and do your due diligence. Research as many Forex strategies as possible, and take your time with demo accounts to practice with, before using real money.

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A platform a shareware site and some courses for quant traders - forex traders secret strategies

A platform a shareware site and some courses for quant traders ~ forex traders secret strategies

I mentioned in various places that Alphacet Discovery is an industrial strength integrated platform for backtesting and implementing quantitative trading strategies. But of course, it has many competitors, one of which is a relatively new company called Deltix. Deltix has the distinction of offering a full Matlab interface, which is convenient if you are already a Matlab programmer. (Full disclosure: I previously have a consulting relationship with Alphacet, but have none with Deltix.)

There is also a new website for sharing trading strategy software called Quantonomics. In the words of its founder Joshua, the goal is to "connect programmers and stock traders". Joshua also told me that he will create a custom application on his site for any of you readers as a gift!

A colleague of mine in Singapore, Dr. Li Haksun, who was previously a quant with UBS and BNP Paribas, is offering a course on quantitative trading strategy in July. It covers more theoretical concepts than my own courses: e.g. hidden markov model, stochastic control, and Kalman filters are included.

And of course, my own workshops on Backtesting and Statistical Arbitrage will be offered again in London next week.
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CIO Magazine Innovation and IT Strategy blog - forex 50 pips trading system by rita lasker

CIO Magazine Innovation and IT Strategy blog ~ forex 50 pips trading system by rita lasker

Ms. Elana Varon who writes the CIO Magazines Innovation and IT Strategy blog quoted me today in saying that some quantitative investment models are over-engineered. This old article of mine is an elaboration of my view on this.


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Online Stock Market How Trade In Stock and Forex - professional forex trading system free download

Online Stock Market How Trade In Stock and Forex ~ professional forex trading system free download

For someone who has no stock market experience, but wants to invest some capital in the stock markets, it can be difficult to know where to start. The important thing is, to not let that hold you back, as there are many options or paths you can take to invest your money in the stock market and find your stock trading picks.

The most important thing to do is to answer some basic questions before you make your decision on which investing path to take. Some important points for consideration are:

    How much time do you have to commit?
    How much money do you want to invest?
    Do you want to learn how to invest in the Stock Markets?
    What Leverage do you want to trade with?
    What type of instruments do you want to trade? Stocks, Options, Forex?

Using a Managed Fund Portfolio

Using a managed fund can be a solution for investors who have very little time to devote to stock market investing.

Essentially with a Managed Fund you open an account and deposit your investment capital into a larger fund account, which is managed by a professional Fund Manager.

The fund manager is responsible for buying and selling a diversified range of stock and other investments in different classes, and has access to a large selection of market research. There are a large range managed funds that are focused on different objectives and strategies, so its important to choose one that fits your purpose.

Key points for Managed Funds:

    Largely diversified portfolio
    Usually the minimum investment amount of $1000.
    Like all investments, managed funds do not guarantee returns.
    There are associated costs with participating in managed funds.
    Typically expect a reduced performance, usually closely mirroring the market average.
    Managed Funds dont give you control over which stocks your money is invested.

Using a Stock Trading Picks Service & Auto-Trading Services.

There are many Stock Trading Picks Services available out there, all of which can offer a range of different services and strategies, some of which include:

    Stock Trading
    Stock and Option Trading
    Option Spreads recommendations
    Forex Trading Services
    Commodity Trading Services.

Usually an investor would subscribe to a stock trading service and pay a monthly or annual fee, for which the investor would be emailed Entry and Exit notification of Stock Trading Picks.

The investor can then execute the trades in his/her own trading account, for which the investor has total control over what and how trades are executed. Some services and brokers offer an Auto-Trading Service, which means that the trade picks are emailed directly to your broker, which will automatically be execute as per the trade instruction, without any effort from the investor.

This can be a handy service for people who have little time to devote to stock market investing, or who are asleep when the market is open.

Its important to be aware that quality of some services vary quite a bit, for example some only offer trade entry notification for stock trading picks, and do not give trade exit notifications. Whether youre new to trading, or do not have much time to watch your positions, its just as important to know when to exit your position as well as enter.

Finding your own Stock Trading Picks

Some investors just arent comfortable with relying on other people to make investment decisions on their hard-earned money. If you have the time to devote to stock market investing, and want total control over your investments, finding your own stock market picks is both rewarding and fulfilling.

Of course if you not already an expert in the stock market, its recommended to educate yourself about the stock market and decide on a trading style, method, and develop a trading plan.

There are many ways in which you can filter down to your chosen stock market picks, and using some stock scanning software can help you quickly zero in on stocks that fit you stock trading criteria.

With a bit of stock market knowledge you find high probability stock trading picks again and again, grow your trading account, and far exceed overall market performance.
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Forex Trading and Risk Return ratio - forex keltner channel trading system

Forex Trading and Risk Return ratio ~ forex keltner channel trading system

by: Andrew Daigle


Forex trading is fast becoming the top method of making money on the internet and plenty of average people are trying their hand at becoming millionaires. For most people, forex trading is a much needed source of a second income, to supplement their current single income from their main profession. However, the true potential to become very wealthy is not tapped by most such investors and they earn mere pennies on the dollar, compared with what they could be earning. While everyone has their own forex currency trading system, this will be in proportion to your risk appetite and will only bring the returns that you strive for.

While there are many ways to invest your money in currency, most people play safe by either investing small amounts or spreading their money very thin across the various currencies they are invested in. This makes for a very small return but practically no risk potential, since the bases are mostly covered so that if one currency depreciates, the other appreciates and the losses are minimal. However, clearly this will never make the forex trader a millionaire.

Life is short, and most forex trading millionaires made their money fast off the forex market. These individuals are generally highly leveraged, because they know that money makes money, and the more money they invest, the greater the risk and the greater the potential reward. Also, betting on unlikely currencies is risky and can have a huge potential upside.

So what exactly will leveraging yourself mean for you? You can start with a portfolio, meaning that you put your investment towards buying a part of the forex trading. Then, you buy shares of the forex trading the world over, depending on what countries appeal to you. The prices of these shares may rise slowly to increase your portfolio, and you are still playing safe. Once your total portfolio value goes over the 5000 dollar mark, you as a forex trader can apply for something known as a console, which now puts you in the position to act as an agent for others. At this point, you can process exchanges for small investors who want to buy and sell currencies through you. For each transaction processed, you will earn a fee of 6% and this can roll into your portfolio, increasing further, making your status as a forex trader more credible.

Other than an unlikely event such as a war or natural calamity, nothing on the forex market will give you a sudden unexpected windfall. Do not expect to become a millionaire over night. You will have to plan and strategize, and most importantly, leverage yourself, to truly make a lot of money. The forex market will generally move like the stock market, in small digits and only when you have plenty of money spread out on the forex market do you stand a chance of making a great deal of profit.

While this type of trading is not for the faint hearted, experience in forex trading will bring some confidence to your forex trading strategy, especially as you learn which systems work for you and which dont. As your level of confidence grows, the process will seem much less daunting. However, it is great to be cautious and be sure of any risks you take. That said, do remember that millionaires are always highly leveraged in the forex market – take calculated risks.
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Momentum strategies in futures and forex - forex strategy trader software

Momentum strategies in futures and forex ~ forex strategy trader software

I have long found that it is easier to find good (i.e. high Sharpe ratio) mean-reverting strategies than good momentum strategies. Partly, that is because I was mainly a stock trader instead of a futures/currencies trader, and individual stocks mean-revert most of the time. There are exceptions, such as after special corporate events such as earnings announcements, and I have tested momentum strategies based on these events. But the success of even these event-driven strategies has been uneven, especially since more traders become aware of them.

Now that I am focusing more on trading futures and currencies, I have gradually been introduced to the world of momentum investing. There is a good book in this area that deserves to be better known: Joe Duffys The Ultimate Trading Robot, which is an almost step-by-step guide to constructing futures trending strategies that rely on prices alone. Another example would be the London Breakout strategy mentioned by our reader Bernd in the comments here. After studying these examples, I realized why my previous, rather desultory, search for momentum strategies in the futures and FX markets had been in vain: the overnight gap in these markets seems critical. For futures, the overnight gap is obvious, but in the case of the London Breakout strategy, for example, the trader has the task defining for herself what the optimal closing and opening times are in order to compute the gap. Intraday trend without an overnight breakout does not seem persistent enough to be traded profitably. I also wonder if there is a more elegant (i.e. mathematical) way to quantify such breakout phenomena without using the traditional technical indicators.

If you know of ideas for good momentum strategies, you are most welcome to share and discuss them here!
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Trending Markets and Retracements - trading system forex elite section

Trending Markets and Retracements ~ trading system forex elite section

First and foremost, if the market you like to trade is not always trending on a higher timeframe like the Daily chart, dont worry. Due to the fractal nature of liquid financial markets, the characteristics of trending price action tend to look the same on all timeframes. Therefore, we might be in a corrective or consolidation sequence higher up, but when a high Reward/Risk setup is not available, one of those seemingly insignificant legs of the correction as seen on the H4 chart might actually be a sound short-lived trend, which is good enough for a scalping trade, when viewed on the M5 or M1 charts.


Identifying A Trending Market
So what do we mean by a trend? Its an extremely simple and important point, but one often forgotten: a down trending market creates consecutively lower lows and lower highs over time. Conversely, an up trending market creates consecutively higher highs and higher lows over time. So what we want to look for, before we even bother with indicators like Moving Averages, is Swing Points in succession that satisfy this relationship, as illustrated below.

Another way to identify trending markets without any technical indicators is to look for those legs in price action that have an almost linear look to them. That is, those that move decisively with little interruption, and covering a relatively large amount of ground in a short period of time. When a sequence of lower lows and highs, or higher highs and lows, are strung together, it is likely that the market is trending.

Candlesticks can also be used to enhance the identification of trending markets. For instance, there are more down closes in a downtrend (red), and more up closes in an uptrend (green), as shown in the chart below.

Identifying Retracements
The term retracement (or sometimes referred to as a correction or pullback) generally refers to any type of counter-trend price action that interrupts the broader flow of the market for a defined period of time without reversing it on the degree of trend in which it is encountered. Put simply, we are looking for instances of where the market is moving in the wrong direction relative to a trend, recovering a portion of the preceding impulsive movement, but without exceeding its startiog point.

The simple and practical way to explain why the market behaves this way is that at critical support and resistance levels, some portion of the market is taking profit. For example, as numerous traders cover shorts in a downtrend (effectively going long) at or near a confluence of support targets, selling pressure will disappear for a period of time before the market consolidation process is complete allowing for a return to trend. The traders who were more bearish than those covering their short positions sell into the buying, and away we go again.

Unlike the trend of the market, retracements have a very different appearance. In addition to recovering only a portion of the preceding impulsive movement, they often feature a lot of overlap in terms of the smaller waves comprising them, and often (but not always) unfold in sequences of threes. The important point is that without having a method of identifying these patterns, a lot of traders will be in despair at all the supposedly random noise and compressed volatility theyre seeing, hoping a trending market will return, but having no idea when.

The following diagram illustrates a typical contrast between these two varieties of price action, which we can call impulsive (the often linear looking sequences aligned with trend) and corrective (the three-wave overlapping sequences which temporarily interrupt the trend). The downtrend is reflected in the relatively smooth and brisk movement of the down leg to the left. By contrast, we can see the strained, overlapping progress of price action once a temporary bottom is made (at a price level that represents one of those confluences of support mentioned above).

In this example, we have plotted a Fibonacci retracement level which shows that at the point where the three larger subdivisions of the correction are finished (at the dashed horizontal line), the whole sequence has retraced - to a precise degree of accuracy - the Golden Mean ratio of 61.8%, a fairly standard proportion for Fibonacci retracements.

Putting It Together
So how do these two concepts - trending markets and retracements - combine? To put it simply, it is at the expected point of termination of a retracement where were looking to jump into the market in the direction of a trend at higher degree. So a retracement slanted in the sideways-to-up direction against a valid downtrend is the rally were looking to sell. Conversely, a retracement slanted in the sideways-to-down direction against a valid uptrend is the dip were looking to buy.

We dont have to worry that on the hourly chart, for example, the retracement doesnt have the same look as the illustration above - often, pullbacks are briefer and simpler in construction, particularly in a fast-moving market. The key is that were keeping the trend in mind, looking to trade only in that direction, and focusing our attention on finding a confluence of support or resistance that strongly suggests the end-point of the retracement.
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74 PIPS FROM EURO CAD PROVIDES A 27 RETURN AND 567 PIPS FROM 9 TRADES - forex never lose trading system

74 PIPS FROM EURO CAD PROVIDES A 27 RETURN AND 567 PIPS FROM 9 TRADES ~ forex never lose trading system

EURO CAD provided us with a smaller-than-expected but positive result on Tuesday, due to the lower liquidity conditions of the Christmas Holidays. Our original target of 150 Pips could not be met under these circumstances, requiring us to exit for 74 Pips at the end of our specified Holding Period. Nevertheless, the strong gain had a significant influence on our overall Rate of Return, which now stands at 27.4% since July of this year. With over 500 Pips from only 9 trades, we are only 3 trades away from the 1000 Pip mark and a 50% Rate of Return. After meeting this short-term target, we would then need only 4 more trades for a remarkable return of 100%.

This pair began to decline following a False Breakout Reversal at the Resistance of the Range on the Daily Chart. As with all False Breakouts, a move to the end of the boundary was expected.


DAILY CHART

FXCM used for Entry Signal based on the New York Close Candle

The move was also taking place within a Downtrend that started with the break of the Trend Lines of the previous Uptrend.


DAILY CHART

The signal that we used to confirm that this trade should be taken was the 2nd bearish candle as it was deemed to be a Normal Candle- the Candle that we obey for our entries (Section 8 - “Consolidation Trading on the Forex Market - A Complete Trading System”). After determining that it met our criteria for trading within Consolidations, our Entry Setup was done on the 4 Hour Chart...



4 HOUR CHART

An Entry Order was used in this trade as a Market Order would have required a Stop Loss that exceeded our maximum of 90 Pips for entry based on the 4 Hour Chart. After pulling back to trigger our trade, the market then meandered sideways over the next few days. With trading activity and liquidity limited, we exited for the 74-Pip gain at the end of our Pre-Determined Holding period.

DAILY CHART - LIVE ACCOUNT RESULT

Dukascopy used for Live Trades

With this latest trade, our Rate of Return table is now closer to the mid-way point of our Medium Term goal of 100%.

RATE OF RETURN FROM METHODOLOGY

5% Risk Per Trade, 100-200 Pips Target per Trade; No Trading done in August

Summarizing these results, an average of 63 Pips have been made on each trade, supported by a fairly high rate of success.

SUMMARY OF RESULTS

These gains were due in large part to the last 8 trades, which steadily made up for the initial loss of 100 Pips that may have shocked my early Subscribers!!

SUMMARY OF RESULTS

The Demo Account which tracks the Live Account trades was not to be left out. The trade pushed the Return to 22% after only 5 trades.

DAILY CHART

DEMO ACCOUNT RESULT

Having started in October, the results on this Account are equally encouraging (verified at Myfxbook http://www.myfxbook.com/members/DRFXTRADING/duane/1079693)

RATE OF RETURN - FXCM DEMO ACCOUNT

SUMMARY OF RESULTS

The results from the Methodology at this stage bode well for what is possible within a few months time. By only targeting the highest paying opportunities that have a high probability of success each month, your chances of steady, long-term gains with limited draw-down are greatly enhanced. Nevertheless, given the inevitability of losses, we always need to remain confident in our strategy despite setbacks along the way. Once you have tested your strategy successfully on a Demo Account over a reasonable period of time (at least 6 Months), you can be more assured that the gains will outnumber losses by a reasonable margin. This will allow you to achieve strong Rates of Return over the Long-Term, with fewer losses. 

________________________________________

________________________________________

Duane Shepherd

(M.Sc. Economics, B.Sc. Management and Economics)

Currency Analyst/Trader

Contact: shepherdduane@gmail.com

Twitter: @WorldWide876

Facebook: DRFXTRADING
Website: www.drfxswingtrading.com

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Forex Autopilot Software A Time Saver And Minimizes Risk - fxsoni forex system trading indicators

Forex Autopilot Software A Time Saver And Minimizes Risk ~ fxsoni forex system trading indicators

If time is of the essence for you, then automated forex trading is the answer. The latest trend in the foreign exchange market is in forex robot software, an incredible device that takes the time commitment out of foreign investment.

This software operates based on pre-designed algorithms. These highly advanced algorithms allow for trading to be a completely automated process. This software is obviously available with a range of functions that are designed by experienced manufacturers and designers. You can find these online.

The forex robot software eliminates the guesswork out of trading and it is also designed to work for all level of traders with different account size.

Clearly the automated forex trading saves time and effort, two commodities people cannot afford to waste. As soon as a trader programs the forex robot software, it proceeds to invest on behalf of the investor without further input on a continual, 24-hour basis.

Sometimes crucial deals are overlooked during manual trading. This is the type of unfortunate situation that forex software prevents due to its continuous trading.

For those of you who experience trouble with trade management, forex robot software will prove especially appealing. It facilitates decision-making even to the point of closing a contract.

The forex robot software deals in several foreign currencies. Market data and financial reports are submitted with real time and this information is available whenever it is requested.

The forex trade is ultimately within the traders hands however, since he or she programs the software according to specifications then allows the system to conduct transactions. Although there will always be a risk factor in foreign investing, forex robot software minimizes risk and assists with overall maximization of profits.

By Richard U. Olson
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Forex Trading Calculating Profit And Loss In Foreign Currency Trading - kino forex trading system

Forex Trading Calculating Profit And Loss In Foreign Currency Trading ~ kino forex trading system

by: Gregory DeVictor


The foreign exchange market, or Forex market, is an around-the-clock cash market where the currencies of nations are bought and sold. Forex trading is always done in currency pairs. For example, you buy Euros, paying with U.S. Dollars, or you sell Canadian Dollars for Japanese Yen. The value of your Forex investment increases or decreases because of changes in the currency exchange rate or Forex rate. These changes can occur at any time, and often result from economic and political events. Using a hypothetical Forex investment, this article shows you how to calculate profit and loss in Forex trading.

To understand how the exchange rate can affect the value of your Forex investment, you need to learn how to read a Forex quote. Forex quotes are always expressed in pairs. In the following example, your pair of currencies are the U.S. Dollar (USD) and the Canadian Dollar (CAD). The Forex quote, USD/CAD = 170.50, means that one U.S. Dollar is equal to 170.50 Canadian Dollars. The currency to the left of the "/" (USD in this example) is referred to as base currency and its value is always 1. The currency to the right of the "/" (CAD in this example) is referred to as the counter currency. In this example, one USD can buy 170.50 CAD, because it is the stronger of the two currencies. The U.S. Dollar is regarded as the central currency of the Forex market, and it is always treated as the base currency in any Forex quote where it is one of the pairs.

Lets go now to our hypothetical Forex investment to show how you can profit or come up short in Forex trading. In this example, your pair of currencies are the U.S. Dollar and the Euro. The Forex rate of EUR/USD on August 26, 2003 was 1.0857, which means that one U.S. Dollar was equal to 1.0857 Euros, and was the weaker of the two currencies. If you had bought 1,000 Euros on that date, you would have paid $1,085.70.

One year later, the Forex rate of EUR/USD was 1.2083, which means that the value of the Euro increased in relation to the USD. If you had sold the 1,000 Euros one year later, you would have received $1,208.30, which is $122.60 more than what you had started with one year earlier.

Conversely, if the Forex rate one year later had been EUR/USD = 1.0576, the value of the Euro would have weakened in relation to the U.S. Dollar. If you had sold the 1,000 Euros at this Forex rate, you would have received $1,057.60, which is $28.10 less than what you had started out with one year earlier.

As with stocks and mutual funds, there is risk in Forex trading. The risk results from fluctuations in the currency exchange market. Investments with a low level of risk (for example, long-term government bonds) often have a low return. Investments with a higher level of risk (for example, Forex trading) can have a higher return. To achieve your short-term and long-term financial goals, you need to balance security and risk to the comfort level that works best for you.
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A reader comments on trading using Excel VBA and Factor Model - forex swing trading strategy youtube

A reader comments on trading using Excel VBA and Factor Model ~ forex swing trading strategy youtube

Thoughtful comments from a reader John S. from the UK on his experience with trading technology and models:

"I have been developing my own personal automatic trading systems using Excel VBA and based on rules I have developed over the years as an active private trader investor using both technical and fundamental data analysis.

One of the key merits in adopting an automatic trading system approach that has helped me is to avoid the temptation for manual interference and thereby improving profitability by maintaining consistency. I have found the challenge of developing a successful system very rewarding from a personal perspective as I recognise that there are many that have tried and failed. However one problem I have encountered is my ongoing desire to regularly modify and improve the system which I have found can become counter productive as there is a real danger that system development becomes an end in itself! I just cant seem to stop tinkering as soon as I come up with a new idea or feature!

One advantage of using Excel VBA that I have found is that it is inherently flexible as it facilitates the processing of data which can be important especially when using fundamental data as part of the system. In this respect I recognise that every trader is trying to build in an edge that will make the system more profitable. I have noticed that many traders seem to only focus on price by trying to seek an edge by looking at special indicators or combination of indicators etc. Combining price data analysis with a Factor Model approach is a challenge which is ideally suited Excel VBA as it can be easily used to process both fundamental and macroeconomic data into a form that can be integrated with price data analysis.

I recognise from your book that Matlab is more powerful than Excel VBA and may be just as flexible in integrating fundamental and macroeconomic data but I just wanted to draw your attention to benefits I have found using Excel VBA which may suit those who like myself are more comfortable in using Excel VBA and are reluctant to change. Other features that can be exploited that I have found helpful when back testing are automatically producing Price Charts that incorporate Entry and Exit points which provides visual reassurance that the system is working as intended as well as generating automatic Word reports recording key output for future reference.

I am sorry if I sound too much like an advert for Microsoft!"

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Hedge fund transparency and barometers - forex trading strategy secrets

Hedge fund transparency and barometers ~ forex trading strategy secrets

Jim Liew of Alpha Quant Club recently posted an interesting article about the increasing demand for transparency of hedge fund strategies by institutional investors, so much so that they are essentially willing to invest only in managed accounts with real-time trades and positions updates. This is, of course, bad for fund managers, since not only can the investor reverse-engineer the simpler strategies from such knowledge, they can also piggy-back on the trades, thus paying a much smaller portion of their profits as performance fee. One might be tempted to think that since the investors are going to reverse-engineer the product anyway, why not just make it as simple and as generic as possible, and charge a much lower fee than the usual 2-20 (which hopefully will attract a much larger investor base), so that the main value to the investor is just convenience and not the originality of the strategy?

In fact, Jim wants to do just that. He proposes to construct hedge fund "barometers", essentially prototypical hedge fund strategies running in managed accounts. This would work well if these barometers have large enough capacities such that the performance can hold up even when a large number of investors sign up. From the investors point of view, this is a trade-off between investing in a truly outstanding, high-performance strategy while paying a large fee and losing "transparency", versus just investing in a generic strategy that may still outperform the broad market. For some institutional investors, this might just be the bargain they are looking for.
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Seasonal trades in natural gas and gasoline futures - forex day trading strategies work

Seasonal trades in natural gas and gasoline futures ~ forex day trading strategies work

In my book, I mentioned 2 seasonal trades in natural gas and gasoline futures that have been consistently profitable for 14 years. (Mentioned here and here also.) And not only in backtest: I paper-traded them in 2006, and actually traded them in 2007-8, and all 3 years were profitable. How did they fare in this recession year? Quite poorly.

Depending on your exact entry and exit points, the gasoline trade lost about $2,500 per contract of RB. The natural gas trade lost about $7,700 per contract of NG.

You may have heard that natural gas price is at a 6-year low. In fact, we are not seeing any increase in industrial demand for natural gas. Apparently, somebody has forgotten to tell the nations industrialists that an economic recovery is supposed to be under way.

Will I enter into these seasonal trades again next year? You bet I will.
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