Th3-Pro-Forex

Forex - An Introduction To Forex Trading

noreply@blogger.com (Anonymous) — Mon, 22 Apr 2013 17:49:00 GMT

Forex Art of War is an introduction to Forex trading. I'll be sharing insights on the Forex market. I'll tell you what it is, its function in the world, and show you opportunity even Forex Traders don't know about.

USD pushes back a bit ahead of key data

noreply@blogger.com (Anonymous) — Thu, 18 Apr 2013 16:41:00 GMT

MARKET RECAP Apr. 12 2013:
By Saxo Bank
The USD pushed back against the rest of the major currencies outside of the JPY (where another attempt at 100.00 was beaten back) ahead of key US Retail Sales and confidence data.

I’ve discussed the drivers for the strength in EURUSD in recent days, suggesting that the main focus point here is the ECB’s “stand pat” stance relative to the on-going, open-ended QE in the US (with reduction of Fed asset buying possibly delayed by recent weak data) and the wild expansion of the monetary base and BoJ balance sheet in Japan. Another, somewhat related route to EURUSD strength may be from reserve diversification in China, where the huge growth in March reserves of $130 billion may have been stimulated by the enormous USDJPY rally of this spring and which also must have resulted in a good deal of reserve diversification, which has favours EURUSD upside. This same phenomenon could be a driver behind the exaggerated strength in AUD and NZD of late, which has also been outrunning the usual fundamental inputs (interest rates, etc…). But much of this is rear-view mirror stuff, and I’m still looking for a pivot back lower in EURUSD as there are simply too many risks in the pipeline for the EU project as a whole and the ECB is going to respond in one way or another soon.

EURUSD

The 55-day moving average survived as resistance nicely yesterday – let’s see if we can get some follow up momentum lower in the short term that will soften the momentum of the squeeze and begin to confirm a pivot back to the lower range and an eventual break lower. Again, the unfortunate thing is that we’re up against the pesky round 1.3000 level which serves as a psychological magnet for many. By the way – I just did a study of how many days EURUSD has traded intraday at the price of 1.3000 since first reaching that level in 2004 and the result in an astounding 140 days. Compare that with other major round figures: 1.25: 68 days and 1.35: 96 days. This is the heart of the volume weighted price for the last 9 years, it seems.

Elsewhere – interesting to see climax and then rather sharp reversal in NZDUSD. AUDUSD can’t maintain the new highs above 1.0550 this morning, but only sub 1.0500 threatens real reversal potential. EURJPY has slipped below 130.00, and USDJPY couldn’t quite nip the 100 level overnight – more room for JPY bears in the shortest term as government bonds are on a tear this morning despite big sell-off in JGB’s overnight? EURGBP looks soft and short term key support for GBPUSD comes in at 1.5350/60.

Looking ahead

Today we have pivotal US data after an accumulation of rather ugly numbers recently – the US Retail Sales report for March and the preliminary University of Michigan confidence number for April. Do we see strong numbers that shake the trend of recent disappointments or weak numbers that confirm them or mixed data that confounds? The most interesting outcome relative to market positioning and market expectations would be weak data that sees the USD rally – which would suggest the short term potential of pushing the USD weakness is exhausting itself.

Boston Fed holds Dovefest 2013

Today, the Boston Fed is kicking off a two-day event (“Fulfilling the Full Employment Mandate”) that will see major Fed doves Rosengren and Evans speaking, as well as dovish former BoE MPC member Blanchflower. From this event, we can expect to see blueprints for the evolution of Fed policy from here, assuming the US recovery fails to take hold and the Fed then feels compelled to take monetary policy to the inevitable “next level”, whether NGDPLT or the like. By the way, on the subject of the Fed, please see MISH’s classic post on the Fed uncertainty principle. This is unbelievably from April of 2008, before Lehman and well before QE1. It predicts the evolution of Fed policy, which has developed as MISH anticipated. The corollary’s of MISH’s overall uncertainty principle are the most insightful, and should continue to serve as a guide for the Fed’s behaviour from here on out.

Regarding this Boston Fed conference and what it is likely to produce, MISH’s third corollary of the Fed uncertainty principle is most relevant: “Don’t expect the Fed to learn from past mistakes. Instead, expect the Fed to repeat them with bigger and bigger doses of exactly what created the initial problem.” In my mind, the only thing that can interrupt the cycle is a disruptive market event that falsifies the premise of Fed policy, or social tensions and the resulting political pressures from US voters, as the majority of economic participants continue to not see a recovery of any quality. The Republicans are ironically becoming the anti-Fed party (ironically because their staunchest wealthy constituents are benefitting the most from Fed policy), and in this light, this summer there is a huge risk of a disruption in the paradigm of the last five years of Fed policy.

The reason the Fed was so aggressive in easing in late 2012 was purportedly to avoid the risks from the fiscal cliff, but was it also done in the hopes that maximum benefit would be reaching the economy this summer and fall (due to the known lag in policy moves and their actual realization in the economy) as the Fed would have to undergo considerable and possibly uncomfortable scrutiny as either Bernanke faces re-nomination or a new nominee is named. Considering that it is increasingly clear to politicians that the Fed is the enabler of government spending and master puppeteer of asset markets, this event, together with the German election in September, have to be considered the premier two events of the year.

How to Survive a Trading Loss

noreply@blogger.com (Anonymous) — Thu, 18 Apr 2013 02:14:00 GMT

How to Survive a Trading Loss - by Dr. Gary Dayton

Let’s face it, trading losses can be tough. No one likes losing money. As every trader will learn sooner or later, trading losses are a routine part of the game. Nevertheless, many traders find it difficult to accept inescapable trading losses.

When We Can’t Accept A Loss . . .

It is the ability to accept the occasional trading loss that can be a key factor in whether or not you become a profitable trader. I am not saying trading losses are encouraged; but how you handle losses may significantly affect your degree of trading success.

Refusing to tolerate and properly handle trades that don’t work leads directly to trading errors. It is the inability to cope with the inevitable losing trade that causes traders to cut winning trades short, move stops in the middle of a trade, hold on to losing trades, average down, and fail to pull the trigger on sound trade setups.

Learning to accept and deal with trading loss may be just as important as making good trades.

Survival Tips – Here are 7 Steps you can take to survive and even thrive when suffering a loss:

1. Write down the trade as it occurred: Don’t sweep the loss under the rug! You need to learn from the loss (that is its value), so write it down. Include how you viewed the market at the time and how the market action and your indicators appeared to meet the criteria for a sound trade setup.

2. Evaluate the trade: Once the trading day is over, go back to what you wrote and see what can be learned. Did you miss-read the market? Was there something you failed to check? Did you take the trade even though it didn’t meet your trade criteria? Or, was the trade setup valid; it just didn’t work out?

3. Use the loss as a learning opportunity: Ask yourself, “What can I learn from this trade?” Is there an insight about market action that can be gained? Is there something about your trading behavior that needs to be addressed? Whatever it is, you have an occasion to grasp something new, and that is valuable!

4. Take immediate corrective action: Do you need to modify your trade setup? Is there a rule for personal discipline needed? Whatever you have learned, take immediate action.

5. Keep your head and attitude right: You always have a choice about attitude. You can accept the loss as an inevitable part of trading and be grateful that you can learn from it, or you can enter a negative, downward spiral of feeling bad, getting down on yourself, and making yourself feel even more miserable. Follow the constructive steps outlined here and stay above all of this.

6. Remember, trading is based in probabilities: Every trade setup has a probability of winning and a probability for loss. Over a large number of trades, a setup with an edge will be profitable. Any given trade is always uncertain. This is the law of trading probability.

7. Turn to others: We all need support. Talk to your trading buddy, mentor, partner or spouse. It helps to unload a bit and you may gain a different perspective.

Put these seven steps into place and you will be on the road to surviving and even thriving from losses.Some great and actionable insights to recover from a loss!

Short, sweet and to the point! – Thanks Gary!

SMA H1 Trading System

noreply@blogger.com (Anonymous) — Fri, 12 Apr 2013 11:10:00 GMT

Submit by Joy22 (Written by Johan Van Der Westhuizen)

Indicators - 80 SMA
Lot Size - 8
Description
The system works on a 1 hour time frame, when the market moves away from
the SMA I will look to enter a trade towards the SMA.

Chart Setup

Add the 80 SMA (simple moving average) with a setting of shift 1, apply to: Median price (HL/2). I use this
SMA with the1 hour time frame.

System Rules

Short Trades:

1. I look for a rapid, unsustainable bullish movement away from the SMA line of close to or more than 40 pips.

2. Once I spot this move, I look for any signs of the move getting exhausted.
Some times by looking for reversal candle patterns or shorter candles forming, or any other signs of exhaustion.

3. I then enter a bearish trade of 1 lot.

4. I place my target limit anywhere between 10 pips and the SMA line depending
on what I am comfortable with at that stage.

5. I don’t put in a stop loss at this point.

6. If the market continues to move bullish against my trade I do not exit the trade
but once again I wait for it to move more or less 40 pips away and I then look for
signs of exhaustion. Once this occurs I enter a second bearish trade of 3 lots.

7. I will now look to put a profit limit of 20 to 40 pips to cover for the loss on my
first entry and still make profit on my second entry.

8. If the market continues with another bullish run against my trading direction I
will repeat the process but enter the market with 9 lots this time round.

9. I will now put in a Stop loss at the lowest point the market reached and take
out all my open trades if I did not manage to take profit by the time this level is
reached.

Long Trades:

1. I look for a rapid, unsustainable bearish movement away from the SMA (simple moving average) line of
close to, or more than, 40 pips.

2. Once I spot this move, I look for any signs of the move getting exhausted.
Some times by looking for reversal candle patterns or shorter candles forming, or
any other signs of exhaustion.

3. I then enter a bullish trade of 1 lot.

4. I place my target limit anywhere between 10 pips and the SMA (simple moving average) line depending
on what I am comfortable with at that stage.

5. I don’t put in a stop loss at this point.

6. If the market continues to move bearish against my trade I do not exit the trade
but once again I wait for it to move more or less 40 pips away and I then look for
signs of exhaustion. Once this occurs I enter a second bullish trade of 3 lots.

7. I will now look to put a profit limit of 20 to 40 pips to cover for the loss on my
first entry and still make profit on my second entry.

8. If the market continues with another bearish run against my trading direction I
will repeat the process but enter the market with 9 lots this time round.

9. I will now put in a Stop loss at the lowest point the market reached and take
out all my open trades, if I did not manage to take profit by the time this level is
reached.

Short Trade Examples

Example 2

Rapid movement started away from SMA at point A to point B on the chart below
l was looking for a short trade.
Reversal signal occurred for me at point B Inside candle
I would have entered short at the 99.365 Red line with 1 lot
I would have set my take profit at the 99.007 blue line
The Take profit blue line was met at C
Total profit = 36 pips

Long Trade Example 2

A Rapid movement occurred downside of the SMA from point A to B.
A Reversal pattern formed at Point B Inside candle
I would then enter the market at the .79317 black line
My take profit zone would be from.79417 to the SMA line.
I would take profit when the price crossed the blue line at Point C: .79812
Profit: 50 pips

Bella System Trading System

noreply@blogger.com (Anonymous) — Fri, 12 Apr 2013 10:51:00 GMT

1. Open a 30 min chart EUR/USD. Insert RSI (14), Stochastic Oscillator (14,3,3)and EMAS 5 and 13.

2. We have to watch for a divergence between the price and the RSI or the Stochastic.

This is very important, because sometimes we don´t see a divergence between the price and the RSI, but the Stochastic show divergence compare to the price, and viceversa.

3. Once we saw the divergence we have to wait for the cross of the EMAS to go long or short.

4. I prefer to open the position with 2 lots and close half the position with 20-30 pips of profit, and move my sl to breakeven with the other lot, in case that the market begin to

trend, we can win more pips, and if the price begin to go against you, you keep the 20-30 of the other lot.

5. Always put sl of 20-25. This strategy presents like 10-12 oportunities in a month and it is 90 % accurate.

6. Avoid to use this strategy when is big news day.

7. In the 15 min chart I had some bad signals and in the one hour chart we enter late to the party of pips. This system can work for the GBP/USD too, but your stop have to be

like 30-40 pips.

Batas bawah, batas atas (Support & Resistance )

noreply@blogger.com (Anonymous) — Tue, 9 Apr 2013 01:38:00 GMT

Batas bawah, batas atas (Support & Resistance )

Support & Resistance

Support & Resistance sangat penting terutama untuk menentukan Target Point. Support & Resistance adalah level-level kritis yang merupakan level psikologis yang digunakan oleh para pelaku pasar dalam mengambil keputusan apakah harga akan berlanjut atau berbalik arah.

Support (batas bawah) dibentuk dengan menghubungkan dua atau lebih harga terendah.

Resistance (batas atas) dibentuk dengan menghubungkan dua atau lebih harga tertinggi.

Prinsip dasar Support & Resistance : Secara umum support & resistance dibentuk oleh harga tertinggi & harga terendah, biasanya bila harga berhasil menembus garis support & resistance atau dengan kata lain berhasil melampaui harga tertinggi atau terendah sebelumnya maka pergerakan harga akan berkelanjutan. Sedangkan Bila harga tidak dapat menembus garis support atau resistance maka harga akan berbalik arah. Prinsip inilah yang akan mendasari teori-teori lain mengenai support & resistance.

Uptrend dibuat dengan menghubungkan dua buah titik support line (batas bawah).
Downtrend dibuat dengan menghubungkan dua buah titik resistance line (batas atas).
Bila harga menembus trendline mengindikasikan harga akan berkelanjutan.

Channel Lines

Channel Lines dibuat dengan menarik garis sejajar dengan sudut yang sama dengan uptrend atau downtrend. Ketika harga menyentuh garis atas dapat digunakan sebagai tanda jual dan ketika menyentuh garis bawah dapat digunakan sebagai tanda beli.

The 5 minute TF S&R trading system

noreply@blogger.com (Anonymous) — Fri, 5 Apr 2013 07:55:00 GMT

Well its been over 2 years since my last post and the reason for that is i took what i learned and constructed a profitable way of trading. Whether you get info from forums,books etc. you must make them your own with your own rules for entry, stoploss and most importantly money mangement. Ok here we go. Support and resistance will be done only on 5 minute charts. 123 patterns are a part of support and resistance as well as broken 123 patterns which are 123's where the 3 point takes out the 1 point its a quasy 2b pattern. Indicators needed (NONE) when resistance is broken price will come back and test it to see if it turns to support this is high probability because of market structure. Here are some charts to show what i mean

THOUGH ALL THE INFO FROM POST 1 TO 63 IS THE SAME METHOD START FROM POST 64 SINCE I AM ONLY USING LINE CHARTS.

Well the way i would answer it is this; its not how many trades you put on a day but how many winning trades to put on. My money mangement goes as follows if I get and 123 at end of trend and i enter on the break of point 2 and it goes to a win i usually call it a day since i risk 3% i trade with mine and my clients money. If i have a loss and price doesnt make a new low but just takes my stop out if it goes threw point 2 i reenter if it wins i wait till it retraces to enter again so basicly i enter up plus 1 on the day maybe with 1 pair 10 to 15 trades a month via 1 session

I have recently started studying 123 patterns so I am very interested in following this strategy. I also believe in no indies and keeping it simple.

Your charts make a lot of sense and I will look for past patterns to study and get to grips with myself.

If you were studying just one pair, maybe EUR/USD on this timeframe, how many setups would you expect per day?

I am fortunate enough to work from home, so I can keep an eye on the charts during the day and make manual trades.

At the moment I am concentrating on strict SL and Money MAnagement to get disciplined.

Keep up the good work and I will follow with interest.

Thanks for sharing

X-Man's Super Simple System (S3)

noreply@blogger.com (Anonymous) — Fri, 5 Apr 2013 07:33:00 GMT

X-Man's Super Simple System

Here I am going to show you the very easy way of trading that won't need much thinking but just executing. If you follow my rules then you will be on your way to making a lot of pips and become a very very profitable trader.
This thread is very very similar to the Trading made simple but here we are looking at specifics and wont be trading Just any cross on the TDI, which is very important because as traders we want to keep the pips we make without giving the market back the pips.
Everyone will be welcomed to this thread, we must all work together as the S3 Team. Fighting will not be allowed on this thread.
This thread is dedicated to BIG E for he showed me the way to profitable trading.
just as Big E said I request all you traders out there that will be following the S3 method to get yourself a huge wheelbarrow to load all those pips you going to be making.
Before you start reading this thread you should read babypips to get the basics about forex.
Our pip target for the month will be around 1000 pips per month which will be around 50 pips per day.
With the system you about to learn , it would be easy to make that amount of pips per month.
Guys I am a full time trader and use these 2 methods , So i have full faith in them
So lets get pippin guys.

This thread is dedicated to Big E (my mentor)

Theres a word document and PDF attached to this post discussing all you need to know about the 1H E/U method and the 4H method

To master this system i request all the S3 traders to do lots of back testing. This will help you develop your trading edge and will allow you to execute trades with much more confidence.
This is the perfect place for a noob to start his trading career as this method concentrates on just 1 pair to learn patience and discipline and then when mastered a trader can start trading different pairs.

This trade plan is for the daily trades i take to get around 40 to 100 pips a day.
Your chart must be clean and simple so that will allow you to execute your trades without doubt.

The next trade plan i'm discussing are for those long swing trades where TP will be at 100 to 300 pips a trade. I want to show you a method to stay in a trade for long periods without getting stopped out using a channel and an EMA. This will be discussed in my next post.

Guys this link is to show you guys how to install the indicators on your MT4 platform

download

Download X-Man's Super Simple System (S3)

noreply@blogger.com (Anonymous) — Fri, 5 Apr 2013 07:31:00 GMT

Make the mistakes. Gamble by entering on poor quality signals. Get emotional. Observe your emotions. Lose money.
Listen to the seniors. Identify the good quality signals you can. Do the work to confirm they do work most of the time by studying old charts. Only enter on those signals. Make money. Lose money by not waiting for those signals.
Analyse trades with the seniors to learn more price behaviour. Do the work to confirm those behaviours by studying old charts, thereby increasing your signals. Listen to the seniors' advice on greed, patience, discipline and money management. Lose your greed and develop your patience and discipline by only entering on those signals. Build a plan. Lose your emotion. Make money. Slap yourself when you lose money by not following your plan.
Do the work and read widely and analyse trades with the seniors to learn more price and market behaviour. Confirm those behaviours by studying old charts, thereby increasing your understanding and signals. Only enter on those signals. Improve your plan. Make money.
Repeat the actions in red.

Method of work: HERE

Download X-Man's Super Simple System (S3)

Forex Money Managemet

noreply@blogger.com (Anonymous) — Fri, 5 Apr 2013 05:58:00 GMT

Money management is a critical point that shows difference between winners and losers. It was proved that if 100 traders start trading using a system with 60% winning odds, only 5 traders will be in profit at the end of the year. In spite of the 60% winning odds 95% of traders will lose because of their poor money management. Money management is the most significant part of any trading system. Most of traders don't understand how important it is.

It's important to understand the concept of money management and understand the difference between it and trading decisions. Money management represents the amount of money you are going to put on one trade and the risk your going to accept for this trade.

There are different money management strategies. They all aim at preserving your balance from high risk exposure.

First of all, you should understand the following term Core equity
Core equity = Starting balance - Amount in open positions.

If you have a balance of 10,000$ and you enter a trade with 1,000$ then your core equity is 9,000$. If you enter another 1,000$ trade,your core equity will be 8,000$

It's important to understand what's meant by core equity since your money management will depend on this equity.

We will explain here one model of money management that has proved high anual return and limited risk. The standard account that we will be discussing is 100,000$ account with 20:1 leverage . Anyway,you can adapt this strategy to fit smaller or bigger trading accounts.

Money management strategy

Your risk per a trade should never exceed 3% per trade. It's better to adjust your risk to 1% or 2%
We prefer a risk of 1% but if you are confident in your trading system then you can lever your risk up to 3%

1% risk of a 100,000$ account = 1,000$

You should adjust your stop loss so that you never lose more than 1,000$ per a single trade.

If you are a short term trader and you place your stop loss 50 pips below/above your entry point .
50 pips = 1,000$
1 pips = 20$

The size of your trade should be adjusted so that you risk 20$/pip. With 20:1 leverage,your trade size will be 200,000$

If the trade is stopped, you will lose 1,000$ which is 1% of your balance.

This trade will require 10,000$ = 10% of your balance.

If you are a long term trader and you place your stop loss 200 pips below/above your entry point.
200 pips = 1,000$
1 pip = 5$

The size of your trade should be adjusted so that you risk 5$/pip. With 20:1 leverage, your trade size will be 50,000$

If the trade is stopped, you will lose 1,000$ which is 1% of your balance.

This trade will require 2,500$ = 2.5% of your balance.

This's just an example. Your trading balance and leverage provided by your broker may differ from this formula. The most important is to stick to the 1% risk rule. Never risk too much in one trade. It's a fatal mistake when a trader lose 2 or 3 trades in a row, then he will be confident that his next trade will be winning and he may add more money to this trade. This's how you can blow up your account in a short time! A disciplined trader should never let his emotions and greed control his decisions.

Diversification

Trading one currnecy pair will generate few entry signals. It would be better to diversify your trades between several currencies. If you have 100,000$ balance and you have open position with 10,000$ then your core equity is 90,000$. If you want to enter a second position then you should calculate 1% risk of your core equity not of your starting balance!. Itmeans that the second trade risk should never be more than 900$. If you want to enter a 3rd position and your core equity is 80,000$ then the risk per 3rd trade should not exceed 800$

It's important that you diversify your prders between currencies that have low correlation.

For example, If you have long EUR/USD then you shouldn't long GBP/USD since they have high correlation. If you have long EUR/USD and GBP/USD positions and risking 3% per trade then your risk is 6% since the trades will tend to end in same direction.

If you want to trade both EUR/USD and GBP/USD and your standard position size from your money management is 10,000$ (1% risk rule) then you can trade 5,000$ EUR/USD and 5,000$ GBP/USD. In this way,you will be risking 0.5% on each position.

The Martingale and anti-martingale strategy

It's very important to understand these 2 strategies.

-Martingale rule = increasing your risk when losing !

This's a startegy adopted by gamblers which claims that you should increase the size of you trades when losing. It's applied in gambling in the following way Bet 10$,if you lose bet 20$,if you lose bet 40$,if you lose bet 80$,if you lose bet 160$..etc

This strategy assumes that after 4 or 5 losing trades,your chance to win is bigger so you should add more money to recover your loss! The truth is that the odds are same in spite of your previous loss! If you have 5 losses in a row ,still your odds for 6th bet 50:50! The same fatal mistake can be made by some novice traders. For example,if a trader started with a abalance of 10,000$ and after 4 losing trades (each is 1,000$) his balance is 6000$. The trader will think that he has higher chances of winning the 5th trade then he will increase ths size of his position 4 times to recover his loss. If he lose,his balance will be 2,000$!! He will never recover from 2,000$ to his startiing balance 10,000$. A disciplined trader should never use such gambling method unless he wants to lose his money in a short time.

-Anti-martingale rule = increase your risk when winning& decrease your risk when losing

It means that the trader should adjust the size of his positions according to his new gains or losses.
Example: Trader A starts with a balance of 10,000$. His standard trade size is 1,000$
After 6 months,his balance is 15,000$. He should adjust his trade size to 1,500$

Trader B starts with 10,000$.His standard trade size is 1,000$
After 6 months his balance is 8,000$. He should adjust his trade size to 800$

High return strategy

This strategy is for traders looking for higher return and still preserving their starting balance.

According to your money management rules,you should be risking 1% of you balance. If you start with 10,000$ and your trade size is 1,000$ (Risk 1%) After 1 year,your balance is 15,000$. Now you have your initial balance + 5,000$ profit. You can increase your potential profit by risking more from this profit while restricting your initial balance risk to 1%. For example,you can calcualte your trade in the following pattern:

1% risk 10,000$ (initial balance)+ 5% of 5,000$ (profit)

In this way,you will have more potential for higher returns and on the same time you are still risking 1% of your initial deposit.

~~Written by Fxmaster.net~~

The Art Of Surviving Through Money Management

Reprint of article appearing in Futures magazine, July 1981 By Walter Bressert

For many commodity traders, the futures markets are a game of balancing fear, greed and hope. When a trader is out of balance, he likely will lose money, and if he is out of control, he will lose balance. Well-designed money management concepts can help to keep the trader in control at all times.
Trading Commodities involves three interrelated, yet somewhat separate operations:

1. Analysis of when and at what price level a market will top and bottom. 2. Market Entry and Exit – the actual buying and selling (or trading) once the decision has been made. 3. Money Management, perhaps most aptly called the art of survival. Most futures traders spend 99% of their time on analysis and the buying and selling of markets. Many of these traders ultimately join the legions of ex-futures traders because they ignored the most important aspect of speculation – money management.
You can be a good analyst and lose money trading due to poor money management. But, if you have sound, market-proven money management concepts, and the discipline to follow them, you will never lose all of your money.
Since developing the following money management concepts in the mid-70s, I’ve had large profits as well as large losses – but never a single margin call. There is no guarantee that you will make money using these money management rules, but you will never lose the farm.
Before entering the market, determine a stop/loss as a profit objective. Many traders often enter the market with a price objective, but without a clearly defined protective stop. When the market moves against them they are often forced out of the size of their margin call. They lose control, and the results are often disastrous. What should have been a relatively small loss becomes an extremely large loss.
With a pre-determined price objective and a pre-determined stop/loss, you know where you will get out if you are wrong and where you will get out if you are right. You have control. The stop/loss must be in the market, not in your mind.
If you have been stopped out only to have the market make the move without you, the problem was how you determined where to place your stop, not whether to use stops.
Never risk more than 10% of equity on any single trade. If possible, risk 5% or less. Never risk more than 20% in any one complex.
If you are like most traders, you always figure how much you could make. The question of how much you could lose if you are wrong is never quantified. You are out of control.
The most important question in trading leveraged markets is – How much of your equity is at risk? On any given day, for any given trade you must know how much you will lose if the market goes against you. You can maintain control by never risking more than 10% in any one trade, and by adjusting stops so you are never risking more than a maximum of 20% of open equity at any time.
In reality, the 20% risk factor should exist for only a few days at most, as explained in the following multiple contract approach which will greatly reduce your exposure within several days of entering the market.
Trade multiple contracts
One of the most important concepts is to trade in multiples of three. Whether two, three, ten or a hundred contracts are traded, most traders make the mistake of entering and exiting all contracts at the same price level. They are going to be all right or all wrong. In using multiple contracts, no fewer than three contracts should be traded per position, and one-third of each position should have a different profit objective. If trading three contracts, each contract would have a different price objective; if trading 90 contracts, each grouping of 30 contracts would have a different price objective. With each 1/3rd of a position having a different price objective you can be wrong on your expectations and still make money!
For example, a $30,000 account risking 10% of equity can afford to risk $3,000 on the overall position. If the dollar risk per contract from point of entry to stop/loss is $900, commissions and skiddage might equal another $100; the dollar risk per contract is $1,000 with a total $3000 for the three contracts in the position.
Contract No. 1: The Money Contract
The first contract, called the Money Contract, is the most important. When possible, the profit figure for the Money Contract should equal the dollar risk, but should seldom be more than $1,000 under normal market conditions. In our example, the pre-determined dollar risk per contract, including skiddage is $1,000, so our pre-determined profit objective for the Money Contract is also $1,000.
It is important to have all three contracts on before the market moves. All three contracts can be entered at once, or can be put on at different price levels. Once the three contracts are positioned, place an exit order for the money position at the pre-determined profit objective. This order should be placed every day before the open.
Profits on the money contract should be taken as quickly as possible. Normally, the money contract should be liquidated within five market days. If not, you may be expecting too much from the market you are trading, or the market may be telling you that it is not going to move in your direction.
When the money contract is liquidated, the whole tone of the market changes because, now your risk is lowered by two-thirds of your initial risk exposure, and best of all, you have $1000 in closed profits in your account.

2:In our example of a $30,000 account risking 10%, a three-contract position was entered at $1,000 risking 10%, or 3 1/3% risk per contract. Once profits have been taken on the Money Contract, not only has its 3 1/3% risk for the Number 2 Short-Term Contract, dropping the total dollar risk to about 3 1/3% for the two remaining positions – your emotional commitment is similarly reduced.
CONTROLLED RISK MONEY MANAGEMENT

30,000 X 10% = 3,000 $Risk %Risk No. 1 Money Contract 1,000 3 1/3 No. 2 Trading Contract 1,000 3 1/3 No. 3 Long Term Contract 1,000 3 1/3
Take profits on
Exit No.2 Contract with $1000 profit. T.C. Bottom Buy 3 Contracts Exit No.1 Contract with $1,000 Profit T.C. Bottom Buy 3 Contracts T.C. Bottom Fails to retrace enough to add 3 contracts. Take profits on No.1 Contract as T.C. price objective is met. Take profits on No. 2 Contract as T.C. price objective is met. No.3 Contract as T.C. price objective is met. Contract No. 2: The Short-Term Profit Objective Contract
The Short-Term Contract is also designed to take profits at a pre-determined profit objective. Normally, this can be the crest of a Trading cycle in a bull market, or the Trading Cycle trough in a bear market. Either get out at this price objective, or as prices approach your price objective, move stops closer and have the market take you out.
In our $30,000 account, if you make $2,000 on the Short-Term Contract, you now have $3,000 in closed profits and a third position that has a $2,000 open profit.
Contract No. 3: The Long-Term Profit Objective Contract
The purpose of the Long-Term Contract is to keep you in the market for the BIG moves. Assuming you liquidated the Short-Term Contract near the Trading Cycle top, the Long-Term Contract will give up some profit as the Trading Cycle bottoms. But, the purpose of the Long-Term Contract is to comfortably ride with the market until your long-term price objective is reached, which is often the price objective for the Primary Cycle or the Seasonal Cycle.
These money management concepts can be modified depending upon the position of the Trading Cycle and when the buy/sell signal is generated.

3 :Shown in the following example is the first three-contract position, which is entered at the Trading Cycle bottom with a dollar risk of about $1,000 per contract (point of entry to the Trading Cycle low, which is the stop, plus commissions and expected skiddage).
Within several days of entry, the No. 1 Money Contract should be liquidated with $1,000 profit. As the Trading Cycle moves up, a $1000 profit is taken on the No. 2 Short-Term Profit Objective is met. The No. 3 Contract is held through the Trading Cycle bottom in anticipation of reaching the higher Primary Cycle or Seasonal Cycle price objective.
As the Trading Cycle bottoms, three more contracts are bought for a total of four contracts – two Long-Term Contracts, the Money Contract and the Short-Term Profit Objective Contract. As the market moves up, the money contract is liquidated at the pre-determined price objective and a short-term profit is taken as the Trading Cycle tops. Both Long-Term Contracts are held expecting higher prices as the long-term objective is met.
As the next Trading Cycle bottoms in this example, the market does not retrace as expected; so new contracts are not added. The market takes off without the additional three contracts, but leaves two Long-Term Contracts that can be liquidated at two different price levels as the Primary Cycle tops. Should the market fail to reach the long-term price objective, technically determined fail-safe stops must be maintained for the two remaining Long-Term Contracts. But, assuming all goes well, each of the two Long-Term Contracts can be liquidated at different price levels as the long-term objective is met. (My own approach is to take one-half of the profits on strength before the market tops.)

Some Pratical Thoughts Abaut Money Management

Forex Money Management | Written by Chuck LeBeau |

We get a lot of questions about various complex money management (MM) formulas and our preferences. We don't comment on this subject very often because money management is such a personal issue that it would be impossible to give any universal advice that would be specific enough to have value. Everyone seems to have different goals and tolerances for risk, not to mention varying amounts of capital for trading.

However we do have some basic thoughts and opinions that might be helpful in picking a suitable MM strategy that will help you to become a winner.

Be careful about trying to use formulas that are designed to optimize the returns. In my experience I have found that the most successful traders, over the long run, are not seeking to maximize their returns. The best traders are always seeking to carefully control their risks and to achieve as much consistency as possible. They look for methods to achieve consistent returns with low drawdowns and they are willing to accept smaller returns in the process. My policy has always been to worry about the risk and the consistency first and then to accept whatever returns that prudent approach will allow. I'm sure I will never win any trading contests and I have never bothered to enter one. In my opinion, no one should ever trade like the winner of a trading contest. I apologize for getting off on a different subject here. Lets get back on track and talk about trading in the only contest that matters - the trading that you do every day.

In recent years the strategy of risking a small percentage of capital on each trade has become quite popular and deservedly so. This MM strategy, often referred to as fixed fractional trading, reduces our dollar amount of risk as we experience losses and increases our risk level as we earn profits. The possibility of ever going to zero with such a strategy is virtually nonexistent. However this strategy has an inherent weakness that tends to constantly work against us. If we assume an equal number of winners or losers in a sequence this popular strategy produces net losses if the winners are not larger than the losers. To keep things very simple lets just look at a series of five wins followed by five losses with the wins being equal to the amount we risk. Lets also keep the math really simple and begin with starting capital of 100 and risk 5% of our current capital on each trade. I think that most traders would assume that if they had five losers followed by five winners they would be even. Unfortunately that is not the case.

Here are the numbers: Risk is always 5% of current capital. (I'm going to round the numbers to two decimals.)

Capital $ Risk W/L Account balance
100.0 5.00 L 95.00
95.00 4.75 L 90.25
90.25 4.51 L 85.74
85.74 4.29 L 81.45
81.45 4.07 L 77.38

OK we are already tired of losing. Let's have five winners in a row and see if we can get our money back.

Capital $ Risk W/L Account balance
77.38 3.87 W 81.25
81.25 4.06 W 85.31
85.31 4.27 W 89.58
89.58 4.48 W 94.06
94.06 4.70 W 98.76

As you can see we had an equal number of winners and losers yet somehow we lost money. Perhaps it is because we had bad luck and got started in the wrong direction. Lets reverse the sequence of trades so that we start out on a winning streak instead of losing. Maybe that will help.

Capital $ Risk W/L Account balance
100.00 5.00 W 105.00
105.00 5.25 W 110.25
110.25 5.51 W 115.76
115.76 5.79 W 121.55
121.55 6.08 W 127.63

Looks good so far. Starting off with winners looks much better than starting with losses. But now we have five losers coming up.

Capital $ Risk W/L Account balance
127.63 6.38 L 121.25
121.25 6.06 L 115.19
115.19 5.76 L 109.43
109.43 5.47 L 103.96
103.96 5.20 L 98.76

Hmmm. It doesn't seem to matter if we start out with a string of winners or a string of losses. Somehow we wound up losing the same amount of money either way.

Obviously we don't have a very good system at work here but it is not a losing system. With the proper MM strategy we should break even. Our winning trades are only equal to our risk and to have a winning system the winners need to be bigger than the losers. We are winning on only half of our trades and we would be profitable if we could win on more than half. Even though our system is not a good one you would think that it would at least be a breakeven proposition (we haven't included any costs) because the winners are always equal to the amount at risk and we win 50% of the time. That sounds like a breakeven system, doesn't it? But if we employ the popular money management strategy of risking a fixed percentage of our current capital we manage to turn the system into a loser. However, if we risked a fixed dollar amount on each trade the system results would improve and we would break even.

The fixed percentage of risk approach to MM is a good one because it keeps us from going broke and it compounds our profits rapidly. Both of those are desirable characteristics but we need to be aware that they come at a price. We should realize that our recovery from drawdowns might not be as fast as we would like and that we can give back profits even faster than we made them.

One strategy that can help solve the problem of giving back the profits too rapidly is to periodically sweep some of the profits out of the account and place them in some other place where they are adding to our diversification and reducing our risk. Now and then we should take some of the profits out and spend them on something that improves our quality of life. This important step gives the dollars at stake a new meaning and boosts our morale tremendously. What is the point of winning and losing and accumulating profits only to give them back at some later date? If we make it a practice to routinely sweep some of the profits our account will continue to grow but it will be compounding at a slower rate than if we left our profits at risk. However if we stumble into a losing streak we will be glad that we took out some of the profits and reduced our bet size.

If we are good traders and we make it a practice to withdraw some of our profits on a regular basis we will eventually reach the point where we have taken out more than we started with. There are very few traders, particularly in futures, who can claim that they have truly beaten the market. Until you have taken out more than you started with the market can still beat you. Trading futures is a zero sum game and winners are few and far between. Taking out profits now and then rather than getting carried away trying to optimize the gains to infinity is contrary to what is being taught these days. Everyone is obsessed with finding formulas to optimize the returns. We need to remember that the trader who has the optimum gains today could easily be tomorrow's biggest loser. That is a game we don't need to play.

I think we all need to take a step or two back and look at the big picture. Trading is not really just a game. The money is real. Lets make sure that we are true winners and not just habitual players. Take some profits now and then and put them out of harms way. When we have done this I can assure you that the game is a lot more fun and our trading will improve. Nothing builds confidence like knowing for sure that you are indeed a winner.

Good Luck and Good Trading

Traderclub
~~by Chuck LeBeau~~
Money Management

~~by Joe Ross~~

There are some common mistakes I’ve seen traders make in the area of money management. First, let’s understand what money management is all about. Money management overlaps with risk, trade, business, and personal management, yet it has many aspects that make it unique, distinctly different from all of the other areas of management. In this chapter we want to examine some areas of money management that seem to involve mental quirks leading to costly mistakes.

Listening to Opinion

Kim has entered a short position in crude oil after carefully studying as many factors as she could reasonably include while making her decision to trade. She has entered the trade because her study of the underlying fundamentals has her convinced that crude oil prices must soon begin to fall. Then Kim turns on her television set and begins to watch one of the financial news stations. An “expert” in crude oil is being interviewed. He begins to talk about how crude oil inventories are almost certain to drop this year because oil companies are not doing as much exploration as they have in previous years. Kim listens intently to what he has to say and then begins to doubt her decision about the trade she has entered. The more she thinks about it, the more panicky she becomes. She considers abandoning her position even though she will end up with a loss.

The fact that an “expert” has decided something else completely shakes her confidence. She exits the trade intraday and takes a $400 loss. Prices have not come near her protective stop, which was $700 away from her entry. The market never moves sufficiently far to have taken out her stop. By the end of the day, her crude oil futures have made a new high, and in the following days explodes into a genuine bull market. Instead of a magnificent win, Kim has a loss. The loss is more than money, she has lost confidence in herself.

What should be done?

You should set your own trading guidelines and trade what you see. Forget about opinion, your own and especially that of others. Unless you are one of a very rare breed whose opinions are sufficiently good for trading, do not trade on them.

Make an evaluation based on the facts you have and then go with the trade. Just be sure you have a strategy for extricating yourself before losses become big. Had Kim stayed with her original strategy and stop placement, she would have ended up a happy winner instead of a regretful loser.

Taking Too Big a Bite

Biting off more than can be chewed is a weakness of many traders. This form of over trading derives from greed and failing to have clearly defined trading objectives. Trading only to “make money” is not sufficient.

Pete has sold short T-Bonds and is now ahead by a full point. He notes that he is making money on his trade. Feeling very confident and thinking it would be smart to be diversified, he enters a long position in silver futures, and also sells short Call options of wheat which he is sure is headed down. Almost as soon he is in the market, wheat prices explode upward and his Calls are in trouble. Pete buys back the losing short Calls and sells additional Calls on a two-for-one basis at a higher strike price. At the end of the day he looks at other positions. Silver had an intraday reversal leaving a spiked bottom as they close at the high of the day. The T-Bonds have made an inside day, but to Pete they suddenly look weak, he is down a few ticks. At the end of the day, he finds that most of the money he had made on his short T-Bonds was used to buy back the short wheat Call options. He covered those and now has additional premium in his account, but he also has additional risk, and is short Calls in a rising market – not an enviable position. Moreover, he is now worried about his long silver futures based on the fact that silver closed at its lows on what seems to be a genuine reversal. To further aggravate the situation, he has lost confidence in himself. What was once a happy, simple, winning silver long, has now become an ugly, confusing mess, and Pete has a good chance of ending up a loser on all three trades. If Pete keeps over-trading in this fashion, he could end up like the poor fellow in the picture.

What should be done ?

Break every trade into definitive goals. Make sure you achieve those goals before adding other positions. Even with a single short sale of the T-Bonds, Pete could have set himself a goal for the trade. One or two full points might have been all he needed to satisfactorily retire that trade as a winner. Then he could have made his trading decision for an additional position. There are very few traders who can successfully manage multiple positions in a variety of markets.

Overconfidence

Overconfidence is a particular kind of trap that springs shut when people have or think they have special information or personal experience, no matter how limited. That's why small traders get hurt trading on no more information than “hot-tips.”

Tim is a farmer. He raises hogs and purchases huge amounts of feed to provide for his hogs. Tim has a large farming operation which is quite profitable. He takes 250 hogs a week to market. Because of a steady flow of hogs from his operation to the market, Tim has no need to hedge his hog business because he is able to dollar average the prices he gets for them. But Tim does want to indirectly reduce the cost of the feed he has to buy, so he purchases soy meal futures. Tim listens to weather and farm reports all day long. He attends meetings of other farmers, and tries to gather all the information he can that might help him be more profitable. But Tim has a major problem, called tunnel vision. When he looks out at the grain fields in the area where he lives, whatever he sees there he extrapolates to the whole world.

In other words, if Tim sees that the surrounding fields are dry, he suspects that all fields everywhere must also be dry. One year Tim witnessed a local drought. He checked with all the local farmers and they said they were truly experiencing drought conditions. He looked at the news on his data feed, and sure enough it said that there was a drought in his area. In fact, the entire state where Tim raises his hogs was undergoing drought.

Tim wasn’t too concerned about his own feed bins. He had plenty of it in his silos from previous bumper crop years. Tim decided to be piggish and speculate on what he considered to be inside information. He called his broker and bought heavily into soy meal futures. Tim was confident. He was sure that soy meal prices would explode upward some time soon, and that he was going to make himself a small fortune. Tim's greed may have turned him into a hog. However, the futures he purchased started moving down and the value of his investment began to shrink markedly. What Tim failed to do was to have a broader perspective. Everywhere else that grains were grown, farmers were experiencing rain in due season. The drought was localized almost entirely within the state in which Tim did his hog raising. Tim lost because he was confident in the limited knowledge he had.

What should be done?

We all need to broaden our horizons. We need a humble attitude relative to the markets. We can never afford to wallow in overconfidence in what we perceive as special knowledge. A trader can never afford to let his guard down. Tim thought he knew something that others hadn’t yet caught onto. In so doing, Tim made another mistake as well. He heard only what he wanted to hear.

Hearing What You Want to Hear – Seeing What You Want to See

Marketers call this preferential bias. Preferential bias exists among traders. Once they develop a preference for a trade, they often distort additional information to support their view. This is why an otherwise conscientious trader may choose to ignore what the market is really doing. We've seen traders convince themselves that a market was going up when, in fact, it was in an established downtrend. We’ve seen traders poll their friends and brokers until they obtained an opinion that agreed with their own, and then enter a trade based upon that opinion.

A student of ours, Fran and her husband, John, decided they wanted to go to live in the Missouri Ozarks. Everyone told them that there was no way for them to make a living there.

Everyone they asked advised them not to do it.

Finally, a minister in the Church they proposed to attend told them that they were to serve there. Out of twenty or thirty people they asked, that minister was the only one who told them to come. Of course, it was exactly what they wanted to hear. They sold their home and most of their possessions accumulated over a lifetime. They moved to the Ozarks and went broke within a year. They had to leave and begin all over again. John, who had been semi-retired, now had to find a job. So did Fran. She had to give up a promising start as a trader to go out to put food on the table.

What should be done?

Look at each trade objectively. Do not allow yourself to become married to your opinion. Learn to recognize the difference between what you see, what you feel, and what you think. Then, throw out what you think. Lock out the input of others once you have made up your mind. Don't let your broker tell you what you want to hear. Never ask your broker, your friends, or your relatives for an opinion. Turn off your TV or radio, you don't need to see or hear what they have to say. Take all indicators off your chart and just look at the price bars. If you still see a trade there, then go for it.

Fearing Losses

There is a huge difference between being risk averse and fearing losses. You must hate to lose. In fact, you can program your brain to find ways to not lose. But not losing is a logical thought-out process, rather than an emotion-based reaction.

Two human -based tendencies come into play. The first is the sunk-cost fallacy and the second is the exaggerated-loss syndrome.

Sunk-cost fallacy: You are in a trade that begins to go against you. You reason that you have already spent a commission, so you have costs to make up for. Moreover, you have spent time and effort researching and planning this trade. You reckon that time and effort as cost. You have waited for just such an opportunity and you are afraid that now that it has come you will have to miss this trade. The time spent waiting for opportunity is something you also count as cost. You don't want to waste all these costs, so you decide to give the trade a little more room. By the time you realize what you’ve done, the pain is almost overwhelming. Finally, you have to take your loss which is now much larger than it might have been. The size of the loss adds to your fear of ever losing again. The end result is brain lock and inability to pull the trigger on a trade.

Exaggerated-loss syndrome: You give the importance of losing on a trade two to three times the weight of winning on a trade. In your mind, losses have greater significance than wins. In reality, neither is more or less important than the other. In fact, wins do not have to be as numerous as losses as long as the wins are significantly larger in size than the losses. Of course, best is to have more wins than losses with the wins greater in size than the losses.

What should be done?

Evaluate your trades solely on their potential for future loss or gain. Ask yourself, “what do I stand to gain from this trade, and what do I stand to lose from this trade?” Think the matter through. “What is the worst thing that can happen to me if I take this trade, and do I have a plan and a strategy for extricating myself long before it happens?” “If I begin to lose, is there a way I can turn things around and come out a winner?” Learn to look at the costs of a trade as part of your business overhead. Try to have a mind set that you will not throw good money after bad. When you give a trade more room, you are doing just that – often throwing away money.

Valuing invested money More Than won money

Traders have a tendency to be more careless with money they’ve won than with money they’ve invested. Just because you won money on good trades doesn’t mean you should gamble with that money. People are more willing to take chances with money they perceive as winnings as though it were found money. They forget that money is money. Valuing money depending on where it comes from can lead to unfortunate consequences for a trader. The tendency to take greater risk with money made from trades than with money invested as capital makes no sense. Yet traders will take risks with money won in the markets that they would never dream about with money from their savings account.

What should be done?

Wait awhile before placing at risk money won on trades. Keep your trading account at a constant level. Strip your winnings from your account and put them in a safe conservative place. The longer you hold on to money, the more likely you are to consider it your own.

Forgetting About Margin Inflation

Before the crash of 1987, S&P 500 stock index futures carried an exchange minimum margin of about $12,000 . Immediately after the crash, margins required by some brokers rose to $36,000 and higher.

A trader we know, called Willie, figured that if prices on an index he was short went down, he would continually add to his position whenever prices first pulled back and then broke out to new lows. The index he was trading became very volatile, and his broker raised margins to by 1/3 rd. Willie was trading a small account, and when he tried to sell short additional contracts onto his already short position, his broker would not allow him to do so. Willie complained bitterly, but the broker was adamant in his refusal. The broker would not allow Willie to use unrealized paper profits to cover the additional margin required for adding on. He explained to Willie that to do so would in effect allow Willie to build a pyramid position and that was not going to be allowed by the broker's firm.

The mistake Willie was making was what some call the “money illusion.” Willie assumed that because his position was moving in his favor that he had more selling power and more margin. His broker quickly brought Willie face to face with reality. While some brokers may allow it, unrealized paper profits do not truly constitute additional funds that may be used for margin. Willie’s dream of fabulous profits from this trade were just that, a dream. Willie should be thankful that his broker did not allow him to get in trouble. Pyramiding with unearned paper profits is not the way to succeed as a futures trader.

What should be done?

You should realize that each so-called “add-on” to an open position is really a whole new position. Each add-on carries all new risk, and each add-on brings you closer to the add-on trade which will fail and become a loser. When planning a trade, be aware that if the market becomes volatile, margin requirements may go up, thereby defeating any strategy for adding on to your position. There is nothing wrong with building a position one leg at time as prices ascend or descend, but when volatility dictates an increase in margin requirements, beware of trying to add on and be aware that you may not be able to add on.

Option sellers can quickly get into similarly difficult positions. As they roll out to new strikes to defend a threatened short options position, they can find themselves not only facing the need for a larger position, but also facing increased margins in creating that larger position. They may discover that they no longer have sufficient margin to defend a particular position and thus have to eat a sizable loss.

MORE KEY MISTAKES

Throughout our courses we mention some key mistakes commonly made by traders. Here are a few more:

Error: Confusing trading with investing. Many traders justify taking trades because they think they have to keep their money working. While this may be true of money with which you invest, it is not at all true concerning money with which you speculate. Unless you own the underlying commodity, for instance, selling short is speculation, and speculation is not investment. Although it is possible, you generally do not invest in futures. A trader does not have to be concerned with making his money work for him. A trader’s concern is making a wise and timely speculation, keeping his losses small by being quick to get out, and maximizing profits by not staying in too long, i.e., to a point where he is giving back more than a small percent of what he has already gained.

Error: Copying other people’s trading strategies. A floor trader I know tells about the time he tried to copy the actions of one of the bigger, more experienced floor traders. While the floor trader won, my friend lost. Trading copycats rarely come out ahead. You may have a different set of goals than the person you are copying. You may not be able to mentally or emotionally tolerate the losses his strategy will encounter. You may not have the depth of trading capital the person you are copying has. This is why following a futures trading (not investing) advisory while at the same time not using your own good judgment seldom works in the long run. Some of the best traders have had advisories, but their subscribers usually fail. Trading futures is so personalized that it is almost impossible for two people to trade the same way.

Error: Ignoring the downside of a trade. Most forex traders, when entering a trade, look only at the money they think they will make by taking the trade. They rarely consider that the trade may go against them and that they could lose. The reality is that whenever someone buys a futures contract, someone else is selling that same futures contract. The buyer is convinced that the market will go up. The seller is convinced that the market has finished going up. If you look at your trades that way, you will become a more conservative and realistic trader.

Error: Expecting each trade to be the one that will make you rich. When we tell people that trading is speculative, they argue that they must trade because the next trade they take may be the one that will make them a ton of money. What people forget is that to be a winner, you can't wait for the big trade that comes along every now and then to make you rich. Even when it does come along, there is no guarantee that you will be in that particular trade. You will earn more and be able to keep more if you trade with objectives and are satisfied with regular small to medium size wins. A trader makes his money by getting his share of the day-to-day price action of the markets. That doesn't mean you have to trade every day. It means that when you do trade, be quick to get out if the trade doesn’t go your way within a period of time that you set beforehand. If the trade does go your way, protect it with a stop and hang on for the ride.

Error: Having profit expectations that are too high. The greatest disappointments come when expectations are unrealistically high. Many traders get into trouble by anticipating greater than reasonable profits from their trading. They will often get into a trade and, when it goes their way and they are winning, they will mentally start spending their winnings, and may even borrow against their anticipated winnings to take on additional risk. Reality is that you seldom make all of the money available in a trade. I cannot count the times that I had for the taking hundreds or thousands of dollars in unrealized paper profits only to see most of those profits melt away before I was able to or had the good sense to get out. One trader I know had $700 per contract profits in a short eurodollar trade. The next day his position literally imploded on news of a 50 basis point cut in interest rates. He was lucky to get out with $350 per contract. The money from trading often doesn’t come in as fast or as plentifully as you have expected or been led to believe, but the overhead costs of trading arrive right on schedule. False profit expectations have caused aspiring traders to leave their job before they were really successful. The same false hope causes them to lose the money of friends and family. False hope causes them to borrow against their home and other fixed assets. Too high expectations are dangerous to the well-being of every trader and those around him.

Error: Not reviewing your financial goals. Before you make a position trading decision, or before you begin a day of day trading, review your motives and your goals.

Why are you trading today?

Why are you taking this trade?

How will it move your closer to your goals and objectives?

Error: Taking a trade because it seems like the right thing to do now. Some of the saddest calls we get come from traders who do not know how to manage a trade. By the time they call, they are deep in trouble. They have entered a trade because, in their opinion or someone else’s opinion, it was the right thing to do. They thought that following the dictates of opinion was shrewd. They haven’t planned the trade, and worse, they haven’t planned their actions in the event the trade went against them. Just because a market is hot and making a major move is no reason for you to enter a trade. Sometimes, when you don’t fully understand what is happening, the wisest choice is to do nothing at all. There will always be another trading opportunity. You do not have to trade.

Error: Taking too much risk. With all the warnings about risk contained in the forms with which you open your account, and with all the required warnings in books, magazines, and many other forms of literature you receive as a trader, why is it so hard to believe that trading carries with it a tremendous amount of risk? It’s as though you know on an intellectual basis that trading futures is risky, but you don’t really take it to heart and live it until you find yourself caught up in the sheer terror of a major losing trade. Greed drives traders to accept too much risk. They get into too many trades. They put their stop too far away. They trade with too little capital. We’re not advising you to avoid trading futures. What we’re saying is that you should embark on a sound, disciplined trading plan based on knowledge of the futures markets in which you trade, coupled with good common sense.

Joe Ross

Exit Strategy

noreply@blogger.com (Anonymous) — Wed, 3 Apr 2013 15:27:00 GMT

In many ways, a good exit is more critical and difficult to achieve than a good entry.
The big difference is that while waiting for a good opportunity to enter a trade, there
is no market risk. If one opportunity to enter is missed, another will always come
along-and a good, active trading model should provide many such opportunities.
When a trade is entered, however, exposure to market risk occurs simultaneously.
Failing to exit at an appropriate moment can cost dearly and even lead to the dreaded
margin call! We actually know someone who made a quick, small fortune trading,
only to lose it all (and then some) because the exit strategy failed to include a
good money management stop!

There am two goals that a good exit strategy attempts to achieve. The first and
most important goal is to strictly control losses. The exit strategy must dictate how
and when to get out of a trade that has gone wrong so that a significant erosion of
trading capital can be prevented. This goal is often referred to as money management
and is frequently implemented using stop-loss orders (money management
stops). The second goal of a good exit strategy is to ride a profitable trade to full
maturity. The exit strategy should determine not only when to get out with a loss,
but also when and where to get out with a profit. It is generally not desirable to
exit a trade prematurely, taking only a small profit out of the market. If a trade is
going favorably, it should be ridden as long as possible and for as much profit as
reasonably possible. This is especially important if the system does not allow multiple
reentries into persistent trends. “The trend is your friend,” and if a strong
trend to can be ridden to maturity, the substantial profits that will result can more
than compensate for many small losses. The protit-taking exit is often implemented
with trailing stops. profit targets, and time- or volatility-triggered market
orders. A complete exit strategy makes coordinated use of a variety of exit types
to achieve the goals of effective money management and profit taking.

Exits employed in an exit strategy:

There are a wide variety of exit types to choose from when developing an exit
strategy. In the standard exit strategy, only three kinds of exits were used in a simple,
constant manner. A fixed money management exit was implemented using a
stop order: If the market moved against the trade more than a specified amount.
the position would be stopped out with a limited loss. A p&It rarget exit was
implemented using a limit order: As soon as the market moved a specified amount
in favor of the trade, the limit would be hit and an exit would occur with a known
profit. The time-based exir was such that, regardless of whether the trade was profitable,
if it lasted more than a specified number of bars or days, it was closed out
with an at-the-market order.
There are a number of other exit types not used in tbe standard exit strategy:
trailing exits, critical threshold exits, volatility exits, and signal exits. A trailing
exit, usually implemented with a stop order and, therefore, often called a trailing
“top, may be employed when the market is moving in favor of the trade. This
stop is moved up, or down, along with the market to lock in some of the paper
profits in the event that the market changes direction. If the market turns against
the trade, the trailing stop is hit and the trade is closed out with a proportion of
the profit intact. A critical threshold exit terminates the trade when the market
approaches or crosses a theoretical barrier (e.g., a trendline, a support or resistance
level, a Fibonacci retracement, or a Gann line), beyond which a change in
the interpretation of current market action is required. Critical threshold exits
may be implemented using stop or limit orders depending on whether the trade
is long or short and whether current prices are above or below the barrier level.
If market volatility or risk suddenly increases (e.g., as in the case of a “blow-off
top), it may be wise to close out a position on a volatility exit. Finally, a signal
exit is simply based on an expected reversal of market direction: If a long position
is closed out because a system now gives a signal to go short, or because an
indicator suggests a turning point is imminent, a signal exit has been taken.
Many exits based on pattern recognition are signal exits.

Exits employed in an exit strategy

Money Management Exits

Every exit strategy must include a money management exit. A money management
exit is generally implemented using a stop order. Therefore, it is often referred to
as a money management stop. Such a stop closes out a trade at a specified amount
of adverse excursion (movement against the trade), or at a specified price below
(if long) or above (if short) the price at which the trade was entered. A money management
stop generally stays in place for the duration of the trade.

Its purpose is
to control the maximum risk considered tolerable. Of course, the potential risk
may be greater than what was expected. The market could go limit up (or down)
or have a large overnight gap. Trading without a money management stop is like
flying in a rickety old plane without a parachute.
The issue is not whether a money management stop should be used. Rather,
it is determining the optimal placement of the stop.

There are many ways to decide
where to place money management stops, The simplest placement occurs by
assessing the maximum amount of money that can be risked on a given trade.
Another way to set the money management stop is on the basis of volatility.

In volatile markets and periods, it may be a good idea to give trades more room to breathe, i.e., to avoid
having the stop so close to the market that potentially profitable trades get stopped
out with losses.
A good way to set a money management stop is on the basis, of a price barrier,
such as a trendline or support/resistance level. In such cases, the stop also
serves as a critical threshold exit.

As a stop gets tighter, the percentage of winning trades will decrease. The stop
eventually ends up sacrificing most of what would have been profitable trades. On the
other hand, if the stop is too loose, although the winning trades are retained, the
adverse excursion on those winners, and the losses on the losing trades, will quickly
become intolerable. The secret is to find a stop that effectively controls losses with
out sacrificing too many of the trades that provide profits.

Trailing Exits

A rrailing exit is usually implemented with a so-called trailing stop. The purpose
behind this kind of exit is to lock in some of the profits, or to provide protection
with a stop that is tighter than the original money management stop, once the market
begins to move in the trade’s favor.
Once it is in place, a good trailing stop can serve both as an adaptive money
management exit and as a profit-taking exit, all in one! As an overall exit strategy,
it is not bad by any means. Trailing stops and money management stops work hand
in hand. Good traders often use both, starting with a money management stop, and
then moving that stop along with the market once profits develop, converting it to
a trailing stop.
How is the placement of a trailing stop determined? Many of the same principles
discussed with regard to money management exits and stops also apply to
trailing exits and stops. The stop can be set to trail, by a fixed dollar amount, the
highest (or lowest, if short) market price achieved during the trade. The stop can
be based on a volatility-scaled deviation. A moving threshold or barrier, such as a
trend or Gann line, can be used if there is one present in a region close enough to
the current market action. Fixed barriers, like support/resistance levels, can also be
used: The stop would be jumped from barrier to harrier as the market moves in the
trade’s favor, always keeping the stop comfortably trailing the market action.

Profit Target Exits

A projit target exit is usually implemented with a limit order placed to close out a
position when the market has moved a specified amount in favor of the trade. A
limit order that implements a profit target exit can either be fixed, like a money
management stop, or be moved around as a trade progresses, as with a trailing
stop. A fixed profit target can be based on either volatility or a simple dollar
amount.There are advantages and disadvantages to using a profit target exit. One
advantage is that, with profit target exits, a high percentage of winning trades can
be achieved while slippage is eliminated, or even made to work in the trader’s
favor.The profit target must be placed close enough so that there can be benefit
from an increased percentage of winning trades and a reduction in slippage, but it
should not be so close that the per-trade profit becomes unreasonably small. An
exit strategy does not necessarily need to include a profit target exit. Some of the
other strategies, like a trailing stop, can also serve to terminate trades profitably.

Time-Based Exits

Time-based exits involve getting out of the market on a market order after having
held a trade for a fixed period of time. The assumption is that if the market has not,
in the specified period of time, moved sufficiently to trigger a profit target or some
other kind of exit, then the trade is probably dead and just tying up margin. Since
the reason for having entered the trade in the first place may no longer be relevant,
the trade should be closed out and the next opportunity pursued.

Volatility Exits

A volatility exit depends on recognizing that the level of risk is increasing due to
rapidly rising market volatility, actual or potential. Under such circumstances, it is
prudent to close out positions and, in so doing, limit exposure. For instance, when
volatility suddenly expands on high volume after a sustained trend, a “blow-off
top might be developing. Why not sell off long positions into the buying frenzy?
Not only may a sudden retracement be avoided, but the fills are likely to be very
good, with slippage working with, rather than against, the trader! Another volatility
exit point could be a date that suggests a high degree of risk, e.g., anniversaries
of major market crashes: If long positions are exited and the market trends up
instead, it is still possible to jump back in. However, if a deep downturn does
occur, the long position can be reentered at a much better price!

Barrier Exits

A barrier exit is taken when the market touches or penetrates some barrier, such as a
point of support or resistance, a trendline, or a Fibonacci retracement level. Barrier
exits are the best exits: They represent theoretical barriers beyond which interpretation
of market action must be revised, and they often allow very close stops to be set, thereby
dramatically reducing losses on trades that go wrong. The trick is to find a good
barrier in approximately the right place. For example, a money management stop can
serve as a barrier exit when it is placed at a strong support or resistance level, if such
a level exists close enough to the entry price to keep potential loss within an acceptable
level. The trailing exit also can be a barrier exit if it is based on a trendline.

Signal Exits

Signal exits occur when a system gives a signal (or indication) that is contrary to
a currently held position and the position is closed for that reason. The system generating
the signal need not be the same one that produced the signal that initiated
the trade. In fact, the system does not have to be as reliable as the one used for
trade entry! Entries should be conservative. Only the best opportunities should be
selected, even if that means missing many potential entry points, Exits, on the
other hand, can be liberal. It is important to avoid missing any reversal, even at the
expense of a higher rate of false alarms. A missed entry is just one missed opportunity
out of many. A missed exit, however, could easily lead to a downsized
account! Exits based on pattern recognition, moving average crossovers, and
divergences are signal exits.

Forex Profit Monster Forex System v3-Updates

noreply@blogger.com (Anonymous) — Wed, 3 Apr 2013 15:01:00 GMT

Forex Profit Monster is an easy to use mechanical trading system that helps take the guesswork out of trading the Forex market. It's a manual strategy based on momentum and price action that includes a set of custom indicators and custom templates to automatically set up your charts.

Forex Profit Monster comes as a complete forex trading system including several e-books on how to trade Forex, so even if you've never traded before you'll get everything you need to learn to trade!

Forex Profit Monster is designed to be used with the FREE MT4 trading platform and will provide clear entry and exit signals on all Forex pairs.

If you're unfamiliar with MT4, Forex Profit Monster includes complete instructions on how to get your free copy of this professional charting platform,

and comes with a list of brokers that provide free practice accounts with real time Forex streaming data so you can practice and learn to trade without risking a penny of your money!

Forex Profit Monster will take your MT4 charts from looking like this:

if you can tell up from down and green from red, you can learn to be profitable trading with Forex Profit Monster!

The Forex Profit Monster 'Dashboard':

Forex Profit Monster is made up of the following components as numbered above:

1. FPM Entry Alert Arrow Indicator
2. FPM Fast Trend Indicator
3. FPM Slow Trend Indicator 4. FPM Trend Power Indicator
5. FPM Average Daily Range Indicator
6. FPM Real Price & Price Channel Indicator
7. FPM Support & Resistance Indicator
8. FPM Clock and Broker Spread Indicator
9. FPM Exit Arrow Indicator

All Forex Profit Monster components and how they're used is explained in detail in the 35 page Forex Profit Monster Installation Guide & User Manual.FOREX PROFIT MONSTER ENTRY METHOD
Entries are as easy as 1, 2, 3 with Forex Profit Monster!

1. Get an FPM Arrow Alert that the trend is changing;
2. Wait for the FPM Fast Trend to agree;
3. Wait for the FPM Slow Trend to agree... and you're in!

Below is an example of a "short" or "sell" trade:

FOREX PROFIT MONSTER EXIT METHOD

Exiting a trade with Forex Profit Monster is just as easy. You have 3 choices of how to exit;

1. Exit at the FPM Support or Resistance (automatically plotted on the chart) or...
2. Exit when you get an FPM Exit Arrow (small white arrow) or...
3. Exit when the FPM Fast Trend Indicator no longer agrees with the FPM Slow Trend Indicator.

See the example below of the three types of exits:

Download

download Forex Profit Monster v3-Updates

noreply@blogger.com (Anonymous) — Wed, 3 Apr 2013 14:15:00 GMT

Method of work:                                 HERE



                                                                      Download

Forex Trading Calendar

noreply@blogger.com (Anonymous) — Sun, 31 Mar 2013 15:24:00 GMT

Forex Trading Calendar

Time *	Currency	Description	Importance	Actual	Forecast	Previous
Mon, 25 Mar
01:00	EUR	(GREECE) Market Holiday	Medium
01:00	COU	Market Holiday	Medium
01:00	EUR	(Eurozone) ECB Deadline to Agree on Cyprus Bailout	High
08:00	GBP	Nationwide House Prices (nsa) (25th-29th) (Mar), % y/y	Medium		0.8	0.0
08:00	GBP	Nationwide House Prices (sa) (25th-29th) (Mar), % m/m	Medium		0.2	0.2
09:00	CZK	Business Confidence (Mar), index	Medium	2.2		2.3
09:00	CZK	Consumer Confidence (Mar), index	Medium	-20.8		-22.3
09:00	CZK	Consumer and Business Confidence (Mar), index	Medium	-2.4		-2.6
09:00	TWD	Commercial Sales (Feb), % y/y	Medium			7.71
10:00	EUR	(ITALY) ISAE Consumer Confidence (Mar), index	Medium		85.5	86
12:30	BRL	Survey of Expectations	High
17:00	GBP	U.K. Commons Treasury Panel hears testimony on budget	Medium
22:45	NZD	Trade Balance (Feb), NZD mn	Medium		-12	-305
Tue, 26 Mar
01:00	KRW	Japan‚ South Korea and China begin free trade talks	Medium
01:00	HUF	NBH MPC meeting - Base Rate	High
09:30	SEK	PPI (Feb), % y/y	Medium		-3.5	-2.9
09:30	SEK	PPI (Feb), % m/m	Medium		-0.2	0.0
10:00	TRY	Foreign Tourist Arrivals (Feb), % y/y	Medium			12.5
11:00	GBP	U.K. Commons Treasury Panel hears OBR testimony on budget	Medium
12:00	GBP	CBI Distributive Trades (Mar), % bal	Medium		13	8
13:00	TRY	CBT - 1 Week Repo Rate (Mar), %	High		5.5	5.5
13:30	USD	Durables ex transport (Feb), % m/m	Medium		0.9	2.3
13:30	USD	Durable goods orders (Feb), % m/m	Medium		3.8	-4.9
13:30	USD	Durables ex defence (Feb), % m/m	Medium		2.8	-0.4
14:00	USD	S&P Case-Shiller Home Price (Jan), % y/y	Medium		7.9	6.84
14:00	HUF	NBH Monetary Council - Base Rate (Mar), %	High		5	5.25
15:00	USD	Consumer Confidence (Mar), index	Medium		69	69.6
15:00	USD	New Home Sales (Feb), k	Medium		425	437
15:15	GBP	U.K. Commons Treasury Panel questions Osborne on budget	Medium
Wed, 27 Mar
01:00	USD	Deadline for Enactment of New U.S. Spending Bill	High
01:00	GBP	BoE Financial Committee Release Regulator Capital Report	Medium
01:00	INR	Market Holiday	Medium
01:30	AUD	RBA releases Financial Stability Review	Medium
08:00	EUR	(GERMANY) GFK Consumer Sentiment (Apr), index	Medium		5.9	5.9
08:45	EUR	(FRANCE) GDP (Final) (Q4), % y/y	Medium		-0.3	-0.3
08:45	EUR	(FRANCE) GDP (Final) (Q4), % q/q	Medium		-0.3	-0.3
09:00	SEK	Consumer Confidence (Mar), index	Medium		1	-1
09:00	SEK	Manufacturing Confidence (Mar), index	Medium		-8	-11
09:30	EUR	(NETHERLANDS) GDP (Final) (Q4), % q/q	Medium		-0.2	-0.2
09:30	SEK	Retail sales (nsa) (Feb), % y/y	Medium			1.9
09:30	SEK	Trade Balance (nsa) (Feb), SEK bn	Medium			6
09:30	EUR	(NETHERLANDS) GDP (nsa) (Final) (Q4), % y/y	Medium		-0.9	-0.9
09:30	SEK	Retail sales (sa) (Feb), % m/m	Medium		-0.3	0.1
10:30	GBP	GDP (3rd Est.) (Q4), % y/y	High		0.3	0.3
10:30	GBP	GDP (3rd Est.) (Q4), % q/q	High		-0.3	-0.3
11:00	EUR	(Eurozone) Industrial Sentiment (Mar), index	Medium		-12	-11.2
11:00	EUR	(ITALY) Retail sales (sa) (Jan), % m/m	Medium			0.2
11:00	EUR	(ITALY) Retail sales (nsa) (Jan), % y/y	Medium			-3.8
13:30	CAD	CPI - BoC core rate (Feb), % y/y	High		0.9	1
13:30	CAD	CPI - BoC core rate (Feb), % m/m	High		0.3	0.1
13:30	CAD	CPI (Feb), % m/m	High		0.7	0.1
13:30	CAD	CPI (Feb), % y/y	High		0.8	0.5
15:00	USD	Pending Home Sales (Feb), % m/m	Medium		0.7	4.5
18:00	USD	Fed's Kocherlakota speaks on "Improving the Outlook with Better Monetary Policy" in Minneapolis	Medium
22:45	NZD	Building Permits (Feb), % m/m	Medium		3	-0.4
Thu, 28 Mar
00:50	JPY	Retail Sales (Feb), % y/y	Medium		-1.3	-1.1
01:00	TWD	CBC MPC meeting - Benchmark Interest Rate	High
01:00	ROL	NBR MPC - Base Rate (Mar), %	High		5.25	5.25
01:00	COU	Market Holiday	Medium
01:00	PHP	Market Holiday	Medium
01:00	MXV	Market Holiday - Holy Thursday	Medium
01:00	PEN	Market Holiday - Holy Thursday	Medium
01:00	ISK	Market Holiday	Medium
01:00	VEF	Market Holiday	Medium
01:00	NOK	Market Holiday	Medium
01:00	EUR	(GERMANY) Market Holiday	Medium
01:00	ARS	Market Holiday	Medium
07:00	ZAR	M3 Money Supply (Feb), % y/y	Medium		7.06	6.75
07:00	ZAR	Private Sector Credit (Feb), % y/y	Medium		8	8.64
08:00	EUR	(GERMANY) Retail Sales (Feb), % m/m	Medium		-0.5	3
08:00	EUR	(GERMANY) Retail Sales (Feb), % y/y	Medium		2.0	2.4
09:00	HUF	Unemployment (Feb), %	Medium		11.6	11.2
09:55	EUR	(GERMANY) Unemployment Change (Mar), k	Medium		-2	-3
10:00	TWD	CBC - Benchmark Interest Rate (Mar)	High		1.875	1.875
10:00	EUR	(ITALY) ISAE Business Sentiment (Mar), index	Medium		88	88.5
10:00	EUR	(Eurozone) M3 Money Supply (sa) (Feb), % 3m y/y	Medium		3.3	3.5
10:00	EUR	(Eurozone) M3 Money Supply (sa) (Feb), % y/y	Medium		3.2	3.5
10:30	ZAR	PPI (Feb), % y/y	Medium		5.7	5.8
10:30	ZAR	PPI (Feb), % m/m	Medium		0.7	0.5
12:30	BRL	Q1 Inflation Report	High
13:00	CZK	CNB MPC - Repo Rate (Mar), %	High		0.05	0.05
13:00	ZAR	Budget (Feb), ZAR bn	Medium			-29.57
13:00	ZAR	Trade Balance (Feb), ZAR bn	Medium		-13.4	-24.5
13:30	CAD	GDP (Jan), % m/m	High		0.1	-0.2
13:30	USD	Core PCE Price Index (Final) (Q4), % q/q ann	Medium		0.9	0.9
13:30	USD	Initial Claims (24-Mar), k	Medium		338	336
13:30	USD	GDP Annualised (Final) (Q4), % q/q ann	High		0.5	0.1
14:45	USD	Chicago PMI (Mar), index	Medium		56.3	56.8
Fri, 29 Mar
00:30	JPY	CPI Core (Tokyo) (Mar), % y/y	Medium		-0.6	-0.6
00:30	JPY	Real Household Spending (Feb), % y/y	Medium		0.1	2.4
00:30	JPY	Unemployment (Feb), %	Medium		4.2	4.2
00:30	JPY	CPI Core (Nation) (Feb), % y/y	Medium		-0.4	-0.2
00:50	JPY	Industrial Production (Prelim.) (Feb), % m/m	Medium		2.5	0.3
00:50	JPY	Industrial Production (Prelim.) (Feb), % y/y	Medium		-8.5	-5.8
01:00	PEN	Market Holiday - Good Friday	Medium
01:00	MXV	Market Holiday - Good Friday	Medium
01:00	GLOBAL	Market Holiday (AR‚ AU‚ AT‚ BG‚ BE‚ BR‚ CA‚ CH‚ CO‚ DE‚ DK‚ EC‚ EE‚ ES‚ FI‚ FR‚ GB‚ GR‚ HK‚ HU‚ IS‚ IN‚ ID‚ IE‚ IT‚ LT‚ LV‚ LU‚ MX‚ NL‚ NZ‚ NO‚ PE‚ PH‚ PL‚ PT‚ SG‚ SK‚ SE‚ US‚ ZA)	Medium
01:00	CZK	Market Holiday (applies to exchange trading only)	Medium
08:45	EUR	(FRANCE) PPI (Feb), % m/m	Medium		0.2	0.5
08:45	EUR	(FRANCE) PPI (Feb), % y/y	Medium		0.9	1.4
09:00	HUF	PPI (Feb), % y/y	Medium		0.8	-0.9
09:00	TRY	Trade Balance (Feb), USD bn	Medium		-7.0	-7.29
09:00	HUF	Trade Balance (Final) (Jan), EUR mn	Medium			317.9
11:00	EUR	(ITALY) HICP (Prelim.) (Mar), % y/y	Medium		1.8	2
11:00	EUR	(ITALY) HICP (Prelim.) (Mar), % m/m	Medium		2.3	-0.2
13:30	USD	Personal income (Feb), % m/m	Medium		0.9	-3.6
13:30	USD	Personal spending (Feb), % m/m	Medium		0.6	0.2
13:30	USD	Core PCE Price Index (Feb), % m/m	Medium		0.1	0.1
14:55	USD	Univ of Mich Sent. (Final) (Mar), index	Medium		72.9	71.8

Forex Holidays - When Forex Market Open?

noreply@blogger.com (Anonymous) — Sun, 31 Mar 2013 15:19:00 GMT

Forex Holidays - When Forex Market Open?

Date	Country	Currency	Description
01.01.2013	France	CFP	New Year's Day
01.01.2013	China	CNY	New Year's Day
01.01.2013	New Zealand	NZD	New Year's Day
01.01.2013	Australia	AUD	New Year's Day
01.01.2013	Canada	CAD	New Year's Day
01.01.2013	Switzerland	CHF	New Year's Day
01.01.2013	United Kingdom	GBP	New Year's Day
01.01.2013	U.S.	USD	New Year's Day
01.01.2013	Japan	JPY	New Year's Day
02.01.2013	Japan	JPY	Bank Holiday
02.01.2013	Switzerland	CHF	Bank Holiday
02.01.2013	China	CNY	New Year's Day
02.01.2013	New Zealand	NZD	New Year's Day
03.01.2013	Japan	JPY	Bank Holiday
03.01.2013	China	CNY	New Year's Day
14.01.2013	Japan	JPY	Coming of Age Day
21.01.2013	U.S.	USD	Martin Luther King's Day
26.01.2013	Australia	AUD	Australia Day
06.02.2013	New Zealand	NZD	Waitangi Day
11.02.2013	Japan	JPY	Independence Day
12.02.2013	China	CNY	Lunar New Year
13.02.2013	China	CNY	Lunar New Year
14.02.2013	China	CNY	Lunar New Year
15.02.2013	China	CNY	Lunar New Year
18.02.2013	U.S.	USD	President's Day
20.03.2013	Japan	JPY	Vernal Equinox Day
29.03.2013	United Kingdom	GBP	Good Friday
29.03.2013	Canada	CAD	Good Friday
29.03.2013	Australia	AUD	Good Friday
29.03.2013	New Zealand	NZD	Good Friday
29.03.2013	Switzerland	CHF	Good Friday
01.04.2013	France	CFP	Easter
01.04.2013	United Kingdom	GBP	Easter
01.04.2013	Canada	CAD	Easter
01.04.2013	New Zealand	NZD	Easter
01.04.2013	China	CNY	Labor Day
01.04.2013	Switzerland	CHF	Easter
01.04.2013	Australia	AUD	Easter
04.04.2013	China	CNY	Ching Ming Festival
05.04.2013	China	CNY	Ching Ming Festival
06.04.2013	UnitedKingdom	GBP	Good Friday
09.04.2013	NewZealand	NZD	Easter
09.04.2013	United Kingdom	GBP	Easter
25.04.2013	Australia	AUD	Veterans Day
25.04.2013	New Zealand	NZD	Veterans Day
29.04.2013	Japan	JPY	Showa Day
29.04.2013	China	CNY	Labor Day
30.04.2013	China	CNY	Labor Day
01.05.2013	France	CFP	Labour Day
01.05.2013	Switzerland	CHF	Labour Day
03.05.2013	Japan	JPY	Constitution Day
04.05.2013	Japan	JPY	Greenery Day
05.05.2013	Japan	JPY	Children's Day
06.05.2013	Japan	JPY	Children's Day (Observed)
06.05.2013	United Kingdom	GBP	Early May
08.05.2013	France	CFP	Victory Day
09.05.2013	Switzerland	CHF	Ascension Day
20.05.2013	Canada	CAD	Victoria Day
20.05.2013	Switzerland	CHF	Day of the Holy Spirit
27.05.2013	United Kingdom	GBP	Spring Bank Holiday
27.05.2013	U.S.	USD	Memorial Day
26.08.2013	United Kingdom	GBP	Summer Bank Holiday
03.06.2013	New Zealand	NZD	Queen's Birthday
10.06.2013	Australia	AUD	Queen's Birthday
10.06.2013	China	CNY	Dragon Boat Festival
11.06.2013	China	CNY	Dragon Boat Festival
12.06.2013	China	CNY	Dragon Boat Festival
01.07.2013	Canada	CAD	National Day
04.07.2013	U.S.	USD	Independence Day
14.07.2013	France	CFP	National Day
15.07.2013	Japan	JPY	Marine Day
01.08.2013	Switzerland	CHF	Swiss National Day
05.08.2013	Australia	AUD	August Bank Holiday
02.09.2013	Canada	CAD	Labor Day
02.09.2013	U.S.	USD	Labor Day
15.09.2013	France	CFP	Assumption Day
16.09.2013	Japan	JPY	Respect for the Aged Day
19.09.2013	China	CNY	Mid-Autumn Holidays
20.09.2013	China	CNY	Mid-Autumn Holidays
23.09.2013	Japan	JPY	Autumnal Equinox Day
01.10.2013	China	CNY	Independence Day
02.10.2013	China	CNY	Independence Day
03.10.2013	China	CNY	Independence Day
04.10.2013	China	CNY	Independence Day
07.10.2013	Australia	AUD	Labor Day
07.10.2013	China	CNY	Independence Day
14.10.2013	U.S.	USD	Columbus Day
14.10.2013	Canada	CAD	Thanksgiving Day
14.10.2013	Japan	JPY	Health and Sports Day
28.10.2013	New Zealand	NZD	Labor Day
01.11.2013	France	CFP	All Saints' Day
03.11.2013	Japan	JPY	National Culture Day
04.11.2013	Japan	JPY	National Culture Day (observed)
11.11.2013	Canada	CAD	Memorial Day
11.11.2013	France	CFP	Armistice Day
11.11.2013	U.S.	USD	Veterans Day
23.11.2013	Japan	JPY	Labor Day
28.11.2013	U.S.	USD	Thanksgiving Day
23.12.2013	Japan	JPY	The Emperor's Birthday
25.12.2013	Australia	AUD	Christmas
25.12.2013	Canada	CAD	Christmas
25.12.2013	New Zealand	NZD	Christmas
25.12.2013	Switzerland	CHF	Christmas
25.12.2013	United Kingdom	GBP	Christmas
25.12.2013	France	CFP	Christmas Day
25.12.2013	U.S.	USD	Christmas
26.12.2013	Canada	CAD	Boxing Day
26.12.2013	New Zealand	NZD	Boxing Day
26.12.2013	Australia	AUD	Boxing Day
26.12.2013	United Kingdom	GBP	Boxing Day
26.12.2013	Switzerland	CHF	Boxing Day
31.12.2013	Japan	JPY	Bank Holiday

Extreme TMA System

noreply@blogger.com (Anonymous) — Sun, 31 Mar 2013 10:07:00 GMT

At the request of many of you, I am starting today what I hope will become a thriving laboratory of ideas that will make each of us, each day, a little better trader than we were. Firstly, I must say that I have never done something like this and I will rely on the help and contribution of you to make it a success.

The history of a trader, like my own, is a tough road full of failure, despair and loneliness, as well as fulfillment, excitement and triumph. It is a hard road full of obstacles and temptations to lead you astray from the path and in the end, only a determined few will succeed in conquering the many mines and potholes in the way and acquiring the discipline and knowledge necessary to succeed.

My own history is a good example of what most of us go through. Luckily, because I had a successful company, I was able to draw funds to pay my "tuition" in the University of Trading. Over the first few years I suffered very heavy losses. Read many books, talked to everyone that I met that knew something about the field. Over and over again, I stumbled over the same obstacles. I couldn´t figure out why if I had been successful in other areas of my life, I was having such hard time with this. I quit several times, only to give it "one more try" and continue on my quest. As I look back on these years now, I truly believe they were necessary to forge the discipline and determination necessary to succeed. Yes, there are traders that have never experienced the "Valley of Despair", but they are few and far between. For the rest of us the way is hard but full of promise and a daily constant battle to control ones ego and remember the lessons learned. After 30 years, I can say I have learned a bit, but there is more to learn every day. The finish line is never reached and that is the wonder and thrill of this profession.

Up front I ask for your help and contribution. Let us be constructive and share our knowledge. If we do, this will have been worth while.

The System: Extreme TMA.

The market, like a pendulum, is a never ending sequence of extremes. It forever tries to reach the mean but never succeeds, constantly overshooting it´s mark, reversing and trying it again but always failing to reach balance. This system attempts to capture those extremes. It is a compendium of my understanding of the market, brought to it´s simplest expression.

The principles are not complicated. The first indicator, the TMA shows us the average of the path that the price action in the market is following. As such, it is a backward looking indicator and attempts to determine the future from the recent history. It corrects itself by repainting itself. It has two outer bands that show us the outer boundaries of price movement that we are searching for. Our second indicator, the TMA Slope indicator will show us the relative change in the slope of TMA as compared to previous candles. It determines in which direction a trade must be placed and also shows divergences to price. For example, if price is rising but the slope indicator is dropping, it is announcing a high probability of a drop in price in the near future. The steeper the drop in the indicator the higher the probability of a drop in price. The same concept applies in reverse in the case of a dropping price and a rising slope indicator. A third use of the slope indicator is for divergence detection. If you see 2 or 3 green mounds, each smaller than the one before it, there is a strong likelihood that price is about to drop. 2 or 3 Red mounds, each smaller than the one before it, indicates a high probability of a price rise. On the right side of the Slope indicator you will see the value (grey) of the current chart time frame. Above it the slope value of the D1 time frame and below the trade status (Ranging, Buy Only or Sell Only) of the current chart TF. The third indicator is TMA Slope MTF which gives us the slopes of all 3 time frames. The final indicator gives us the D1 slope values of all currency pairs. A great tool to determine which pairs are possible trades.

MTF TMA:

Included in the templates are 3 TMA indicators. The H4 TMA (dotted magenta lines), the D1 TMA (dashed blue lines) and the W1 TMA (dashed green lines). All 3 will be visible on a M15, H1 or H4 chart. The H4 time frame are for trades of 1 to 5 days and potential gain of 170 to 250 pips. The D1 time frame are for trades of 5 to 30 days and potential gain of 200 to 400 pips. If you set the chart to D1, you will only see the D1 and W1 TMAs. If you set the chart to W1, you will only see the W1 TMA. If you are a short term trader, a good alternative option is to add the H1 TMA and use the other 3 ( H4, D1, W1) for trend direction. Having several TMAs on one chart is extremely helpful for determining longer time frame trends and combined, they have high predictive value of future market moves.

Stop Loss Use:

There are various options in this department and I won´t recommend any particular one. A natural level to place your SL would be above a previous high for a short and below a previous low for a long. I myself use only an emergency SL very far away from the PA (100 Pips). If a trade goes against me, I will use Recovery Trades to exit the trade at breakeven. I have included detailed instructions describing the Recovery system in the Documents folder contained in the Packet.zip file. The extreme TMA system works much better when you leave price plenty of room to move.

Entry Rules:

1- We will first determine trend in the 3 TMAs by using the TMA Slope indicator values.

Ranging TMA (-0.40 to 0.40): Trades can be placed in both directions.
Buy Only TMA (Above 0.40): Place ONLY Long trades.
Sell Only TMA (Below -0.40): Place ONLY Short trades.
Super Range: Above 0.80: Hold longs till slope value drops under 0.80, at which point you should close all longs.
Below -0.80: Hold shorts till slope value climbs above -0.80, at which point you should close all shorts.

H4, D1, W1 slope values must be either Ranging or higher for Longs or Ranging or lower for shorts.

2- Once trade direction is determined, we will look at the D1 and W1 TMA and determine that there is enough room for the trade to move in your direction before reaching the outer band of both. Example: If you decide to go short, there must be enough room between the current price and the lower D1 band (At least 150 pips) and the lower W1 band (At least 250 pips).

3- We will now wait for price to climb above the top band of the H4 and D1 TMAs at the same time, before placing a Short trade or below the bottom band of the H4 and D1 TMAs at the same time, before placing a Long trade.

4- The Trigger: Once Rule 3 is complied with, the trade will be entered once price turns around and touches the H4 Upper TMA band for Shorts or the H4 Lower TMA band for Longs. Refer to Rule one again before entering trade to make sure that the 3 TMA slope values are still Ranging or in the direction of your trade. If they are not, wait until they return to the correct slope values for your trade and enter then.

Even though not explicitly mentioned in the rules, it is always a good idea to sell from under tested support and buy from above tested resistance. This is always a good rule to follow. It will prevent getting into a trade too early and will increase your percentage of winners. Valid support and resistance areas are: 50 or 200 MAs, TMA centerlines, daily, weekly and monthly pivot lines, etc.

Exit Rules for each type of trade:

Short Term Trade (If used):

Close the trade when price reaches the opposite H1 TMA band. Reenter trade when price retraces to the centerline of the H1 TMA. Make sure all slope values continue to be either ranging or in the direction of your trade before reentering. You can do this several times during a strong trending move.

Medium Term Trade (Standard trade):

Close the trade when price reaches the opposite H4 TMA band. Reenter trade when price retraces to the centerline of the H4 TMA. Make sure all slope values continue to be either ranging or in the direction of your trade before reentering. You can do this several times during a strong trending move.

Position Trade:

Close the trade when price reaches the opposite D1 TMA band. Reenter trade when price retraces to the centerline of the D1 TMA. Make sure all slope values continue to be either ranging or in the direction of your trade before reentering. You can do this several times during a strong trending move.

Attachments:

I am enclosing a Template and Indicators compressed as a Packet.zip file. Extract it and as usual, place the indicators (.mq4 and .ex4 files) in the Experts/Indicators folder of your MT4 installation. Place the Template (.tpl file) in the Templates folder (not in the Experts/Templates folder). The Extreme TMA - New Version template is designed to follow one currency pair on one screen. Also included is the new Dashboard (!ExtremeTMA v37) which informs us of what pairs are complying with the rules in real time.

That´s it ! The system is simple in concept and easy to trade. I recommend that you handle it with care. Use demo accounts or small lots until it shows itself to be consistently profitable and you acquire confidence in it. A trading system will only work consistently if you truly believe in it. As we move forward, I´m sure we will improve it and make it ever more reliable.

Good luck and welcome to our New Adventure !

Hall of Fame: The following members have collaborated or have made a positive impact on making this system a better one. The underlined names have made extraordinary contributions:

Crodzilla , shahrooz67, Paradox, lologo, NanningBob, Zznbrm, X-Man, Favorite, EasyRyder, mladen, Argonod, Olarion1975, Ever E. Man, Faxxion, flaw, Riddermark, slowpokeyjoe, beto21 cwb, Trainman, Baluda, bassramy.

Download

Download Extreme TMA System

noreply@blogger.com (Anonymous) — Sun, 31 Mar 2013 10:04:00 GMT

Method of work:    HERE

Download Extreme TMA System

Forex swapping

noreply@blogger.com (Anonymous) — Sun, 31 Mar 2013 09:07:00 GMT

Everything You Need To Know About Forex Swap or Rollover Rates

Many forex traders, particularly novices, may be very confused about forex swaps that are more commonly known as ‘rollover rates’. To start understanding this subject properly, you need to understand that all forex trades must be settled in two business days from their activation date.

The which means of this, is that in the event you opened a currency trade, you have to close it within two days. Nevertheless, you might have seen currency trades that run for days or weeks, not only two days.

If traders wish to extend the trade beyond the two day limit, then they should close their position prior to 5.00pm EST on the settlement day and re-open it the next trading day. This action has the effect of extending the settlement by two more trading days. These days it’s being carried out automatically by all Forex brokers, so you do not need to really worry about it. Nevertheless, there is definitely a reason why you should be aware of this procedure.

This strategy is called rollover and is implemented using a forex swap agreement. However, this process also incurs a monetary loss or gain depending on the rate of interest differential between the two currencies of the pair that you are trading. This process might be repeated daily till the position is closed. As such, the rollover procedure entails closing a position and then re-opening it although at a slightly different price level. This distinction is the amount of debit or credit paid or earned that reflects the interest differential between the two currencies comprising the applicable currency pair being traded.

From an interest rate perspective, you’ll benefit from trading lengthy the currency with the greater yield. These Rollover interest adjustments are calculated utilizing the following formula:

I = P x D / (360 x E), where

I = Daily interest to be credited or debited
P = Value of your position in the second currency
E = Exchange Rate of the two currencies
D = Overnight interest differential of the two currencies of interest

For instance, assume you hold $10,000 USDCAD, the exchange rate for the pair is 0.9000 and also the interest rate is 5% for the CAD and 2% for the USD.

Rollover interest = $[(10,000*(5%-2%))/ (360*0.9000)] = $92.59

As you hold the higher yielding CAD, this amount could be added to your account. If, on the other hand you had held the USD, then the rollover charge would have been deducted out of your account balance. In the second case, you could have saved yourself this fee by considering closing the trade rather than rolling it over.

Remember this automated rollover is done each day that your trade is open. If you’d prefer to know how much you are credited or debited every day for a currency pair, you need to ask your broker what is the rollover rate for that pair. Also note that on Wednesday evening, most brokers credit or debit x3 (3 times) as much rollover rate compared to other days, to cover the rollover for the weekend.

Forex Pros – What’s The key To Effective Trading

There are lots of novices that enter in to the Forex market with high hopes of getting wealthy overnight. They may have been inspired by the success of Forex Pros and they now want to enjoy the same type of success themselves.

There is absolutely nothing wrong in following in the footsteps of successful people. However they should be willing to discover the key of their achievement and discipline themselves to adhere to and implement their strategies consistently.
What is the Forex Pros Secret to Success

First of all, novices have to realize that there is no secret formula to successful trading. Most Forex Pros are effective due to their immense knowledge and years of experience trading in the marketplace. Their familiarity using the method and also the insight that they had gained through the years now assist them to judge the movements correctly in order to make accurate predictions. This ability comes by experience alone and can’t be acquired via a secret formula.

However, you will find certain great practices that Forex Pros implement that assists them to possess an edge over the rest of the traders. Listed here are a few of them which might be practiced by any trader to gain an advantage in the market.
The first step is to identify emerging trends

Identifying an emerging trend is one of the foremost elements of successful trading. It might be a difficult exercise for many novices but nevertheless, they need to learn the abilities necessary to be able to spot trends in the market. As soon as they get the hang of it, they would find this exercise simpler as they acquire much more experience over time.
Secondly, one should setup a stop order or exit limit

Lack of discipline is one from the main issues with novices. They might want to hold on to a losing trade against the market. In order to stop this, one ought to setup an exit limit or stop order. This will trigger the order after the price drops beneath a specific worth. This will stop the trader from suffering substantial losses if the marketplace doesn’t reverse for a considerable period of time.
Third, traders have to examine their trading pattern

Many novices treat Forex trading like gambling. If they suffer a loss, they just brush it aside and attempt once more, hoping they would have much better luck this time. They by no means stop and believe why they suffered a loss within the first place. They just trythings randomly, hoping for luck to come to their rescue. On the other hand, Forex Pros examine their trading pattern to see why each outcome went the way it did. This assists them determine what strategies really work for them and which ones do not. Therefore, examining one’s own trading pattern is very important for successful trading in the future.

Rather than utilizing a simple formula, Forex Pros follow these effective practices to assist them trade effectively. These qualities come with practice and experience and cannot be created overnight.

Forex Trading Strategies

noreply@blogger.com (Anonymous) — Sun, 31 Mar 2013 08:54:00 GMT

All About Forex Trading Strategies

Select a forex broker who’s known for rapid execution of orders; it might make all of the difference in successfully implementing a Stop Loss order. You should carry on monitoring a trend even following you have spotted it, this is to ensure that you can rectify your errors in case you spotted the trend wrongly or the trend reverses suddenly due to an incident. Identifying the marketplace sentiments are extremely important as traders have a tendency to stampede and act on intuitions throughout breaking of any news occasion.

Durable Goods Stock is really a essential economic indicator because it signals the country’s stock of raw materials and machineries and necessity of import and domestic production thus affecting the price of customer pairs. The higher the leverage, the higher is your opportunity of creating an enormous profit, and the higher will be the probability that you simply might have a massive loss in comparison to a lower leverage. Real estate purchases and construction is really a essential economic indicator as it greatly dictates the rates of interest of a country which in turn features a huge effect around the costs of currency pairs.

Take Profit orders are completely opposite to Stop Loss orders as they demarcate the maximum amount of profit from your trade, which once attained will automatically close the trade for you. Consumer Price Index (CPI) is a very essential financial indicator as it measures the average cost a country’s residents have paid for buying domestically and internationally created commodities. Countries that are dependent on import of oil from other countries tend to possess a weaker currency in the occasion of rise in oil costs.

Assistance and resistance are the price levels at which marketplace trends tend to reverse; identifying these will help you in choosing your forex trading strategy from advance. It’s recommended to open an account having a Forex market broker with a low leverage and then move on to higher leverages as soon as you identify a strong trend in the Forex market.

An honest Forex broker promotes fixed spreads and will not alter the currency pairs prices. When you effectively decipher a trend, you are able to predict the future behaviours of the currency’s price and buy or sell accordingly. Financial indicators or marketplace snippets are periodically released by government and private companies and a trader must adhere to these carefully to be able to successfully predict the trend in currency prices.

Huge change in market prices of currency pairs generally arise when unexpected economical or political events are reported. Playing big at one go implies greater risk and greater probability of incurring heavy losses. Loses are common whilst dealing with Forex markets but one loss shouldn’t demotivate you to take part in future trading within the marketplace. Product Price Index (PPI) is a very important economic indicator because it measures the average price received by domestic producers for the domestic and international sell of their goods.

Simple moving average technique of identifying trends uses every price point over the specified time period equally, that are added and averaged to obtain the trend line.

Forex Trading – What is Stop Loss

What Is Stop Loss In Forex Trading

In Forex trading, knowing where to location stop loss is a major ingredient for success. A good quantity of traders neglect this important aspect of trading and end up causing a great deal of unnecessary damage to their trading accounts. Stop loss refers to an order placed in the marketplace to stop you from incurring losses if price goes against you. When in a lengthy position, a stop loss order is usually placed some distance beneath the point of entry. And, when in a brief position, a stop loss order is usually placed some distance above the point of entry.

You will find various methods you can use to set stops, a few of which are

Equity Stop

Volatility Stop

Chart Stop

Equity Stop

Equity stop, also referred to as percentage stop, will be the most typical type of stop and it uses a predetermined fraction of a traders account to compute the distance the stop loss order ought to be placed from entry. For instance, you can be willing to danger 3% of your account in a trade; therefore, you’ll use this position size in computing where to place your stop loss order.

Volatility Stop

Volatility stop refers to placing a stop based on the quantity a market can possibly move over than a given time. This technique ensures the proper stop loss levels are placed so as to stop being taken out of a trade because of the random rise and fall of price. For instance, if you are using the swing trade strategy and you wish to trade the EUR/USD, you’ll not place your quit loss at 20 pips. This is simply because EUR/USD moves by about 100 pips each day.
Chart Stop

Chart stop is putting stops according to what the charts are saying. A good way of achieving this is putting stops according to substantial help and resistance levels. When you place stops beyond support and resistance levels, you can rest assured that your stops cannot be hit because they can potentially hold price from pushing via them.
In conclusion, stop losses are of essence in cutting down your losses when trading currencies. Regardless of what the marketplace does, when you have a correctly placed stop loss order, you wont be spending sleepless nights. The Forex marketplace is usually very dynamic in nature, so you never know when price will turn against you. Therefore, it’s important to place some preventive measures in place.

MACD signal reverse

noreply@blogger.com (Anonymous) — Sat, 30 Mar 2013 15:27:00 GMT

Hi traders,

Simple system. Indicator used double line macd with 12, 26, 9 settings. Time frame 5 minutes. Buy when macd line cross zero line from above, sell when macd line cross zero line from below. Stop loss 30 pips. Take profit anything above 60 or use strategy which suites you. The point is you do not cut your profits short. Stop using signals once the trade is in profit. All comments to improve, ridicule and even ditch the system (if not useful) are welcome.

Thank you

For example

Buy/Sell Line for Daily Chart

noreply@blogger.com (Anonymous) — Sat, 30 Mar 2013 14:47:00 GMT

I have been looking for a system based on daily charts because I have a full-time job and can only look at the charts 2-3 times per day max. I read the thread started by 60minuteman titled "Buy sell line trading", and liked the idea of using price action for entries. Even though his thread was not mainly focused on daily charts, I did some backtesting on EUR/USD daily chart for the past 3.5 years and found it to be worth pursuing.

Here are my backtest results from the start of September 2009 through the end of February 2013 using IronFX demo data (because they do not have Sunday candles):
109 trades
45 wins
22 breakeven
42 losses
Take profit is always 2 times the stop loss amount
7,074 pips
48R (which means it made a total of 48 times what was risked on each individual trade)

Here are my rules for trading which are slightly different than 60minuteman's:
Look for buys if the candle has closed above the 50 simple moving average and if the 50SMA value is higher than the value 4 candles back.
The signal candle will be a candle that has closed higher than the previous candle's open, and that previous candle must have an open that is equal to or higher than its close.

Another type of signal candle will be one that has the lowest low of the last 3 completed candles and has a close that is in the upper 25% of the candle height. If this candle does not have a close in the upper 25% but the following candle does, then that candle will be the signal candle.
Set a buy order 0.1 pip plus spread above the high of the signal candle.
If the order is not triggered by the end of the day, then cancel the order.
The stoploss will be 0.1 pip below the low of the signal candle.
Move the stop to breakeven after price has advanced the same number of pips that you are risking.

The take profit is always 2 times the amount of the stoploss.
For sells, the rules are the same just vice versa.
I did not use any S/R lines or any discretion because I wanted as little bias in the backtesting as possible.

My main reason in starting this thread is to find someone who might be interested in making an EA of this system for the purpose of backtesting. I don't have a lot of time to backtest since I work a lot and do the backtesting manually. I would like to find out if this system is profitable with other currency pairs. I'll attach my spreadsheet of the results for your information. I'll try to post some pics of examples later.
Thanks.

Here are 2 examples of trades:

The green arrow signifies a signal candle that had the lowest low of the last 3 candles and closed in the upper 25% of the candle height. The red moving average line is the 50SMA which has a higher value than 4 candles back. The green horizontal line is the entry buy which triggered on the candle after the signal candle. The stop was moved to breakeven on the Jan 10 candle after advancing the same number of pips that were risked. The green check mark is the take profit level which is twice as much as the stop loss.

The yellow arrow signifies a signal candle that had a close higher than the open of the previous candle (also the previous candle had a close lower than its open). The red 50SMA is higher than 4 candles back. The yellow horizontal line is the entry buy which triggered on the candle after the signal candle. The yellow x mark is the stop out level.

EU Backtest.xlsx

Sonic R. System 2013

noreply@blogger.com (Anonymous) — Sat, 30 Mar 2013 05:23:00 GMT

Hi Fellow Traders,

My name is Sonic. I want you to read The 5 steps of Becoming the profitable trader (5 steps pdf) document before you do anything else in trading.

The Story

I have been trading for a near 4 years now (Since 2008) and been a blessing so far.
Just like many of you. I started out hunting for the holy grail <aka> indicators that gives buy/sell with 0 loss.
Soon, I found out that my trading statement is going no where, with messy charts and too many indicators to confirm. That causes the late signal trigger; minimizing my wins and maximizing my losses. I start to realise that indicators the one based on the prices happened can calculated according to the formulae, casuing them lagging behing thr price. movemment.

After reading many TA systems, books and LIVE trading, I have found out about there is no systems or indicators can really predict where the price will go. I became to understand the importance of Money Mangement, General trend, S & R.

The philosophy

Trading is a probability business.
Even you put tons of hours for a set up and it still can turn sour..
You can win and you can lose too.
It is your job to minimise your loss and maximize your win.
You will follow set of rules that will help you on the winning sides most of the time.

The Rise of Sonic R

Here is a simple, nice and profitable 15M swing system that I get inspired from Raghee 's book.
A Blindly followed Moving Averages system can be very successful in trending market, but I am around here long enough to witness the failure of it, when the market goes into ranging periods.
So, I fine tuned the system with understanding of Volume Analysis,S & R, Wave analysis and Price action, and I am getting high success rate on my position/swing trading.
I'd like to call it Sonic R.
Now, it is not the magic bullet, nothing is.
It is a simple EMA based yet effective system.
You can earn 50 to 400+ pips on a trade.

The Reason
And why am I sharing this, while I do not earn a penny from you for my time and effort? Because I believe Sharing is Caring.

The Setups/Rules of the system

Sonic Rules.

1. Do not Over trade big or trade during Asian Session.. Most of the best Set Up or Proper trend occur at/after London Opens. You shouldn't trade more than 5 trades a week..

2. Never add a losing positions aka average your positions.

3. You SL must wide enough to for the price to breath.. If you put it too tight, the chance of getting your SL hit is very high even though the price goes to direction that you wanted eventually.

I have put the "entry, exit, SL and TP" rules with all necessary indicators into "SonicR or SonicRV2 or SonicRV3" zip file.
SonicRV3 is created with better and more comprehensive examples..

You also can check out our best contributer Professor TAH's templates

Summary of Upgrade and Installation

Attached are new TAH indicators and starter templates for the Sonic R. System. This upgrade fixes and improves the indicators, described as follows (Red Headings). Download the zip file. Extract it to yield the two folders for black and white charts that contain the individual indicator and template files. Paste the indicator files into the MT4/experts/indicators folder. Paste the template files into the MT4/templates folder. Restart your MT4 application.

Control Panel

Occasionally the vLines were incorrectly displayed when shifting between AM and PM hours. This issue is fixed. For brokers with “tail end” Sunday sessions (typically any broker at GMT) the vLines would be stacked atop each other at the open of this short session. This issue is fixed. The average range formula is improved. And changes were made to colors in the Clock so that both black and white templates use the same colors for active market hours versus non-market hours in shades of gray.

FFCAL Panel

At times the panel did not show upcoming events, or did not show multiple same time high impact events. This seemed to be only when low impact events were selected to be displayed. This issue is fixed.

Line Dragon-Trend, Solid Dragon-Trend

Brokers with short Sunday sessions (typically any broker at GMT) lack the data required to make the Dragon and Trend continuous when applying a different TF configuration to the chart (example: using M15 TF configuration of Dragon-Trend on the M30 or H1 chart). New coding identifies when there is insufficient data, and compensates so that the Dragon and Trend can be displayed as continuous.

VSA Histogram

The “sound only” alert called for a sound wave file that is not resident in MT4. The MT4 “alert2.wave” file is now called. Also, the ShortName coding has been improved to recognize and display when either alert is “On”, but when the chart TF is M1, the alerts are (default to) “Off”.

Brief History of the Indicators

These new indicators were first released 04/04/2012. The new SonicR Control Panel combines and replaces the previous SonicR Chart Panel and SonicR Clock Panel. The release added back the market vLines and TzPivots that were excluded in the final release of the SonicR Chart Panel 07/16/2011. With a live data feed, new coding handles the vLines and user requested TzPivots without special inputs, and facilitates making the one special input needed to display them when there is no live data feed. The release also included the new SonicR Solid Dragon-Trend indicator. Highlights of these new indicators follow (Blue Headings).

Control Panel

Replaces the Chart Panel indicator. It includes the Clock Panel and accesses it’s coding to handle the time zone and Daylight Savings Time issues for proper year round vLines placement and TzPivots, while data feed is live. While feed is live, follow the instructions in the user notes to make the single input you will need to display the vLines and TzPivots whenever there is no live data feed. The default setting of this input is for a Broker at GMT. Both the Daily and Fibonacci formulas are included for pivots, and you can display mid-pivots. The default setting for TzPivots is GMT+3, the most widely used, but it can be changed. The “scale” placement of lines on the right of the chart adjusts automatically when the chart zoom is altered. An automatic indenting feature is included. The symbol display in the Panel is now clear of broker additions. The Clock automatically labels times matching Broker and Local times.

FFCAL Panel

Additional refinements were made to prioritization coding, and new coding adjusts the background width automatically based on length of text in the event titles.

Line Dragon-Trend

Included as an alternative to the Solid Dragon-Trend, with new compatible colors.

Solid Dragon-Trend

Included as an alternative to the Line Dragon-Trend, for "easier on the eye" charts to help improve focus on PA. Components that make up the Solid Dragon can be set to adjust automatically to the chart zoom setting.

VSA Candlesticks

Places candles on top of the Solid Dragon, highlighting them with colors according to hard coded VSA settings. Candle widths can be set to adjust automatically to the chart zoom setting. The highlighting colors can be turned on/off.

VSA Histogram

Recoded for a more pleasing look, this provides a volume histogram in a chart sub-window, highlighting the bars with colors according to hard coded VSA settings. Histogram bar widths can be set to adjust automatically to the chart zoom setting. The highlighting colors can be turned on/off. Choices of two alerts, sound only and sound w/text, are provided for “Climax” candle events.

Instructions on the Use of the Indicators

User notes are provided in the compile of each indicator, and are quite extensive in some cases. They will answer most questions. And questions not answered probably will be with just a little use of, and experimentation with, the inputs to these indicators. Please read and reflect on the user notes, and experiment with the inputs. Great pains have been taken to provide adequate user notes and instructions. Please don't ask questions already answered in the user notes simply because you have not bothered yourself to take the time to read them.

Once the indicators are installed into MT4 you can access the user notes. In the main MT4 window there is a yellow diamond icon with "i" in it. Click on it to open the MetaEditor, where you will find a list on the right that includes "indicators", where you will find the indicators you want to "open" in order to see the user notes at the top of indicator compile (code). Double click on any such indicator in the list and the code for it will appear in the MetaEditor window. You can scroll down the code to view. You will find user notes near the top.

Summary of Templates

Three starter templates are provided for both black and white charts. Many configurations of the display of Levels, pivots and range lines are possible using the extensive line placement controls in the External Inputs of the SonicR Control Panel. You are encouraged to experiment with these inputs to become familiar with what they do, and what they allow you to do to customize your charts. The starter templates are shown below.

The templates include both the Line Dragon-Trend indicator and the Solid Dragon-Trend indicator. The Line Dragon-Trend indicator is turned off. If you wish to use it rather than the Solid Dragon-Trend indicator, simply turn it on and turn the Solid Dragon-Trend indicator off.

Conclusion

These new indicators include more features, yet setup and use is simplified. The new Solid Dragon will give your charts a cleaner look. The user notes for each indicator have been meticulously written to instruct and to inform, and so to void any necessity to answer questions about the indicators.

Be advised: read the user notes instead of asking questions!

Acknowledgements

I wish to express my sincere appreciation of CaveMan for his generous contribution to TzPivots coding and of Kent (Pips4Life) for his excellent Clock indicator. Were it not for the coding of these two gentlemen our Control Panel would not be half what it is. Thank you, CaveMan. Thank you, Kent.

The latest Sonic R. System Manual (in brief)

The Sonic R. System is a method of trading price movements between areas of support and resistance. It trades on the M15 chart. It uses a price activity WAVE at an S&R area to validate a trade setup, and technical indicators called the DRAGON and the TREND. The DRAGON is used for picking the trade entry. The TREND is used to confirm the correct trade direction. Historic S&R is used for picking the trade exit.

WAVE
L-H-HL starting below Dragon for longs, H-L-LH starting above Dragon for shorts, showing "bounce" or “breakthrough” at S&R. Best if WAVE leg #1 crosses thru the Dragon.

DRAGON
Must be angled up with PA above it for longs, and angled down with PA below it for shorts.

TREND
This is a market bias indicator and it is best if PA is above it for longs and below it for shorts.

TIMING
Prefer not to open trade during asian session. Recommend London session for best momentum. Trade can be closed anytime.

PAIRS
Prefer to trade the pair EUR/USD. Lowest spread. Usually a wide range. Most important is it is most traded pair, which means better volume and better momentum for the trade.

Placement of EP
Wait for a WAVE leg #3 candle to break out of the DRAGON, and place your entry order at least several pips beyond it. It is better if there is no strong S&R area just beyond the entry. Remember also, it is best if PA is above TREND for longs, below TREND for shorts.

Placement of Re-entry
It is best to let PA clear the most recent high, or low, and if there is no strong S&R area just beyond this re-entry.

Placement Of TP
Select a historic S&R level. Such levels can include whole/half/quarter numbers and the middle of consolidation areas.

Placement of SL
These are the rules for placement of the SL (see picture below that illustrates):

1. The SL must be beyond the H/L (for shorts/longs) of the recent large scale price swing.
2. The SL must not be more than 100-120 pips from the EP (for EUR/USD).

Example

Below are an example of a Sonic R. System short setup and trade, and of the rules for placement of the SL. The key elements of the Sonic R. System are clearly labeled and illustrated.

Conclusion
To start with the Sonic R. System, read all of Post #1 and the linked material. Read the first 25-50 of Sonicdeejay's posts. Read at least the last month of all posts. Please do not ask any questions for the first month of studying this system, because as you read, reflect, and read more, all of your questions will become answered thru your own efforts.

The purpose of this thread is to be a "text book" on the Sonic R. System, which learners can read thru and grow. So, the fewer posts that ask/answer the same elementary questions from newcomers, the better for all to have fewer posts to read to progress! The Sonic R. System is elegantly simple. Believe me, any lingering questions you have will be answered as you read the thread and diligently study the trades and other information already posted here.

Download

Download Sonic R. System 2013

noreply@blogger.com (Anonymous) — Sat, 30 Mar 2013 05:17:00 GMT

how to install and load the Sonic template properly

1. Go get Demo MT4 version from any brokers (ODL or IBFX)

2. Download/unzip/Copy/Save the MQ4/EX4 file into your C:Program Files(your broker)>MetaTrader 4>experts>indicators folder

3. Copy and paste the template file .tlp in C:Program Files(your broker>)MetaTrader 4>templates folder.

4. Close your MetaTrader application (assuming it’s currently open … Ignore this if the application hasn’t been launched)

5. Launch...

method of work: HERE

Download

Download NEW Ema+vq+macd System

noreply@blogger.com (Anonymous) — Sat, 30 Mar 2013 03:15:00 GMT

Method of work: HERE

Download

Fibo zones - the relation between today & yesterday OHLC

noreply@blogger.com (Anonymous) — Sat, 30 Mar 2013 01:48:00 GMT

Hi everybody,

I'm starting this new trade because some months ago I've found a great piece of tool in another thread in this forum (high probability Fibonacci zones).

As I'm sure of the basic meaning of OHLC ratios in trading, that tool was just the cherry over the cake.

Indeed it is an application of Joe Jackson's method that is proven to be very effective; it is an excel calculator that is supposed to indicate the most probable direction that price will follow in the daily session and the levels at which you can expect the price to bounce back, and i can assure that it does its work very well with unexpected precision.

I'm using it for my real money trading since 3 months with very good results, but there are some features I still am struggling with to understand and unfortunately the thread where I found it is closed since 2010.

So the purpose of this thread is to find someone that knows this calculator in its whole details to explain them and , to improve the knowledge about it and the concept it is based on for all the people that have an interest in.

Of course the tool is attached for everybody.

Thks to all.

FiboHenryZone Calculator Sign.xls