الاثنين، 9 فبراير 2009

Forex Currency Trading

It is possible to buy and sell money from different countries on the foreign exchange market called Forex. Forex currency traders can profit by taking advantage of the dips and swells in the foreign currency market. Capturing these differentials is easier in Forex currency trading than in other trading because the Forex market is open twenty-four hours a day, except for weekends, and it is global, so there are always buyers and sellers available. The traders can be diverse. They can be traders looking for short-term gains, such as day traders or slightly longer investment periods, or they can be foreign investors who are looking to hedge their investments with long term Forex trades.

Forex currency trading is done in amounts of currency called lots, that are usually $100,000 each, and can be purchased on margin. Forex currency trading strategies can be based on technical analysis of the history of the currency price or it can be based on analysis of a particular country s political climate, tax policy, jobless rate, inflation rate, and other factors of the country. There are many different systems of Forex currency trading.

Forex currency trading is a huge market. Daily trading is estimated at between $1 trillion and $1.9 trillion dollars. Because the amount of money is so huge, it s hard to imagine that the market can be manipulated the way a smaller market can be. Forex currency trading is also not overseen by one central agency like the Security Exchange Commission, and each country oversees the Forex currency trading activity within it s own country

Forex Signal, Forex Signals Advice

There are lot's of Forex signals providers out there. New Forex traders might be thinking of looking for a reliable Forex signals provider. Is there any reliable Forex signals providers available?

Personally, I will say do not pay for Forex signals. Think about it - if a Forex signals provider sells Forex signals for living, you can doubt their Forex trading skills? Or else if they are pretty good in Forex trading and making lot's of profit, I am wondering why do they still bother to sell Forex signals for money. Thus, what would be the value of such Forex signals providers? The answer is ZERO.

There are Forex traders who have been relying on Forex signals arguing those Forex signals providers really help them making money in Forex trading. These Forex traders can even show their Forex trading logs as evidence. After some though, I came out with the assumption that assuming I am the owner of a Forex signals provider, in order for my business to be in black, obviously I need some satisfying customers.

A Comprehensive Forex Broker Register

A comprehensive forex broker list includes investment banks with dealing rooms, commercial banks with treasury operations, and online brokerages that serve a larger market. The investment banks with forex trading capabilities include Morgan Stanley, Merrill Lynch, Goldman Sachs, Salomon Smith Barney, Lehman Brothers, Credit Suisse First Boston, Deutsche Bank, JP Morgan, Prudential Securities and Bear Sterns.

Some of the brokerage services are not directly accessible for all customers. For example, inter-bank market dealers and treasury operations in commercial banks handle large customer orders themselves.

The top commercial banks in the Forex Broker List, having inter-bank and treasury operations, are JP Morgan Chase Bank, Bank of America, CitiBank, Wachovia Bank, Wells Fargo Bank, Fleet Bank, US Bank, HSBC Bank, Sun Trust Bank, Bank of New York, State Street, Chase Manhattan Bank, Key Bank, Branch Bank, PNC Bank, Lasalle Bank, South Trust Bank, MBNA America Bank, Fifth Third Bank.

The online forex broker list of smaller forex accounts sees new entrants almost on a daily basis.

The online forex broker list includes Forex Capital Markets, MG Financial Group, CMS Forex, Global Forex Trading, GCI Forex Direct, Forex.com, GAIN Capital, Real time Forex SA (Geneva), Global Forex, Commerce Bank and Trust, FX Solutions, Forex MHV, swissDirekt (Swiss), Goetz Financial Forex, NY Broker Borsentermin AG, Act Forex, Online Trader, Shield FX Online Currency Trading, Forex Trade Signals, CMC Group PLC, Foreign Currency Direct Limited (UK), FX Advantage, FXCM, Forex Millenium, ACM REFCO, REFCO Spot, Easy Forex, Online Forex Trading Inc., Lincoln Corporation, Global Trade Waves, Ltd., and CIBC FX Web Dealing.

Forex Broker

A broker is any person or firm that charges a fee in exchange for executing trades for a trader. A Forex broker does not charge a commission for placing a buy or a sell order the way a real estate broker would charge a percentage fee of the total price of a sale. A Forex broker is paid according to the spread or the difference between the trader s bid for a currency, and the seller s asking price for that currency. Usually this spread is less than 0.1% or ten pips. (Pips are the smallest movement a currency can make on the Forex. Pips are commonly called referred to as points.) The lower the spread, the less a trader pays a Forex broker for a trade.

The Forex market is global and does not have one central regulatory agency like the Security Exchange Commission. Each country is responsible for the actions of trades in it s own country. A Forex broker in America must register with the Commodities Futures Trading Commission (CFTC). While traders are not regulated, Forex brokers are. A Forex broker must be registered as a Futures Commercial Merchant (FCM) before that Forex broker is allowed to accept a deposit for an account from a trader. Once registered, a Forex broker is given an identification number so that a trader can check the status of a Forex broker before hiring that Forex broker. There are such people known as introducing brokers who may solicit traders for a registered Forex broker, but the introducing broker cannot accept a deposit for a trader s account. It is a good idea for any trader hiring a Forex broker to check the status of the Forex broker with the authorities.

Forex - Funding Your Trading Account

You have refined your trading strategy after diligently rehearsing the steps of trading in the foreign exchange (FOREX) market through your demo account. Now, you would like to open a live account for trading real money. You have identified a source for your risk capital, but are unsure of what to do next. This article will guide you through that process.

Choosing A Broker
First, you must decide on which broker you will use for your live account. This may or may not be the same broker which hosted your demo account. Ideally, you will have tried several brokers' demo platform so as to familiarize yourself with the pros and cons of each. Just because a platform may be user friendly does not mean that the sponsoring broker is the overall best for parking your living account. Has the broker been around for a while? Is the broker financially strong? Does the broker have a reputation for honesty and fairness? Are your orders likely to get filled to your satisfaction, including times of volatility? Are the spreads reasonable in comparison to others? Does the broker take positions opposite yours, creating possible conflicts of interest? Is the broker responsive to problems and complaints? Is there good technical support for the platform?

Online Forex -Currency Trading

Foreign exchange currency trading is also known as Forex trading, or FX, and has no single physical marketplace like the New York Stock Exchange does on Wall Street in New York or the Tokyo Stock Exchange does in Japan. The New York Stock Exchange and the Tokyo Stock Exchange online traders are limited to making purchases during the actual trading hours governed by New York Stock Exchange hours or the Japanese Stock Exchange s Tokyo hours. In contrast online Forex trading gives traders access to the online Forex trading community through an electronic series of different online trading platforms. Online Forex trading and online accessibility are nicely compatible because the world s foreign currency exchange market is a 24-hour market, and the internet makes online forex trading a 24 hour possibility open to anyone with a computer, a telephone line and money. Anyone, any corporation or any bank can log onto an online account at any time, and trade foreign currency through online forex trading.

Online forex trading is primarily the purchase of one currency from a particular country, using the currency of a different country. This exchange involves currency from two different countries at once. It can mean purchasing Japanese currency with Australian currency or purchasing German currency with Spanish currency. While that sounds simple, in fact, approximately $1.9 trillion is traded on Forex daily, making Forex online trading the biggest exchange worldwide. Although anyone can participate in Forex online trading, the key players are usually banks commercial and investment and exchange traded futures and registered futures commission merchants.

Forex - Risk, Losses And Education

Forex - Risk, Losses And Education

Commodity Forex Online Trading

In commodity online trading, you must be kept in mind for few things. If you want to be a good trader you need to know what are you doing and have a very good education. Its very important, that you will take the time to research your commodity trading ideas deeply. Then, you will understand how your forex trading will working for you.

You are going to understand applications and technology which stick to commodity forex online trading. You will need to come up with goals and find out how achieve them by trading on the market. To become successful trader, you must know those basic things for start:

Risk
Its important thing. You need to remember, that in commodity forex online trading is risk. Forex is not type of trading where you can involve in if you want to make money in order to buy things you want, rent a house or whatever. You will need to take some risk if you want to earn good cash in forex, but it could not be done with money, that you can't afford to loose. Also, if you will lose your first deposit in market, you may end up with emotional decision, that you will only lose more money if you will keep trading. Thats bad type of thinking.

Losses - how to deal with them
You need to keep your losses to a minimum in commodity online trading. Anyway, you will probably have some small losses. If you want to have your losses as small as it is possible. then you will need to come up with an amount of maximum loss you will take in one day. This will make you sure, that your money is manages good, and that you get out before you will deal with huge losses.

Education
When dealing with commodity online trading, education is most important thing. You have to take time for learning forex to make sure, that you are educated enough before trading. Good education will become you successful. Without proper learning, you could find yourself in bad financial point.

Broker Forex Trading Five General Guidelines When Choosing A Forex Broker

It is truly incredible how times change. Eight years ago finding a good and efficient online broker forex trading was as hard as it gets. Today the forex brokerage industry has evolved to fit the needs of the individual forex trader. An increase in demand for online forex trading has generated an incredible competition between brokers. As a result, the private trader has benefited in terms of service and cost of trading. There are five general guidelines you should to know when choosing your forex broker.

1. Spread This is your cost of trading the forex spot market. It s the difference between the ask price and the bid price. Every currency quote will have these two numbers displayed so trader know at what price they can sell and at what price they can buy. This difference between the bid and the ask price is how forex broker make their money. Forex broker either offer a fixed or a variable spread. Fixed spread is guaranteed to remain the same regardless of market liquidity. Variable spreads change according to market conditions. They are tighter when liquidity is high but become larger when liquidity dries up. It is hard to come up with clear answer of weather to choose a fixed or variable spread broker. But it depends on your style.

How Many Times Have You Exited a Position Early?

February 19, 2008

Do you have a problem with exiting your positions too early? I always have. It’s one aspect of my trading that concerns me because I’m never sure if closing it early was the smart thing to do. Let me give you an example which just happened to occur today. I went long on the EUR/CAD before the European session open. I went to bed and woke up to see the position up 80 pips. I had a 100 pip stop loss and a 200 pip target. I was a bit surprised to see it up this much so quickly. I thought about it for a minute and decided to close the position and take the profit. Why violate my pip target? Based on my experience with the ebb and flow of the currency market, I figured there was a good chance that the price will not continue in my direction and retrace, wiping out any profit I had. I’ve seen this happen so many times. Today, this didn’t happen. The EUR/CAD continued going up and would have easily hit my 200 pip profit target. This frustrates me more than losing. Here are a couple of ways I’ve handled a position that goes in my favor by a substantial amount:

Close it out based on feel or maybe fear. I’ll do this even if I have a target set on the position. My rationale for closing it is that either I’m satisfied with the amount of profit or I’m fearful that if I don’t, the pair will turn against me and wipe out my profit.
Close a portion of my position based on feel or fear and leave the other portion open to run if the pair continues in my favor. From my experience, when I do this, more times than not, the remaining portion gets stopped out and I lose the profit. Almost always, when I close a portion of my position for profit, I’ll set the stop to breakeven on the remaining portion so I won’t lose any money.
It runs to completion and my target price is hit. This almost always occurs when I don’t have time to monitor the position. The target price usually gets hit very quickly. I typically obtain my highest reward to risk in this scenario.

In scenario #1, I feel good about the trade if I close it out and then it does exactly what I thought it would, turn against me. I don’t feel so good if the pair continues in my favor after I’ve closed it and would have hit my target.

My feelings in scenario #2 and very similar to those in scenario #1.

In scenario #3, I feel great about the results of the trade.

So which is better, any of the three scenarios or flat out losing money on a trade? I think not losing money is best but the first two scenarios can sometimes lead to losing money. If I’m not getting a decent reward/risk because I’m exiting a position too early, when I do hit that losing streak (trust me, it will happen), my losses could be much greater than my gains. How many times have you closed a position early when it at a negative and not going in your favor? I can count the times on one hand.

I’d love some feedback on what your experiences are and if you can relate to my possible problem. It hasn’t affected my profit the last month and a half though. I’m up over 13% this month alone but like I said, this could be short-lived if I don’t address this now.

2 Percent Risk with 2R Multiple

January 15, 2008

I’ve been emulating my real account trades with my demo account for the January forex trading contest. I’m currently in first place with a return of 11.16%. After today though, my return will drop 2 percentage points to about 9% since I lost 2% on a trade. I don’t know if this will be enough to hold on to the lead.

This is an overview of how I’ve been trading so far in January 2008:

I have been risking exactly 2% on every trade. No more, no less.
I’ve been using my forex position size calculator everyday when figuring out my trade size and find it very handy. Some of you have commented the same.
My R-multiple on every trade has been 2R. For those of you that haven’t heard of R-multiple, it’s really just an abbreviation for reward-to-risk. 2R means my reward-to-risk is 2:1.
I’m not watching my positions so there isn’t any fancy money management going on. I haven’t once set my stops to breakeven. I’m just letting them ride. If they hit my target, they hit it. If they don’t and stop out, so be it. This is quite different from what I’ve done in the past. In the past, I’ve been quick to set my stops to breakeven when they move a little in my favor. The consequence of doing this was typically a gain/loss of zero. I can’t tell you how many times I’ve moved my stop to breakeven only to see it get stopped out. Then I have to watch as the price goes back in the direction I was trading where it hits my initial target price. This to me was more frustrating than losing. I’d rather stick to my guns on a trade instead of playing it scared.

Popularity: 11%

Filed Under Money Management · 3 Comments

New Forex Position Size Calculator

January 8, 2008

The blog’s been silent since Sunday which usually means I’m busy doing other things or concentrating on trading. That has definitely been the case this week. I’ve been participating in the forex trading contest, getting Metatrader primed and ready for backtesting expert advisors again, finishing the development of a new AJAX forex position size calculator, trading for real, and working my real job. Being busy is probably common for a lot of you out there too who are trading forex but have real jobs and responsibilities.

I’ve searched around for a forex position size calculator but what I mostly found were pip value calculators, excel calculators, or calculators that were part of some proprietary trading platform (like Oanda’s.) I didn’t find what I was really looking for which was a simple calculator that gave me a recommended position size in units and where I just had to enter my account balance, the percentage I want to risk on a trade and my stop loss. So this is exactly what I developed. It’s completed and in beta at http://www.forexcalc.com. It currently only works with accounts in USD but I’ll expand on that later. You have a choice of determining the position size for 110 currency pairs, way more than you’ll ever need. It also works no matter what your account size is. It can be $1 or $10,000,000 though I doubt anyone with an account this big would utilize it.

Popularity: 10%

Money Management Checklist

December 17, 2007

UPDATE (January 2008) I’ve created an AJAX forex position size calculator that performs the calculations for you.

Here is a complete checklist to determine the most important aspect of money management, position sizing.

1. What is my account balance? $4234.58

2. What percentage of my account balance will I be risking? 1.0%

3. What is my stop loss on this particular trade? 50 pips

4. What currency pair am I trading? GBP/USD

5. How much is a pip worth on a 10K (mini) account? $1

6. CALCULATION What is my dollar risk amount? (Account Balance x Percentage Risk) $42.35

7. CALCULATION What is my position size (Dollar Risk Amount x 10000) ÷ (Stop Loss x Pip Worth)

NOTES

None.
It’s up to you to determine what percentage of your account balance that you want to risk. I’ve heard traders risking from 1.0%-5.0% per trade. I risk no more than 1.0%.
It’s important to determine what your stop loss will be before continuing with the checklist.
None.
This is the hardest to determine by hand with the exception of currency pairs with the USD in the quote currency such as the GBP/USD, EUR/USD, and AUD/USD. These currency pairs always have a pip worth of $1 on a 10K (mini) account. For other currencies, it’s easiest to use a pip value calculator. Make sure you use the pip value from the "Lot 10,000" column.
This is easy. Take the account balance and multiply it by .01 (1.0%), .02 (2.0%), etc. to obtain your dollar risk amount.
This is the most important calculation. Do it right.

EXAMPLE #1 (Answer questions 1 - 7)

$4234.58
1.0%
50 pips
EUR/USD
$1
USING A CALCULATOR-> ($4234 x .01) = $42.35
USING A CALCULATOR-> ($42.35 x 10000) ÷ (50 x $1) = (423500) ÷ (50) = 8470 units

What you might be thinking… I can only trade a mini-lot which is 10,000 units. This is more than my calculated position size. This means that you are under-capitalized. You need more capital to trade mini-lots. Another option is to use a variable-lot size broker like Oanda where you can specify 8470 units. Another option is to risk a smaller percentage per trade (use 0.5%.)

EXAMPLE #2 (Answer questions 1 - 7)

$10582.26
2.0%
75 pips
USD/JPY
$0.8829
USING A CALCULATOR-> ($10582.26 x .02) = $211.65
USING A CALCULATOR-> ($211.65 x 10000) ÷ (75 x $0.8829) = (2116500) ÷ (66.22) = 31962 units

In this example, you could enter a trade in the USD/JPY with 3 mini-lots or 30,000 units. If you have a variable-lot size broker like Oanda, you can enter a trade with 31,962 units.

There may be a better or quicker formula for calculating position size. This method works but if you know of a more efficient way, let me know.

Took My First Trade In Months

October 27, 2007

I took my first trade in months this past Thursday. I have been slowly trying to get back into the forex market by cautiously watching the GBP/USD. It's been a while since I followed any currency pair so I wanted to be sure that I watched the GBP/USD for a couple of days before taking any trade. I've decided to start referring to my profits/losses in terms of expectancy. Expectancy is "simply the mean or average R-multiple generated."

The "R" in R-multiple is short for risk. The best way to understand it is to either read the source above or continue reading. Let's take my first trade as an example. I knew my total dollar risk before entering the trade, that amount being $650.94. (yes, that exact) I exited half of my position when I had profited $329. I moved my stop to breakeven on the remaining position. Unfortunately I was stopped out on the rest giving me a total profit of $329. To figure out the R-multiple, you would take (profit / amount risked) which in this case was $329/$650.94 = .5R. Ideally, the higher the R in a profit situation, the better. For instance, a 2R multiple would be obtained in a 2:1 reward/risk trade and a 3R multiple in a 3:1 reward/risk trade. In a loss situation, a higher R is actually worse. Ideally, if you lose on a trade, the R-multiple should be 1R or less. If it's 1R, it simply means that you lost the amount you were expecting to risk. So in my above example, if I lost $650.94 on the entire trade, my R-multiple would have been 1R. Let's just say that I got stupid and decided to stay in the position and not honor my stop loss setting. Because of this stupidity, let's also say that I wound up losing $1301.88, twice as much as my initial risk. Calculating using (loss / amount risked) I would have an R-multiple of $1301.88/$650.94 = 2R.

So what does all of this mean? Well, I only have 1 trade to calculate my expectancy which would currently be .5R. I'll get more into calculating mean expectancy once I've compiled more trades. But having .5R isn't desirable because it basically means that I risked twice as much as the reward I obtained. This is exactly why I want to try to use R-multiple when I talk about my trades because even though I had a $329 profit on my first trade, it isn't as rosy as it may seem. The R-multiple was only a .5R and although it was profitable, if I trade this way in the long haul, I'll surely lose.

Another good source that also mentions the critics of R-multiple can be found at http://tradermike.net/2006/09/r_r-multiples_defined/

Risk Too Much and You Will Lose

October 21, 2007

I've been slowing getting my Forex "legs" back by reading a book I picked up months ago. The Book is called "Trade Your Way To Financial Freedom" by Van K. Thorp. I picked it up months ago based on recommendations from Simon over on his blog. I can see why he thinks so highly of this book because it is so different from the plethora of trading books out there. Van stresses managing reward to risk in your trades and position sizing. I was certainly most interested in his position sizing chapter of which I'll be talking about more in the future.

Poor position sizing can kill your account. Risk too much on any given trade and it could be impossible to recover. I've been down this road before and the reasons for this were inexperience and greed. If you were to open a $1000 trading account and you lose $200 on your first trade, this would be a 20% drawdown. The percentage gain you need to recover from this loss is a possibly manageable 25%. But if you were to lose $400 on your first trade, or a 40% drawdown, you would need a 66.7% gain to recover from this loss. This information may be trivial and known by many, but the extent isn't quite noticeable until you see the following table. Losses beyond 50% require "huge, improbable gains in order to get back to even."

Recovery after Drawdown

Drawdowns, %	Gain to Recovery, %
5	5.3
10	11.1
15	17.6
20	25.0
25	33.0
30	42.9
40	66.7
50	100.0
60	150.0
75	300.0

Blowing Up

May 11, 2007

I was turned on to an article in the New York titled "Blowing Up" by Rob Booker's blog. According to him, it's the best article he's read in a long time and I have to absolutely agree with him.

The article is about a money manager named Nassim Taleb who created an investment strategy "predicated entirely on the existence of black swans; on the possibility of some random, unexpected event sweeping the markets." Most traders dismiss this black swan as an unlikely event like Victor Niederhoffer who was one of the most successful money managers in the country at one time. Niederhoffer blew up his entire account by selling a large number of options, betting that the market would be quiet. The odds were totally in his favor he thought because the chances of the market going down so heavily were miniscule. Unfortunately for him, the market plummeted 8% in October, 1997 due to the economic crisis in Asia. Niederhoffer made the same mistake again and lost after two planes crashed into the World Trade Center. The black swan reared its head again.

Taleb takes an opposite approach and bets that the black swan will inevitable rear its head and when it does, he will have his payday. In the meantime, he compares the waiting as bleeding a slow death and most days as other money managers are making large sums of money, he's losing small amounts of money.

So as long as you have a definable risk which only threatens a small amount of your capital, you have a chance of riding a wave of profitability that outweighs these smaller losses. I don't want to oversimplify this because it's not easy but it is possible. Weigh your time and be patient. That unexpected event that could wipe out a traders account is right around the corner

What Is Maximum Drawdown?

April 20, 2007

What is maximum drawdown? Why and how do I calculate it?

First, what is maximum drawdown? It is defined as the largest drop of a given asset within a certain time period.

Why calculate it? I've never made it a point to calculate maximum drawdown but I'm going to now. This is my attempt to start looking at more "advanced" money management concepts so I've decided to start with one of the easiest. The reason for calculating maximum drawdown is to measure the riskiness of your trading strategies. It will also give you an idea of how much money you could lose at some indeterminate point in time.

How do I calculate it? During the history of your trading strategy, I'm sure you'll be keeping track of your change in equity from one day to another, one week to another, one month to another, or whatever time period you choose. In the course of your trading, you will calculate drawdown which "represents the total percentage loss experienced by
a strategy before it starts winning again … and drives the
investment balance back up." (Source: http://www.confidentstrategies.com/maximum-drawdown.htm)

Maximum Drawdown

(Valley VAMI - Peak VAMI) / Peak VAMI

The Valley VAMI is the red arrow or approximately $1,100.

The Peak VAMI is the green arrow or approximately $1,425.

Therefore the drawdown is ($1100 - $1425)/$1425 or -22.8%.

Let's do 1 more example from the picture above. First let's find the Peak prior to the green arrow.

The Peak VAMI is approximately $1,250.

The Valley before the green arrow is at approximately $1,150.

Therefore the drawdown is ($1150-$1250)/$1250 or -8%.

So to find the maximum drawdown, select the drawdown that was greatest, in our example, -22.8%.

Popularity: 9%

What Am I Studying?

March 12, 2007

I have definitely been sidetracked for some time now, preoccupied with only particular GBP/USD forex trading systems. Due to this fact, I feel like I've disregarded other aspects of technical analysis that may one day turn out to be useful. This started about 6 months ago after my first full year of trading, where I found myself sitting in front of my computer staring at charts for what felt like forever. I don't know if it was burn-out or if I just felt like these other forms of technical analysis required discretion, something that I wasn't successful at. it could also have been that I was looking for instant gratification after months of hard-core learning.

I'm not sure where my trading will be next year or this year for that matter but I feel the need to start concentrating on some of these neglected areas. It's strange that I spend so much time optimizing and organizing this website but I don't translate this over to my forex trading and studies. I feel very disorganized and sometimes behind in what others have learned in an equal or shorter period of time. I've said this before but I'm going to try to put together a list of things that I want to study and learn more about. I want to continue with my GBP/USD trading systems but I also want supplement other things into the fray. Just off the top of my head are:

Ichimoku specifically on the USD/JPY. I'm still reading the new ichimoku book that was sent to me but I've always been interested in this indicator and I want to explore it further
Chart patterns
Money Management
Carry Trades
Divergence
Fibonacci

These are only a few but I think the key as I said previously is to get organized and try to create a learning schedule so that I can become more adept at forex technical analysis.

Buy the ASK Sell the BID

Here are some helpful visitor comments received in the last 24 hours.

The first relates to the confusion regarding bid and ask prices experienced by beginner traders.

Posted by Nik

"This is the line I used to use when I first started."

"Buy the ASK , Sell the BID"

The second is an observation regarding trading systems offered by others and backtesting.

Posted by Dropout

Anyone offering a new system should be able–at minimum–to say that
they've manually backtested it for at least a year's worth of data,
resulting in "x" number of winning trades and "y" losing trades, for a
profit of "z."

However,
99.9% of the time, experts selling systems, and those posting their
systems on message boards, say, basically, "Here's a system I've been
fooling around with. I looked back at a few trades I could have made
with it, and it looks really good." Then, they and others who follow
their advice start trading the system with live accounts.

As you can probably tell from my tone, I think this is a bad idea.

Forex Trading System

January 4, 2006

Posted Forex Trading Systems

Bollinger Bands of Ultimate Oscillator System

Channel Strategy

Commodity Channel Index Trading System

Complex Trading System

False Breakout Filtering

Perfect Order

Simple MACD Trading System

Popularity: 12%

Filed Under Forex Trading Systems · 1 Comment

False Breakout Filtering

January 4, 2006

Environment: Strong trending markets that make new highs that then proceed to fail by taking out a recent low and then reverse again to make new highs

Strategy Rules:

Long Trade

1. Look for a currency pair that is making a 20-day high
2. Look for a pair to reverse over the next 3 days to make a 2-day low
3. Buy the pair if it takes out the 20-day high within 3 days of making the 2-day low
4. Place the initial stop a few pips below the original 2-day low that was identified in step 2
5. Protect any profits with a trailing stop or take profit by double the amount risked

Short Trade

1. Look for a currency pair that is making a 20-day low
2. Look for a pair to reverse over the next 3 days to make a 2-day high
3. Buy the pair if it takes out the 20-day low within 3 days of making the 2-day high
4. Place the initial stop a few pips above the original 2-day high that was identified in step 2
5. Protect any profits with a trailing stop or take profit by double the amount risked

Popularity: 12%

Filed Under Forex Trading Systems · Leave a Comment

Commodity Channel Index Trading System

January 3, 2006

Required Indicators:

CCI indicator
CCI Control Level (user-defined); default value is +40, -40
CCI Extreme Level (user-defined); default value is +100, -100

Entry-Exit Conditions

Long Entry: CCI crossing above CCI control level (+40)

Long Exit: CCI crosses above CCI extreme level (+100), then exit when CCI crosses below CCI control level (+40)
or
CCI never crosses above CCI extreme level (+100), then exit when CCI crosses below 0

Short Entry: CCI crosses below negative CCI control level (-40)

Short Exit: CCI crosses below negative CCI extreme level (-100), then exit when CCI crosses above negative CCI control level (-40)
or
CCI never crosses below negative CCI extreme level (-100), then exit when CCI crosses above 0

Forex On Top was updated this afternoon and there are a lot of big moves. Why visit? The most informative sites tend to bubble up to the top. With so many forex websites out there, it’s tough to disseminate the good from the bad. Granted, there are a lot of broker sites in the top 50 but there are also a lot of non-broker sites mixed in that get just as much traffic. This is impressive considering they’re competing without expensive advertising campaigns. Check out sites ranked 1-50, 51-100, 101-150, and more. You can also check out the forex websites that have increased their rank the most from last week at Forex Movers.

A Very Flat June

When June started, I said that I was going to try to be consistent in following my forex trading systems. Fast forward one month and I did nothing I said I was going to. Fortunately I know what the problem is. I’ve been putting in overtime at my job and when I do have free time, I spend it concentrating on subjects relevant to my job. How did this happen. I’ve been trading forex over the last three years to become less dependent on corporate America yet I now find myself more dependent than ever. Today I reflected on the last couple of months and came to this realization. I’ve strayed far off the path to self sufficiency. I want to get back on that path. I’m going to try to do this now before it’s too late.

Six months through the year, my forex trading has produced a return of 3.6%. I could have just as easily deposited the funds in a money market account and got about the same return in interest. I have to pick it up over the next six months. I plan on trading more by bringing additional systems online this month. I still won’t risk more than 2% on any given trade but I believe that I have to trade more frequently than I have been.

I’ve updated all of my forex trading graphs that show my monthly profit/loss in USD, equity curve, monthly profit/loss percentage, rolling 12 month profit/loss percentage.

Rankings of the most visited forex websites were updated last week.

All Financial Commission Merchant reports have been processed at Broker on Top. See where forex brokers rank based on excess net capital and see trend data associated with this.

Best Way To Automate Forex Trading

automated forex trading I have never traded a forex strategy live using any advanced automated methods. At the most, I’ve placed a limit order. Most, if not all of my experience has been with expert advisors in Metatrader.

I realize more than ever that if I could automate my strategies, this may take me to the next level of trading and keep me more involved in the market. At this point, I need the motivation. The subject of automated trading has always interested me but my issue has always been with trusting a broker and the platform with a live account using an expert advisor. Therefore I’m calling on everyone who has experience with automated trading to share your experiences. If you’ve used Metatrader, have you found success with any particular brokers? I know there are other automated trading software available that mostly allow trading via an FXCM API but are they any good? I know Oanda also has an API but it costs about $600/mo. If you could, please send any experiences you have at and based on what comes in, I’ll put the information together and post it here. Thanks.

How Many Times Have You Exited a Position Early?

My feelings in scenario #2 and very similar to those in scenario #1.

In scenario #3, I feel great about the results of the trade.

forex Traffic

I got a couple of comments about the top 200+ forex website rankings; mostly how they weren't accurate. The rankings before were dependent on how Alexa sorted the sites in their category listings. I was pulling data in the order in which they gave it to me. As some of you noticed, some sites were listed ahead of others even though their Alexa Rank wasn't higher. The one website that got shafted the most in the rankings was Oanda which had the highest Alexa traffic rank but was listed as #19 in the rankings. I fixed this tonight and now the rankings are based on traffic rank. You can see that Oanda benefited greatly from this change. http://www.forexontop.com

In addition, every forex websites Alexa traffic rank is also listed. More enhancements coming soon.

Access To High Leverage Does Not Mean You Have To Use It

May 13, 2008 by Trader Rich

The May issue of Currency Trader Magazine is out. Highlights include:

Forex Margin - You have access to extremely high leverage in the forex market, but that doesn’t mean you have to use it.
Can anything stop the Euro?
Time the Euro using short-term momentum.
Currencies and stock markets.
The latest on the Aussie and kiwi dollars.
Bank of Japan get a new chief.

Places To Get a Great Forex Trading System

September 7, 2008 by Trader Rich

It’s very important that if you’re exploring forex trading or already trading that you have a trading system. One aspect of that trading system are the actual setup rules which usually contain entry and exit techniques. Traders put a lot of time and effort in developing these setup rules too often neglecting other aspects such as position sizing or relative size of your profits compared to losses. Therefore it’s important to find a comprehensive forex trading system.

Where can you find a comprehensive forex trading system? Throughout the last three years, I’ve been through many trading systems obtained mostly from books, forums, or other websites. I’ve found that almost every time, I’ll mold that system into something totally different than the original incarnation, something that fits my personality and style of trading. Many times, the original system will also need to be expanded to include things that were neglected or forgotten. Those of you searching for the perfect system may find this method of modifying existing forex trading systems desirable. There are places where you can find the whole package without any need for modification.

This brings me to the question, "where did you get your forex trading system?" I think there are four main ways of getting a trading system.

Buy it. There are tons for sale out there on the net but heed caution. Many were just copied from forums, books, or other websites. Sometimes when you buy forex education, part of the package will include a trading system. For instance, Rob Booker provides his Arizona rules as part of his mentoring program.
Get a free one. There are many free systems that can be found in books, forums, or other websites. I guess one can question whether a system found is a book is free since you paid for the book.
Create an original system yourself. My main trading system is an original creation. There may be other systems out there that are similar to it since it’s a culmination of years of exposure to other systems and experiences.
Modify someone else’s system and make it your own. As I stated above, I have done this many times.

I’ve created a poll that asks you this question here. http://www.forexproject.com/forex-polls/

Popularity: 81%

Filed Under: Forex Trading Systems, Investing and Trading
Tagged: arizona rules, Forex Trading, Forex Trading System, mentoring program, perfect system, position sizing, Rob Booker

Rich is Trading Forex Again

So after yet another hiatus from trading forex, I just recently had my first trade in months. It was a successful one also. But the question I want to answer is, “Is this blog dead?” The answer is no. I’ve made a living over the past 3 years ducking in and out of here depending on what’s going on in my life. Sometimes I’m just too swamped at my real job, other times I just don’t feel like writing, but I always come back. The great thing is I’ve built up a lot of content over the years so a lot of it applies to the type of forex trader you’re trying to become.

So where do I go from here? I’m in the mood to start trading forex again so that’s what I’m going to do. I’m also going to talk a little about stocks. I’ve had a lot of success, believe it or not, trading the stock market in the last couple of months and I think I’ve learned some things that I could apply to trading forex. So you’ll hear me talk about some of these things also.

DailyFX Forex Radio - Bernanke's Forecast For A Recession Weighs Dollar, Overshadows Dour UK Housing Data

By DailyFX Radio | April 2, 2008

Listen to our Evening DailyFX Forex Radio PodCast:

http://media.dailyfx.com/podcasts/FXRadioPM040208.mp3
Key Points

· Bernanke testimony calls for rising unemployment, deeper housing slump and a recession; are market forecasts of a 25bp cut reasonable?

· UK housing market crumbles as mortage approvals, construction activity and equity withdrawals plunge.

Tell us what you think of our podcast and send us an e-mail at research@dailyfx.com

To chat with us and other traders about currency trading, visit our very popular Forex Forum

Want to hear our PodCasts daily? Subscribe to them for free on iTunes.

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DailyFX Forex Radio - Dollar Finds Relief From Risk Trends, Bernanke Testimony May Feed Rate Speculation

By DailyFX Radio | April 1, 2008

Listen to our Evening DailyFX Forex Radio PodCast:

http://media.dailyfx.com/podcasts/FXRadioPM040108.mp3
Key Points

· Dollar boosted as headlines show that the dollar isn’t shouldering the financial crisis alone.

· A lull in event risk Wednesday will highlight Bernanke’s views on the US economy and focus speculation heading into Friday NFPs.

Tell us what you think of our podcast and send us an e-mail at research@dailyfx.com

To chat with us and other traders about currency trading, visit our very popular Forex Forum

Want to hear our PodCasts daily? Subscribe to them for free on iTunes

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DailyFX Forex Radio - No End Yet In Sight To Credit Crunch, RBA Decision And US ISM Promise Action

By DailyFX Radio | March 31, 2008

Listen to our Evening DailyFX Forex Radio PodCast:

http://media.dailyfx.com/podcasts/FXRadioPM033108.mp3
Key Points

· ECB finds support for hawkish policy stance in highest CPI reading in 16-years.

· ISM Manufacturing report offers dollar traders their first taste of top market moving event riskk this week.

Tell us what you think of our podcast and send us an e-mail at research@dailyfx.com

To chat with us and other traders about currency trading, visit our very popular Forex Forum

Want to hear our PodCasts daily? Subscribe to them for free on iTunes

Start at the top and work your way down.

By Tom Long | March 31, 2008

One of the important points we teach in the FXCM Power Courses is to trade in the direction of the trend on the daily chart. We recommend only trading the strongest trends as that is where you are likely to find the best trading opportunities. After having identified a strong trend on the daily chart, we then recommend moving down to an hourly or 4-hour chart to find your entry and exit, but only in the direction of the daily trend. Too often though, new traders lose their way and start with the short-term charts to find a trade and then move up to the daily chart to justify their choice. But this approach is not as effective as starting with the daily charts to find the strongest trends. These new traders want action and seem to be able to squeeze a trade out of the market even if there are few solid opportunities. This of course lowers the win percentage and profitability of your approach. We must start with the daily chart first and stick with the most obvious trends. Then if you move down to the intraday charts of those strongest trending markets and no trades are setting up, you must exercise discipline and patience to stay out of the market and not force a trade. Being okay with staying out of the market is key to long-term success. The idea is to trade the strongest setups instead of always being in a trade. So make sure your goals are prioritized to increase your chance of success and only trade when you have the best chance of winning.

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DailyFX Forex Radio - Data Puts Pound Strength In Question, Fed Chatter Holds The Dollar

By DailyFX Radio | March 27, 2008

Listen to our Evening DailyFX Forex Radio PodCast:

http://media.dailyfx.com/podcasts/FXRadioPM032708.mp3
Key Points

· Scheduled data disappoints pound though news the largest mortgage lender is boosting rates was the real concern.

· Japanese docket lined with top tier but imponent indicators, German CPI a policy guide though lacking a release time.

Tell us what you think of our podcast and send us an e-mail at research@dailyfx.com

To chat with us and other traders about currency trading, visit our very popular Forex Forum

Want to hear our PodCasts daily? Subscribe to them for free on iTunes

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DailyFX Forex Radio - Data Weighs On Dollar, IFO And Trichet Boost The Euro

By DailyFX Radio | March 26, 2008

Listen to our Evening DailyFX Forex Radio PodCast:

http://media.dailyfx.com/podcasts/FXRadioPM032608.mp3
Key Points

· Dollar back on the chopping block with disappointing housing and business spending data.

· Euro rallies back to 1.58 as data and ECB President Trichet confirm the Euro-Zone’s strength.

Tell us what you think of our podcast and send us an e-mail at research@dailyfx.com

To chat with us and other traders about currency trading, visit our very popular Forex Forum

Want to hear our PodCasts daily? Subscribe to them for free on iTunes

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Topics: DailyFX Radio Podcasts | 1 Comment »

DailyFX Forex Radio - Dollar Loses Its Risk Appeal As Data Draws A US Closer

By DailyFX Radio | March 25, 2008

Listen to our Evening DailyFX Forex Radio PodCast:

http://media.dailyfx.com/podcasts/FXRadioPM032508.mp3

Key Points

· Dollar can’t hold its risk correlation with?

· Economic docket holds event risk for Dollar, Euro and Kiwi tomorrow.

Tell us what you think of our podcast and send us an e-mail a

To chat with us and other traders about currency trading, visit our very popular

Want to hear our PodCasts daily? Subscribe to them for free on iTunes

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Topics: DailyFX Radio Podcasts | No Comments »

Take a step back to see the big picture.

By Tom Long | March 24, 2008

One issue I see with many new traders is that they use the shortest time frame charts to make their trading decisions. It is typical to see new traders use a 1-minute or 5-minute chart because they think that their risk is lower. Since they risk less on each trade, they must be better off. The problem is that these trades found on these charts usually result in more risk as you can have many losing trades in a row because of the volatility on those charts. In our FX Power Courses we recommend trading off of the hourly or 4-hour chart in the direction of the trend as seen on the daily chart. This way you are trading with the momentum of the market and are able to be in on some of the bigger moves that these markets are known for. Those big spikes on the 5-minute chart are easily explained on the longer-term charts as they usually are within a bigger move. So start with the daily chart to identify the direction of the trend and then move down to the hourly or 4-hour chart to find your trade. If the trend is up, then only look for buys and if the trend is down, then only look for sells. This does keep your risk acceptable and the potential profit big enough to cover those losing trades.

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DailyFX Forex Radio - Dollar Ends The Week Higher On Risk Aversion, Can Fundamentals Carry The Rebound?

By DailyFX Radio | March 21, 2008

Listen to our Evening DailyFX Forex Radio PodCast:

http://media.dailyfx.com/podcasts/FXRadioPM032108.mp3

Key Points

· Dollar ends the week with major rebounds against major counterparts, will data sustain the rally?

· Holiday liquidity quickly neutralizes the market, but risk could quickly revive volatility next week.

Tell us what you think of our podcast and send us an e-mail at

To chat with us and other traders about currency trading, visit our very popular

Want to hear our PodCasts daily? Subscribe to them for free on iTunes

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DailyFX Forex Radio: Market Squares Dollar Shorts, Loonie And Pound Top Market Movers For The Day

By DailyFX Radio | March 20, 2008

Listen to our Evening DailyFX Forex Radio PodCast:

http://media.dailyfx.com/podcasts/FXRadioPM032008.mp3

Key Points

· Traders square their books before the holiday weekend, giving the dollar a boost despite sour data.

· Fundamentals lead traders to reconsider UK and Canadian growth forecasts.

Tell us what you think of our podcast and send us an e-mail at

To chat with us and other traders about currency trading, visit our very popular

Want to hear our PodCasts daily? Subscribe to them for free on iTunes

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الاثنين، 9 فبراير 2009

Forex Currency Trading

Forex Signal, Forex Signals Advice

A Comprehensive Forex Broker Register

Forex Broker

Online Forex -Currency Trading

A Very Flat June

Best Way To Automate Forex Trading

How Many Times Have You Exited a Position Early?

forex Traffic

Access To High Leverage Does Not Mean You Have To Use It

Places To Get a Great Forex Trading System

Rich is Trading Forex Again

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