Pairs Trading Workshop in Hong Kong - forex trading trendline strategy

Pairs Trading Workshop in Hong Kong ~ forex trading trendline strategy

For my readers in Asia, I will be conducting a pairs trading workshop in Hong Kong on March 10-11. This workshop is organized by the Technical Analyst magazine and is similar to the one I gave in London last year.
However, I have added a few useful insights based on audience feedback. As always, no prior knowledge of Matlab or advanced statistics is assumed. The numerous in-class exercises should be sufficient to bring your Matlab programming skills up to speed.

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Picking up nickels in front of steamrollers - forex trading eur usd strategies

Picking up nickels in front of steamrollers ~ forex trading eur usd strategies

When I was growing up in the trading world, high Sharpe ratio was the holy grail. People kept forgetting the possibility of "black swan" events, only recently popularized by Nassim Taleb, which can wipe out years of steady gains in one disastrous stroke. (For a fascinating interview of Taleb by the famous Malcolm Gladwell, see this old New Yorker article. It includes a contrast with Victor Niederhoffers trading style, plus a rare close-up view of the painful daily operations of Talebs hedge fund.)

Now, however, the pendulum seems to have swung a little too far in the other direction. Whenever I mention a high Sharpe-ratio strategy to some experienced investor, I am often confronted with dark musings of "picking up nickels in front of steamrollers", as if all high Sharpe-ratio strategies consist of shorting out-of-the-money call options.

But many high Sharpe-ratio strategies are not akin to shorting out-of-the-money calls. My favorite example is that of short-term mean-reverting strategies. These strategies not only provide consistent small gains under normal market conditions, but in contrast to shorting calls, they make out-size gains especially when disasters struck. Indeed, they give us the best of both worlds. (Proof? Just backtest any short-term mean-reverting strategies over 2008 data.) How can that be?

There are multiple reasons why short-term mean-reverting strategies have such delightful properties:

1. Typically, we enter into positions only after the disaster has struck, not before.
   
2. If you believe a certain market is mean-reverting, and your strategy buy low and sell high, then of course you will make much more money when the market is abnormally depressed.
3. Even in the rare occasion when the market does not mean-revert after a disaster, the market is unlikely to go down much further during the short time period when we are holding the position.

"Short-term" is indeed the key to the success of these strategies. In contrast to the LTCM debacle, where they would keep piling on to a losing position day after day hoping it would mean-revert some day, short-term traders liquidate their positions at the end of a fixed time period, whether they win or lose. This greatly limits the possibility of ruin and leaves our equity intact to fight another day in the statistical game.

So, call me old-fashioned, but I still love high Sharpe-ratio strategies.
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38 PIPS GONE IN 277 PIP EURO USD TRADE - forex end of day trading system

38 PIPS GONE IN 277 PIP EURO USD TRADE ~ forex end of day trading system

The EURO USD has been steadily declining over the last several weeks following the turn at the Resistance of its large Pennant Consolidation. There have been very few pauses or pullbacks in this strong downtrend that now has its sights set on the Support boundary of this Pennant, 350 Pips away. Trading these slow trends can be very profitable and with a short time remaining before that boundary is hit, the current trade opened on this pair could provide a very large return in October.

The recent pullback at the Resistance of this Pennant setup can be seen in the Daily Chart below. This large Consolidation was actually formed following the sharp gains for the USD during the period of risk-aversion related to the Financial Crisis.


DAILY CHART - PENNANT CONSOLIDATION

DAILY CHART- OPEN TRADE

To take advantage of this strong trend, entry took place shortly after the currency pair broke a Counter Trend Line (CTL) to resume the trend. The Stop Loss was placed at the Resistance of the Pennant on the 4 Hour Chart and the target set to just above the Support Line.


4 HOUR CHART

As you can see from this chart, someone could actually enter another short position now following this recent U-turn and strong Bearish Candle signal. The Stop Loss would be place above the high of this CTL break.

The strong inverse correlation between the EURO USD and the USD CHF can also be used to capture additional profits. The USD CHF is now headed to an Outer Downtrend Line in a slow steady uptrend that could provide some additional pips when that target is hit.


USD CHF - RALLY TO OUTER DOWNTREND LINE 

DAILY CHART - UPTREND 

These targets could be hit within the next two weeks and can provide large gains for the patient Swing Trader.

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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 

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The risk a trader can take in a single trade - creating forex trading system

The risk a trader can take in a single trade ~ creating forex trading system

It is a depressing fact that their trading accounts are blown up by 90% of beginner Forex dealers in their very first month of trading. The astonishing thing is, this occurs regardless of whether they possess a Currency trading strategy that is money-making or not! Certainly, there is more than having a prosperous Currency trading strategy to making money in Forex trading. What most beginner Forex dealers do not understand is that when you are only getting started in Forex, having a Forex cash management strategy that is great is much more significant than having a system with enormous yields. By the conclusion of the short article, you will learn the best way to use the best Forex cash management techniques for yields that are consistent, safe out of your system.

The Very Best Forex Cash Management Strategy

You will not blow up your trading account if youve a great Forex money management strategy even for those who possess the worst Currency trading system on the planet. On the flip side, with no Forex cash management strategy that is great, you may possess the greatest Currency trading system on the planet plus it might not even matter. You should know how significant its to take care of your capital when you are trading Forex before we get to the nuts and bolts of cash management in Forex.

Believe it or not believe it, the greatest Forex cash management plan would be to dial your own risk per trade manner down to between 2-4% of your capital. Here is the most effective cutting edge Forex cash management strategy that hedge funds as well as all the large banks apply for each of their dealers, and that I strongly advise that you just use it too.

A Good Example Of Great Cash Management In Forex

Heres the way that it works. Go with 2% in the event you are extremely conservative, and go with 4% in the event you are extremely competitive. Lower or any higher and you are actually throwing away money. Meaning that for those who own a stop 20 pips away from your entrance, then you definitely are permitted to choose a maximum of 1 total contract.

Clearly, reinvesting your profits will let you leverage the power of compounding returns, while taking your gains WOnt. By reinvesting your profits, your profits can triple in annually! In case you choose to reinvest your profits, then youwill need to upgrade your place sizes at routine times as well as your threat per trade allotment. Id recommend upgrading your place sizes every 5-10 trades youre having the most effective compound increase of your trading account. It is vital that you keep in mind that you simply are still going to need a proven, Currency trading strategy that is profitable to create a Forex income that is consistent. The greatest Forex cash management strategy is not going to make a poor trading process rewarding, but with no great Forex cash management strategy it is not possible to create a long-term Forex income. Make sure you get both of both of these Currency trading components that are vital set up, and also you could be certain of your Currency trading success!
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GBP AUD MAJOR DOWNTREND REVERSAL IN SIGHT - stealth forex trading system review

GBP AUD MAJOR DOWNTREND REVERSAL IN SIGHT ~ stealth forex trading system review

OVERALL SCENARIO

• At End of a Major Uptrend;
• Broken Inner & Outer Trend Lines;
• Within a Large Pennant Consolidation;
• Possible Rally to Resistance;
• Likely Break of Support to Start Downtrend

  

CHART 1 - END OF MAJOR UPTREND

POSSIBLE SHORT-TERM SCENARIOS

• Rally to Pennant Resistance after/without hitting Support;
• Break of Pennant Support to Start New Downtrend;

CHART 2- PENNANT CONSOLIDATION

 LONG-TERM SCENARIO

• Support Likely to be Broken;
• Major Uptrend has ended, Trend Lines Broken,Large Pennant Formed;
• This is the typical setup for a new, major Trend Change;

ACTION RECOMMENDED

• Wait for Strong Bull Signal now or at Support to Trade to Resistance;
• Wait for Strong Bearish Break to start Downtrend;
• Aim for 100 - 200 Pips;

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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 

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12 Smart Ways to Succeed in Forex Trading - forex profit launcher trading system

12 Smart Ways to Succeed in Forex Trading ~ forex profit launcher trading system

12 Smart Ways to Succeed in Forex Trading

You can produce colossal benefits in Forex exchanging. 12 supportive proposals will make you closer to this objective. A strong exchanging arrangement and mindfulness about run of the mill mistakes will add to your prosperity. 

The underneath rundown furnishes you with fundamental suggestions in this assignment. 

1. Build up your exchanging arrangement 

At the point when a broker expects upraise of business sector, he for the most part says something like: "I think than EUR/USD will reach $1.3000. On which level should I purchase?" My answer is - "What is your danger in an exchange?" at the end of the day, "Where will you leave on the off chance that you are not right?" Often a merchant is shocked the answer. It never happened him that he could not be right or at which level he should place Stop. 

Most piece of brokers never have an arrangement. It implies they dont recognize what to do in the event that they are observed to not be right or right. Enormous benefit on paper transforms into huge misfortune, in actuality, since they dont know when to clear out. 

Pivotal point is to build up your exchanging arrangement before you enter an exchange. This arrangement represents the accompanying: 

• Know how and where you are going to enter market. 
• 
  
• Know which measure of cash you can hazard with. 
• 
  
• Know how and when you leave on the off chance that you are incorrect. 
• 
  
• Know how and when you leave on the off chance that you are correct. 
• 
  
• Know the amount you would get in the event that you are correct.
• 
  
• Ensure your exchange with Stop Loss if market moves the way you dont anticipate.
• 
  
• Comprehend about when business sector achieves your objective. 

2. Use cash administration procedure 

Cash administration is the danger control through defensive Stops either supporting which adjusts benefit and misfortune. 

You should have target benefit and know your odds to be correct or wrong and in addition to control hazard through defensive Stops. It is ideal to exchange with the request in which you can lose 1000 $ on the off chance that you swing to not be right and make a benefit in the measure of 500 $ when an exchange brings benefit 8 times from 10 than to make a benefit in the measure of 1 000 $ or lose just 500 $ in the exchange which works just in 1 case in 3. 

Create and test your cash administration methodology to illuminate this issue. It is a wide subject, yet the key thing you should know is to know your odds for benefit and in addition an appropriate benefit/misfortune proportion. 

3. Put defensive Stop Loss orders 

This blunder is brought about by a poor exchanging arrangement and awful cash administration technique. When you enter an exchange, put defensive Stop orders – and they should be genuine, not possible. Over and over again, dealers use believable requests in light of the fact that such requests worked in past, whereupon they saw market moves toward them. In the event that you put Stop request in a wrong place, it implies you lead a deceptive specialized investigation. 

4. Close benefit making exchanges on time. 

A generally spread slip-up among Forex brokers is that they take minor benefits and let their misfortune develop. It is a typical result when youve no arrangement. After 1-2 misfortune exchanges you will presumably take minor benefit on the following request regardless of the fact that this request could present to you a major benefit that would compensate for your past harm. 

Merchants permitting their misfortune to develop are met even among experts. You enter an exchange and dont know when to abandon it. When you begin to lose, you let this harm develop in your trust that market will move back – an uncommon case. 

Use defensive Stop Loss orders you characterize preceding making an exchange. 

5. Hold position for a sensible timeframe 

On the off chance that a dealer is not ready to take benefit on the level characterized some time recently, this misstep is regularly made. Market permits to take benefit before it takes more benefit back. 

By the by, on the off chance that you as of now have the benefit on your parity, despite everything you attempt to make out the last penny of it. On the off chance that market achieves your objective regardless you stay in the business sector, you just overhold your position. That is it! 

The main special case is when cost unequivocally moves to your bearing. Move your Stop to the objective or use Trailing Stop. 

6. Bar averaging from your procedures 

It is a return of fates and securities exchange. Averaging might destruct your Forex exchange with its influence 1:100 or considerably higher. You enter the long position, it moves lower. You legitimize averaging down hoping to have a lower normal Enter. Tragically, if market moves against you, you will lose twice as much – ordinarily it happens along these lines. 

Never normal your misfortune and your entirely created arrangement wont require averaging if market moves against. 

7. Keep the same rate of danger in the event that you get effective 

Having shut a few exchanges progression, you might begin to chance with a major sum for every exchange since this exchange now has a greater equalization. Achievement makes you sure and most likely you will now go for broke. It is not an astonishment that this mistake slaughters a greater number of brokers than misfortune making exchanges do. 

8. Exchange with sensible sum 

An unnecessary exchanging is the point at which you hazard with a too high for every penny from your remaining parts on parity either exchange with an excess of parcels/exchanging sets in one single exchange. 

To keep this misstep, never chance more than a specific rate of your remaining parts on parity regardless of how appealing the result is. 

Over-exchanging is a certain and the speediest approach to lose capital for you. 

9. Take benefit from your record on time 

It is verging on unavoidable that, for a specific timeframe, Forex will give you a chance to earn much cash and later you should begin paying back. It appears that not more than 1% of dealers take after the principle to take benefit from record. 

This issue might be comprehended in the event that you characterize the level which should be come to make you pull back the piece of your benefit from record. 

10. Keep the same exchanging arrangement 

Inside of exchanging session, you are liable to trepidation and eagerness preferably more than in quiet market. Have you ever seen that a moderate Asian session lets you to make sense of with your arrangements for an irate London session? Be that as it may, when London session opens, you do well the inverse to your arrangements. 

With couple of special cases, you would do well to not to change your methodology inside of principle exchanging hours if there are no power majeur occasions. 

To adapt to this misstep, have your arrangement drafted before arouses and be taught not to change your arrangement further. 

11. Be tolerant 

By and large, Forex action of one dealer takes from 5 minutes to 9 months. Not every one of them exchange since need to profit. Numerous dealers need market activity. Consider it: do you truly need to exchange each day or you can be sufficiently persistent to hold up regardless of the possibility that it intends to stay out of business sector for quite a long time? 

12. Be restrained 

The frequently reason of misfortune is shortage of control required to adhere to an exchanging arrangement, be quiet, endured harm, take benefit and reliably apply cash administration methodology. For fledglings, when they are finished with training and store to record, one of the most ideal approaches to advance their self-restraint is to watch market amid an entire day without making any exchanges. Regardless of the possibility that you confront a decent risk, stay quiet. 

We have considered every single real manage for a fruitful merchant. Web exchanging is a calling and, as some other calling, requires a genuine consistence with its standards. Contribute cash, as well as time, persistence and endeavors and you will way to deal with the benefit of your fantasy!

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Making Money in Forex Trading What You Must Know Before You Trade Forex Full Time - forex trading grid system

Making Money in Forex Trading What You Must Know Before You Trade Forex Full Time ~ forex trading grid system

Whenever I get emails from subscribers asking how to become a full time trader and what is the capital to be able to trade currencies full time. Although I mentioned that if you have a good forex trading system and you follow the rules of trade, perhaps one day a success. But I have also mentioned that psychological control, discipline, money management and other materials to be successful on the market in the long term.

If you plan to become a full-time operator, it is good that you are targeting, but you must understand the situation, it is now. Already it has negotiated very well today and make consistent profits every month? Still, you are able to overcome the psychological barrier of having to give up their full-time job and switch to fair trade?Several factors should be considered carefully before entering the full-time corporate world, which is not as easy as they say it is. I really consider forex trading as a professional work because its so special! Yes, anyone can learn currency trading and money begin too much money. But is he / she able to maintain good performance in the coming years? He really needs a bit of experience and knowledge to support a lot of business performance. I saw traders have failed after a few years of commercial success ... why? Greedy and overconfident, an error and beat all the income is returned. But that is not the main reason they left is the lack of confidence for trade negotiations which scared again.

Another important factor that will decide whether you can go full time to negotiate is the commercial capital. Yes, you can trade with small accounts when you are just beginning, but in order to become a full time trader, you will need reasonable enormous bills. This is because you should not risk 1% to 5% of their capital per trade and therefore the beads means small loss and small profits, how to earn a full time income in this way? Here are the 3 main reasons why small forex accounts are presented fail.

1) You will take more risks. With a small account, you will have smaller pay increases due to much smaller business. Most people will focus on the face value (dollars earned) instead of return on investment (percentage growth). When you see that you do well, but the gains are small, youll be tempted to break the money management rule and risking a large percentage of its capital. Then, an error will destroy much of your trading account. I therefore recommend a commercial capital of five digits, if possible.

2) the erroneous mentality. Most people will not treat your business seriously if it is only a small capital. They think if they lose money, they will only lose what little. It will not take you seriously a bad habit. Once is bad habit, it is difficult to remove. On the contrary, a good habit takes time to build, but only a mistake of loot.

3) It makes you want to trade more. Chances are he will not be satisfied with the amount of benefits you have done, as seems low. Most people think they are so good at negotiation and begin to look for opportunities every day (instead of trading along the trend). There will be quality jobs every day and the more you try trade, more mistakes you make and then slowly, your account will be reduced.
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The Get Rich Quick Hype In Forex Trading - stealth forex trading system free download

The Get Rich Quick Hype In Forex Trading ~ stealth forex trading system free download

In recent years, many retail investors have turned their attention to trading currencies in their pursuit of financial freedom. This phenomenon is partly due to the fluctuating economic climate, and partly due to scores of advertisements and hype about Forex trading being the best way to make money. It is crucial that aspiring traders break away from all the hype and myths about Forex trading, and begin to understand the essential things that separate the winning traders from the losing ones, and also to comprehend the reasons why most people find it difficult to beat the markets.

It is true that trading the currency market allows the average retail investor to make money despite a declining stock market and a recessionary economic climate. Not only are we able to profit from this market in both bullish and bearish economic conditions, the rates of return can potentially be significantly much higher than what we usually see in other investments. It is not unusual to hear amateur Forex traders generating returns of over 100% in just a few months. As such, Forex trading is often perceived as a very tempting get-rich-quick activity.

Many retail investors have considered the Forex market as a very appealing source of additional income, and some have even regarded it as an avenue for generating income on a full-time basis. To feed this collective desire for making money from the Forex market, we have seen countless online and offline advertisements that package all kinds of training programs and software which promise a superhighway to financial freedom.

While a sound education in Forex trading is crucial, it must be ensured that those training programs and software are actually useful. If you are truly serious about making consistent profits from the Forex market, you need to, first and foremost, understand why most people fail. You will need to understand how the Forex market behaves and the various ways in which you can approach it in order to identify high-quality entry and exit opportunities. You will need to understand what risk control truly involves, and not merely gloss over it as "basic stuff". You will, above all, need to master the demons of trading psychology which invariably sabotage some of the most intelligent traders.

Make no mistake about this! If you are systematically trained to master the important elements of successful trading and remain disciplined as you put them to practice, you will be among the minority of people who make Forex trading a very profitable business!
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Does Averaging In Work - forex swing trading strategies that work

Does Averaging In Work ~ forex swing trading strategies that work

Ron Schoenberg and Al Corwin recently did some interesting research on the trading technique of "averaging-in". For e.g.:  Lets say you have $4 to invest. If a futures price recently drops to $2, though you expect it to eventually revert to $3. Should you

A) buy 1 contract at $2, and wait for the price to possibly drop to $1 and then buy 2 more contracts (i.e. averaging-in); or
B) buy 2 contracts at $2 each;  or
C) wait to possibly buy 4 contracts at $1 each?

Lets assume that the probability of the price dropping to $1 once you have reached $2 is p. It is easy to see that the average profits of the 3 options are the following:
A) p*(1*$1+2*$2) + (1-p)*(1*$1)=1+4p;
B) 2; and
C) p4*$2=8p.

Profit A is lower than C when p > 1/4, and profit A is lower than profit C when p > 1/4. Hence, whatever p is,  either option B or C is more profitable than averaging in, and thus averaging-in can never be optimal.

From a backtest point of view, the Schoenberg-Corwin argument is impeccable, since we know what p is for the historical period. You might argue, however, that financial markets is not quite stationary, and in my example, if the historical value of p was less than 1/4, it is quite possible that the future value can be more than 1/4. This is why I never make too much effort to optimize parameters in general, and I can sympathize with traders who insist on averaging-in even in the face of this solid piece of research!
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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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EURO CAD BULLS HAVE THE EDGE WITH STRONG BULL CROWN - macd forex trading system

EURO CAD BULLS HAVE THE EDGE WITH STRONG BULL CROWN ~ macd forex trading system

A Bull Crown Formation has now appeared at the Inner Downtrend Line following the sharp Bearish breakout from the Range Setup. This appears to indicate the start of an Uptrend in the days ahead, despite the predominantly Bearish direction of this currency pair.

From the chart below, we can see that the Breakout that was taking place from the Range Setup on the Daily Chart has now ended with a rally above the Inner Downtrend Line.

DAILY CHART- OVERALL DOWNTREND

Breakouts from Consolidations such as these can include periods of pullbacks that eventually lead to the continuation of the trend. In fact, above the Inner Downtrend Line, a Range Setup has been formed above the Uptrend/Counter Trend Lines. If these are broken bearish with a strong candle, it could lead to the resumption of the overall breakout.

DAILY CHART- RANGE SETUP

However, there are two factors that give the edge to the Bulls and the likelihood of a new Uptrend in the days ahead. The first is that Breakouts from Range Consolidations of this size are generally expected to last a longer time than appears to be happening here. Although the pullbacks are expected, the time that it has now taken in moving sideways is longer than is normal for Breakouts such as these.

DAILY CHART- EXPECTED BREAKOUT DISTANCE

The second factor has to do with the Bull Crown setup that has appeared above the Inner Downtrend Line. Not only is it unusual to have such a long period of indecision with these Breakouts, but it is even more so whenever a strong setup that signals a move in the opposite direction appears.

DAILY CHART- BULL CROWN

Because of these two factors, a breakout above the Resistance of the Range Setup is the more likely scenario. This would first carry us to the Outer Downtrend Line where the pair could encounter some resistance. From here, a break of this barrier could take place to signal even stronger gains for the EURO. This would require another strong signal given the significance of the barrier and that there is always a possibility of the existing trend continuing as long as we are still below this trend line.

DAILY CHART- PROJECTED MOVES

Aggressive traders may be tempted to get into this trade before a breakout signal is provided. This is often done to get in ahead of the market especially if the breakout candle is too large and does not provide a small enough Stop Loss. However, given the frequency of False Breakouts, it is always better to wait for the Daily Chart to signal the direction in order to trade with greater confidence. Stop Losses may be larger but if they are placed at an area that is strong enough to protect the trade, a trader can hold his/her position with greater certainty that profit targets will be hit.

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GBP CAD 500 PIP RALLY IN NEXT FEW DAYS - neural spray forex trading system

GBP CAD 500 PIP RALLY IN NEXT FEW DAYS ~ neural spray forex trading system

This pair has started to break out above the latest Pennant setup on the Daily Chart which could set the stage for strong Pip gains in the days ahead. Before this takes place, however, we would need to see a stronger Bull Candle (Normal Candle) than the one that has appeared at the end of Mondays session. 

DAILY CHART - WEAK CANDLE BREAKOUT

Once we have this signal, we will be able to enter with greater confidence that another 200-Pip trade will be there for the taking.


The expected rally would continue the momentum of the major break out above the Outer Downtrend Line, which started a few weeks ago on January 21, 2015.

DAILY CHART- OVERALL DOWNTREND

DAILY CHART- START OF TREND LINE BREAK

As is typical of the Currency Market, breaks of major barriers such as these tends to take place with a break of a large Consolidation - a Pennant in this scenario. What this means is that any breakout from the smaller Pennant Setup would be supported by the momentum of the breakout from that larger Pennant- leading to profit targets being hit in a very short time.

If we see the hoped for Bull Candle this week, it will need to first go through our gauntlet of checks and balances prior to entry.

TRADE SHEET CHECKLIST

Once these criteria are met, another strong trading gain will be added to our growing trading accounts.

________________________________________

________________________________________

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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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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Education Comes Before Riches in Forex Trading - forex impulse trading system

Education Comes Before Riches in Forex Trading ~ forex impulse trading system

By Bob Sparrow

Many of us think about the possibility of working from home and making enough money that we can quit our day job. Investing is one way that we can do that. Forex Trading is an exciting method of investing and can be very profitable.

I want to give you a little bit of advice before you jump in and start trading in the Forex market. I think that this advice will prove to be very valuable to you in the long run. I know that I wish I would have listened to this advice before my first investment. I would probably be a whole lot richer today then I really am.

Invest in your greatest asset; your brain! I know that you have probably heard that before, but please dont ignore this advice. Books are easily available to us. The internet is full of information that we can access and learn from. All of us need to make sure that we have the time to study about the investment that we are getting in before you start investing.

One of the reasons that we dont read and study more is because of the Emotions that are involved in investing. We dont do that because we can already see the new clothes, car, house, and life that we will have after we make our first couple thousand dollars in our first investment. We get caught up in the "hype" of making money through investing and this clouds our reason and causes us to make bad decisions. Dont forget that it is just as easy to loose money investing as it is to make money.

How does one eliminate emotion from the investment equation? Education! Thats right, when you are educated you begin to see the realities of how easy you can loose money just as well as gain it. You begin to get a clearer picture of what it is going to take to be successful in trading and thus causing you to be more educated and be a smarter investor. This normally leads to becoming a richer investor also.

This method of getting started in investing is much cheaper then jumping in head first. I unfortunately didnt educate myself first and consequently lost a lot of money in the process. Dont be like me, educate yourself and be sure that you are ready before you do your first investment.

Dont forget that the people pushing you into an investment are the ones that will make the most money off of you while you are investing. Thats right; they are going to be making a commission off all your trades. Remember that so that you will be able to factor this into you investing decisions. Im not saying these people are evil. In fact they are necessary, just remember that you need to be just as smart if not smarter then they are!

That is pretty much it. You cant escape the fact that you are the one that will ultimately determine your level of riches! If you can learn how to control your emotions and gain some tips on how to trade successfully then you will gain a great amount of wealth. No one has fun loosing money; I hope that you are an investor who has fun!

If you are interested to learn more about how Forex investing works logon to www.smartforextrade.com and read some more articles. There is also a free ebook that you can download and read as well.
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NZD JPY BULLISH SIGNAL NEEDED FOR LARGE GAINS - professional forex trading system

NZD JPY BULLISH SIGNAL NEEDED FOR LARGE GAINS ~ professional forex trading system

Consolidation, Consolidation and more Consolidation. When will they end? Only the policy makers at the major Central Banks and the key market players know the answer. Until then, our responsibility as traders of the Larger Time Frames is to accurately spot them, analyze them and trade them for large gains. We do this by using the trading rules established for trading these patterns in my Trading Manual and waiting patiently until our targets are hit.

The next major setup that could provide such an opportunity is on the NZD JPY. This has been moving sideways towards the major Inner Uptrend Line following the end of a very long 5 -year rally.

DAILY CHART

The sideways movement can be seen more clearly on the next chart where a Range setup appears to be taking shape.

DAILY CHART

This 390-Pip Range would be completed with a rally to the Resistance boundary. A few hundred pips would be ours for the taking if we see a strong Bullish signal above the Downtrend Line (DTL) and the Counter Trend Line (CTL).

DAILY CHART

Once this appears, we can enter immediately with the appropriate Stop Loss and Limit Orders, using the Daily and 4 Hour Charts. The exact size of these Risk and Reward parameters will depend on the patterns formed when the signal appears, so long as they are within our limits set out in our Excel Worksheet.

Take full advantage of the low market volatility by maximizing on these large Consolidation setups. Trade them on your own using the guidelines established in the Trading Manual or execute them directly from my Trade Setup emailed to you as a Subscriber.

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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 NZD JPY BULLISH SIGNAL NEEDED FOR LARGE GAINS ~ professional forex trading system: