Trik trading forex and successful robot forex trading

Trik trading forex and successful robot forex trading 

The popularity of forex automatic trading robots keeps increasing, in spite of the dubious returns generated by using them. If you’re interested in trading currencies, there’s more than a slight chance that at some point in your trading career you’ve considered buying one of the software advertised online as the greatest revolution in trading, the best robot that awes the pros and experts with its successes. There’s little merit to these ostentatious claims, but if you are intrigued by them, here are some things you must know before using or buying any of the forex automatic trading robots.

Forex Automatic Trading Robots

Forex Automatic Trading Robots

Forex robots are automated systems that enter trade orders in the place of a human trader. They are programmed to generate returns by the application of mathematical rules which are decided by their creators. In other words, the intelligence and skill of a forex robot is entirely dependant on its creator. The forex robots run the pre-programmed routine under all circumstances; they don’t change, revise, or adapt it to changing conditions in the market, but will attempt to cut losses based on the instructions provided to by the programmer.

The commands executed by the robot are based on the tools of technical analysis, but sophisticated programmers will also use back testing to optimize the results of their robots. This process can be automated itself, and involves tweaking of the program to ameliorate its performance with respect to maximum drawdown, the placing of stop-loss orders, and other aspects of money management.

What the programmers of these robots won’t tell you.

There are important problems with the logic behind the creation of the forex automatic trading robots, and the actual results generated by them. The first and obvious issue is the fact that the robots have never been tested in actual market conditions. In almost all cases, they are tested on historic data, and non-trade related problems, such as connectivity issues, or problems that originate from the broker which would not be reflected on market data, are ignored. For example, even the best robot will be useless if during some inevitable technical problem originating at your local ISP a brief blackout wipes out your account. Similarly, if, for whatever reason, spreads of your own broker widen to levels much greater than that prevailing in the vast majority of the market, even the best automated system will be useless. Only good money management methods, through the use of proper stop-loss orders, and preparation and willingness to admit and recognize losses can ensure survival against such periods.

The second issue is born of the fact that by using a forex automatic trading robot, you’re basically handing over the control of your finances to a machine that has no brain. It is programmed to run according to a set of rules at all times, and has no ability to adapt itself to changing circumstances, regardless of the severity and importance of the changes in question. This is perhaps the most important disadvantage of using a robot in the forex market where change is the only constant.

 trik trading forex and successfull robot forex trading

Finally, and in relation to the above, we should remember that the robots are only as smart as their creators. Do you really believe that the peddler selling you the robot is a market-busting genius at the level of a Warren Buffet, or George Soros, who, after all, have had their own fair share of disastrous trades over the years? If you don’t think that the peddler is that smart, then why do you expect rules written by him to beat the markets in a way that even the best traders with proven records have never been able to do?

Conclusion: What to seek in a forex robot?

We do not advise that you purchase any forex robot, since trading by using them, without understanding and knowing what you’re doing goes against all the basic principles of a successful trading career. The only kind of forex robot useful for you would be one which you could use to automate your own trading strategy, or one that you understand and are confident about, having examined the inner mechanism, and design of it. When you buy a forex automatic trading robot, you know close to nothing about why and how it performs, since even their creators don’t know why the particular combination on the basis of which the robot is operating is supposed to be creating good returns in the markets.

On the other hand, if you create your technical scheme and want to automate it, there’s nothing wrong with purchasing a forex API pack from a forex broker or API developer and using it for that purpose. But many of us lack the confidence and the experience necessary for creating and customizing these tools ourselves, which is why the robots are so popular on the market these days, advertised by extravagant claims, and hyperbole.
In short, the forex automatic trading robot is an alluring, great idea that promises a lot, but delivers little due to the random nature of price action in the financial markets. If in spite of all the information in this article you still have confidence that some of the robots out there deliver the incredible returns promised by their creators, consider the obvious. If the owners of these systems have achieved the Holy Grail of trading, why would they peddle it to you online for meager sums? They would not even need to advertise them, as financial institutions all over the world would compete with each other to acquire these products from them. Instead, large firms and broker ignore the robots and creators. Why won’t you do the same?

Searches related to Forex Money Market Hedging money market hedge calculation

Searches related to Forex Money Market Hedging  money market hedge calculation

Money Market Hedge is a hedgingtechnique for Forex risk that uses the money market, where short term and highly liquid financial instruments (bankers’ acceptance, treasury bills, commercial paper, etc.) are traded.

Successful Forex Hedge Strategy that Makes Money

Since there are various forexhedging techniques, including futures, forwards, and options, it wouldn’t be a cost effective idea to use money market hedge. However, it can be a useful technique for small businesses or retail investors who want to hedge their currency risk that is not large enough to justify going for a forward or futures contract. In order to understand how money market hedge works, it is important to have an idea of what forward exchange rates are.

Forward Exchange Rates

It is basically a spot exchangerate that is adjusted for differentials in the interest rate. According to a Covered Interest Rate Parity, forward exchange rates should account for the difference in rates of interest between the underlying countries of the currency pair, or else there will be a likelihood of an arbitrage opportunity. For example, let’s suppose U.S. banks offer 1.5 percent annual rate of interest on USD, whereas, Canadian banks offer 2.5 percent on CAD deposits. Although, it would be enticing for the U.S. investors to convert their funds into CAD and place the money in CAD deposits due to high deposit rates, yet, they have to face a certain level of currency risk.

If, however, they want to hedge the risk with a forward contract by purchasing US dollars one year forward, interest rate parity clearly state that the cost associated with such hedging would equal 1 percent difference in rates between the Canada and the United States. For example, if the spot rate of 1 USD is equal to 1.10 CAD, then on the basis of covered interest rate parity, 1 USD placed on deposit at the interest rate of 1.5 percent must be equal to 1.10 CAD at an interest rate of 2.5 percent after a year.

1 USD (1 + 1.5%) = 1.10 CAD (1 + 2.5%)

Or you can also say that

1.015 USD = 1.1275 CAD

Therefore, 1 year forward rate will be

1 USD = 1.1275 CAD/1.015 = 1.110837 CAD

Currency with the lower rate of interest always trades at a forward premium. In the above example, USD being the lower interest rate currency was trading at a forward premium to the Canadian dollar, meaning the U.S. dollar gets more Canadian dollars in one year’s time, i.e., 1.110837, compared with the spot rate of 1.10.

Money Market Hedge

This hedging is somewhat similar tothe forward hedging technique, with a few changes. It is used to hedge transaction exposure. If the foreign currency receivable is expected to be received after a certain period of time and currency risk is hedged will be hedged through the money market, it would give rise to the steps given below.

1. Borrow the foreign currency in the amount that is equal to the present value of the receivables, because the foreign currency loan and the amount of interest on it should be the same as the amount of the receivable.
2. Convert the foreign currency in domestic currency at a spot rate.
3. Deposit the domestic currency at a current rate of interest.
4. When the receivable is received, repay the loan along with the interest (as calculated in step 1)

In the same way, if a payment in foreign currency has to be made after a certain period, money market hedge can be used as follows:

1. Borrow the domestic currency that is equal to the present value of the payment.
2. Convert the domestic currency into foreign currency at a spot rate.
3. Deposit the foreign currency amount.
4. Pay the amount once the foreign currency deposit matures.

Money market hedge can be used in cases where the forward contracts are not instantly available. It is also suitable for smaller amounts when someone is looking for a currency hedge, but is reluctant to utilize options or futures.
https://fbs.com/?ppk=mbatikfx - Looking for a good Forex hedging strategy that works? If so, then this strategy is very effective and highly profitable. This video shows that with one pair one can make more than 1400 pips over 2 months with simple set and target trading methods. Works best on h4 time frame however can be adjusted to suit others.  To work effectively one must add the daily support and resistance zones as potential trading areas.  For more on this trading style and method - https://fbs.com/?ppk=mbatikfx using-a-...  Please Note - This video is for demonstration purposes, major support and resistance do move slightly over time, however as an example 1.26, 1.28, 1.30, 1.32, 1.34 and 1.36 are all major structure points that have been valid on EURUSD for over 2 years now.. Before trading with real money I highly recommend testing on a demo account first.. Good luck..  Disclaimer - If you decide to trade live, trade at your own risk and do not trade with money you cannot afford to lose..

The Best Technical Signals for Commodities Investing The basic purpose of every investor

The Best Technical Signals for Commodities Investing The basic purpose of every investor

The basic purpose of everyinvestor, speculator and trader is to maximize his profits and minimize the potential loss. This is a common practice followed by industry leaders. Mainly two important techniques including technical analysis and fundamental analysis are used for making sell, buy or hold decisions. If you are planning for a long term investment, then the fundamental analysis technique is said to be the perfect choice. The reason behind this preference is its quality of being research based. The technique studies economic policies, financial decision making and demand supply scenarios.

The Best Technical Signals

On the other side, the technique of technical analysis is normally employed by traders, as it is suitable for short-term decision making in the markets. This usually helps traders in making quick buy or sell decisions in a timely manner. This technique is actually pictorial; it examines the precious price patterns, market trends and volume to build charts in order to decide future movements. This technique is not just bound to any particular class of asset, but can be utilized for trading all classes of assets ranging from commodities to stocks. Here we will talk regarding commodities, which involve goods like copper, cocoa, corn, coffee, crude oil, gold, live cattle, natural gas, heating oil, feeder cattle, soybeans, rough rice, sugar, silver, pork bellies, orange juice platinum, oats, lumber, etc.

Market Identification

The most famous signals for commodity trading can be categorized as momentum indicators, which follow the reliable saying of all traders, “buy low, sell high.” Such momentum indicators are further divided into trend following and oscillator indicators. However, traders are required to first recognize the market, for example whether the marketplace is trending or simply following indications don’t do well in a ranging market; likewise, oscillators are likely to be deceptive in a trending market. The Best Technical Signals for Commodities Investing The basic purpose of every investor

So let’s see some of these indicators which are thought to be great for commodity trading.

Moving Averages

Moving average or MA is one of the easiest and most broadly used indicators in the technical analysis, this is the average price of a commodity or stock over a specific period. For instance, a five period moving average will be the average of closing prices over the past 5 days, counting the current period. The calculation is based upon the present price data in place of closing price when this indicator is utilized intra-day. The moving average is likely to smoothen out the arbitrary price changes to bring out the hidden trends. This is basically a lagging indicator and is employed to see price patterns. A purchase signal is generated when price intersects above the moving average from below while when price drop below this from above is revealing the bearish sentiments so a sell indicator. The moving average is soft and less sensitive in case of a longer period. The cross over by a short term MA above a long-term moving average is suggestive of an upswing.

There are several versions of moving average which are more elaborative like exponential MA or EMA, linear weighted MA, volume adjusted MA, etc. Moving average is not appropriate for ranging market, as it is likely to create bogus signals because of prices moving backward and forward. You must remember that the slope of the moving average mirrors direction of the trend. The sharper the moving average, move is the force backing the trend, while a levelling moving average works like a warning signal as there could be a trend setback due to lessening in the momentum.

MA Convergence Divergence or MACD

The moving average convergence and divergence is commonly known by its famous acronym MACD. It is very commonly utilized indicator, developed by a genius Gerald Appel. It is a kind of trend following momentum signal that employs MA or EMA (exponential moving averages) for calculations. Naturally, the MACD or moving average convergence divergence is calculated as a twelve day exponential moving average minus twenty six day EMA. The nine day exponential of the MACD is known as the signal line and assists in identifying turns.

A bullish indicator is created when the moving average convergence and divergence is necessarily a positive value as the smaller period exponential moving average is stronger or higher than the longer period EMA. It clearly means growth in upside momentum, but it displays loss in momentum as the value begins to decline. Likewise, a bearish situation is indicated by a negative MACD value and if this is likely to rise more then it suggests an increase in downside momentum. Furthermore if a negative MACD value declines, it indicates that the down-trend has started to lose its momentum.

Relative Strength Index or RSI

The RSI or Relative Strength Index is an easy to use and very popular technical momentum indicator. It tries to find out the oversold and overbought level in the market on 0 to 100 scale, therefore signifying if the market has bottomed or topped. As per this indicator, markets are thought to be overbought oversold below 30 and overbought above 70. Nevertheless, traders employ their abandonment regarding setting their desired parameters. The utilization of a fourteen day Relative Strength Index was suggested by Welles Wilder but with the passage of time, 25 day RSI (intermediate cycle) and 9 day RSI (short cycle trade) and have got popularity.

The prevalent ways to utilize RSI is to find divergence and the failure swings in addition to oversold and overbought indicators. It is worth knowing that the divergence happens in a scenario where the asset is creating a new high while Relative Strength Index fails to shift its former high, this indicates an imminent reversal. Moreover, if the Relative Strength Index comes down to below its former low, a confirmation to the imminent reversal is provided by failure swing.

In order to get more reliable results, be conscious of a ranging market or trending market since RSI divergence isn’t respectable enough indicator in a situation of a trending market. Relative Strength Index is very productive particularly when employed complementary to all other indicators.

Stochastic

The Stochastic indicator was based on the thought that if the price has been observing an uptrend in the day then closing price is likely to settle down near the upper-end of the current price range while if the price has been descending, then closing price is likely to become closer to the lower-end of the price range. This signal measures the connection among the asset’s closing price and its exact price range over a certain period of time. You may not know that the stochastic oscillator has 2 lines. The 1^st one is the %K, comparing the closing price and the latest price range. The 2^nd one is known as %D which is a flatten form of the first %K value and is thought to be more significant among the two.

The key signal that is made by this particular oscillator is actually when the %K line intersects the %D line. Bullish indicator is made when %K line breaks through %D line in a vertical direction. On the contrary side, a bearish indicator is made when %K line falls through the %D line in a downward way. Furthermore, divergence assists in recognizing the reversals. The contour of the stochastic top and bottom works as a good signal. For instance, a broad and deep bottom signifies that the bears are solid and any rally at this point can be weak and small lived.

Bollinger Bands

Developed in the 1980s by Sir John Bollinger, it is a wonderful indicator to measure oversold and overbought conditions in the marketplace. The Bollinger Bands are basically a set of 3 lines; an upper line (resistance), center line (trend) and lower line (support). The bands begin to expand when the price of a commodity is assumed as volatile. Contraction happens when the prices get range bound.

Bollinger Bands are very useful for traders to notice the turning point in range bound markets. It means to buy when the prices drop and touches the lower band and sell when prices rise to hit the upper band. Nevertheless, the signals begin to give false indicators as the market enters trending, especially if the prices move away from that range where it was trading. They are also considered to be apt for short frequency trend following.

Ending Remarks

There is no dearth of the technical indicators that are conveniently available to traders, however, picking up the right signals is very important. You should make sure the suitability of indicators to market conditions. The oscillators are good in ranging market while trend following indicators are appropriate for trending markets. Applying these in opposite way can be very misleading and false indicators can result in heavy losses. If you are a newbie to technical analysis, begin your journey with easy to apply indicators. best broker register here.

how to trade forex with $ 100 to produce $ 150 more per day

how to trade forex with $ 100 to produce $ 150 more per day

I know that most of you are coming into the Forex markets with relatively small trading accounts. I also know that you want to grow your trading accounts while losing as little money as possible.

how to start forex trading without investment

While this is not an easy goal to achieve, it can be done if you are willing to be disciplined and change the way you think about trading the markets. In today’s Forex trading lesson, I am going to share with you my honest and practical insight on how to successfully trade with a small trading account. So, if you’ve been lying awake at night, unable to sleep because you just can’t seem to make any consistent progress on your small trading account, this article is for you.
Before we dive into the details of today’s lesson, it’s worth noting that you are not experiencing difficulty in your trading because you have a small trading account. To be honest with you, the size of your trading account has no bearing on whether or not you are a successful Forex trader. A successful Forex trader is not necessarily a full-time professional trader, this is a myth you need to forget about right now.

You need to view success in the markets as a function of what is possible given the size of your trading account. So, if you have a $2,000 trading account and you are consistently making $200 a month, you should consider yourself a successful Forex trader, even though you obviously cannot live on $200 a month, more on this later.

Some people come into the markets with a $50,000 or $100,000 account and lose all their money in a short period of time. While other traders start with $1,000 and parlay that small amount into a substantial trading account over time. The determining factor of success lies not in the size of the trader’s account but in their beliefs about what successful trading consists of and what they need to do to achieve it.

Focus on trading the markets, not on making the money

It is not a profound statement to say that making money in the markets is a result of successfully trading them, but it’s worth examining this statement further to see just where most traders with small accounts go wrong.

The problem that plagues most traders with small accounts is that they are probably coming into the markets feeling a “need” to make money because they have put all the disposable income they have into their trading account and they really want to quit their jobs / get rich quick / buy a yacht, etc. The point is that trading the markets with a feeling of “need” results in you focusing most of your brain power on money and profits and much less of it on managing risk and mastering an effective Forex trading strategy like price action trading.


A trader needs to be good at trading a small account before they can move on to a larger account. I would even say that even if you do have a large sum of money to trade with, you should not fund your account with all of it until you have proved to yourself that you can make money on a smaller sum of money. Your focus should not be on turning a small account into lots and lots of money extremely quickly, this is simply not possible if you are managing your risk properly.
Instead, your focus should be on becoming a good trader, not on making money super fast. If you learn to trade the market successfully, the money will follow and attract itself to you in increasing amounts as time goes on. You truly need to focus on the trading not on the money if you want to have a chance at keeping your emotions at bay and obtaining consistent trading success as a result.

I can’t even tell you how many emails I get each week from people asking me questions like ‘Nial, how much money do I need in my account to make $1,000 a month’, or any number of other similar questions that just totally miss the point of what successful trading is all about. I am not criticizing anyone for asking such questions, as most beginners simply do not know what it takes to succeed in the markets and have probably been fed lies and rumors by other Forex websites that promise them the world but deliver little in the way of practical trading strategies and insight.
But, traders need to understand that in order to make consistent money in the markets they must first master a trading strategy like price action, build a trading plan around it, manage risk effectively and with discipline, and not stray from these primary tenants of successful trading, if you can do these things you will see your trading account will grow slow but consistently. If you don’t do these things you will be another member of the large pool of losing Forex traders who refuse to stop thinking about getting rich overnight.

Treat a small trading account as if it were 1 million dollars
If you had a 1 million dollar trading account and had one or two big winners per month, you would be making substantial money, and you would have an impressively consistent track record.
You need to think about your current trading account as if it is a 1 million dollar account, because the principles that lead to consistently successful trading are the same. You are only feeling the emotion and urgency to trade now because your account is small and you want to make a lot of money really fast. But, unfortunately the path to make money in the markets is not paved by risking a lot and trading too much, but rather by taking a slow and calculated approach to your trading and never becoming emotional.

If you had a 1 million trading account, you would have no problem waiting for a pin bar strategy or fakey setup that sticks out like sore thumb on the charts, because you know you only need a few good trades a month to make your money. Granted, it’s easier to not care about the money when you have 1 million dollars, but the point of this article is that in order to make money on your small trading account you need to THINK like you have a big trading account now, because this will deliver you from feeling the urgency and “need” to trade that you probably feel now which is causing you to over-trade, over-leverage, and lose money consistently.

The very reason why most traders lose money is because they simply cannot see the forest for the trees, meaning they get caught up in the temptation to trade every day and over-leverage their accounts because they forget about or are unaware of the bigger picture of trading, which is that slow and steady wins the race, not fast and haphazard. Many traders also get caught up in trying to analyze every piece of news data and all the forex indicators they can get their hands on. Adding such unnecessary variables to your trading analysis only works to keep you deeper in the realm of emotional trading and further away from understanding the bigger picture of what Forex trading success is all about.

A consistent track record can take you places

If your trading account is somewhere in the range of $2,000 or less, we are going to consider this a “very small” trading account and this means your focus absolutely has to be on building a consistent track record and building your confidence as a trader. Then, as you grow and progress as a trader and your track record becomes consistently profitable each month, you can proceed to trade larger sums of money. If you do not have access to more money you can look to an investor, friend, bank or prop firm for trading funds, I even fund some of my successful students from time to time if they have proven themselves to me.
So, if you have a small trading account right now, your primary goals to trade it successfully are to do the following things:

• • Forget about the money and instead become “engrossed” in mastering an effective yet simple trading strategy like price action. The more focus you put into the process of trading instead of making money and getting rich, the sooner the money that you desire will find its way into your trading account.
• • Build a trading plan off of the price action trading strategies you have mastered. A forex trading plan is essential for succeeding long-term in the markets because it gives you an objective daily guide to follow and will lay out all your entry, exit, and money management strategies, so that you are not just trading on a whim every time you open up your charts.
• • Once you build your trading plan you are going to need to track your progress in a forex trading journal so that you can stay disciplined and accountable. If you don’t maintain a trading journal you are probably going to lose your discipline and focus because you will not have a tangible piece of evidence that reflects all your trades.

If you are looking for a backer to fund your trading, they are going to want to see hard evidence that you can trade consistently. This evidence will need to at least contain a legitimate track record that reflects your account history and a comprehensive yet concise Forex trading plan that matches the trades you’ve executed in your trading account history. They are not going to care that much about how much money you have in your account, if you are trading a real-money account and you can provide documents that show your discipline and consistency over a period of 3 months or more, you will not have trouble finding investors or institutions to fund you. So, if nothing else, let this be the motivating force that you need to stop trading haphazardly and get disciplined.

Managing your money on a small trading account

Finally, a few words on managing your money in a small account: it’s no different from how you would manage your money on a larger account, except that you will obviously be trading smaller position sizes per trade. Whatever you do, do not get greedy and trade too large or over-leverage on a smaller account, this is a common emotional trading mistake and it will kill your trading account faster than you think and greatly inhibit your chances of becoming a successful trader.
If you will just slow down and focus on trading like a sniper and not a machine gunner by learning to trade only the most obvious and confluent price action setups, you will be able to trade much more relaxed and care-free, this will help you greatly in your money management. I will not go into my personal Forex money management theory to deeply right now, because I have written about it in other articles, one of which I suggest you read when you finish this one: Don’t measure your profits in percentages or pips. But, basically, you should never risk more money per trade than you are TRULY OK with losing, because you COULD lose on ANY trade, let the be your guiding principle before you enter any trade, because if you really accept this statement you will not ever risk more than you are comfortable with losing.

What to do now

If you are serious about trading your small account successfully and having a chance to take your trading to the next level, you will need to use the insight I have provided in this trading lesson and really try to make a shift in the way you think about trading. I cannot force you to manage your money correctly, master price action trading, or remain disciplined over a long period of time, but if you are truly serious about having a career in trading, you will have to dig deep within yourself and muster up the motivation to do these things and forge the proper trading habits. You can succeed at anything if you want it enough, and Forex trading is no different, so right now you should ask yourself “How much do I want to be a successful Forex trader” and then go back and re-read this article and begin implementing the points discussed here immediately.

How to Trade Forex , Trading foreign exchange on the currency market

How to Trade Forex , Trading foreign exchange on the currency market

Trading foreign exchange on the currency market, also called trading forex, can be a thrilling hobby and a great source of income. To put it into perspective, the securities market trades about $22.4 billion per day; the forex market trades about $5 trillion per day. You can trade forex online in multiple ways.

1. Learning Forex Trading Basics

 

Learning Forex Trading Basics

Understand basic forex terminology.

• The type of currency you are spending, or getting rid of, is the base currency. The currency that you are purchasing is called quote currency. In forex trading, you sell one currency to purchase another.
• The exchange rate tells you how much you have to spend in quote currency to purchase base currency.
• A long position means that you want to buy the base currency and sell the quote currency. In our example above, you would want to sell U.S. dollars to purchase British pounds.
• A short position means that you want to buy quote currency and sell base currency. In other words, you would sell British pounds and purchase U.S. dollars.
• The bid price is the price at which your broker is willing to buy base currency in exchange for quote currency. The bid is the best price at which you are willing to sell your quote currency on the market.
• The ask price, or the offer price, is the price at which your broker will sell base currency in exchange for quote currency. The ask price is the best available price at which you are willing to buy from the market.
• A spread is the difference between the bid price and the ask price. ^[1]

 

2. Read a forex quote. You'll see two numbers on a forex quote: the bid price on the left and the ask price on the right.

You'll see two numbers on a forex quote

a

3. Decide what currency you want to buy and sell.

• Make predictions about the economy. If you believe that the U.S. economy will continue to weaken, which is bad for the U.S. dollar, then you probably want to sell dollars in exchange for a currency from a country where the economy is strong.
• Look at a country's trading position. If a country has many goods that are in demand, then the country will likely export many goods to make money. This trading advantage will boost the country's economy, thus boosting the value of its currency.
• Consider politics. If a country is having an election, then the country's currency will appreciate if the winner of the election has a fiscally responsible agenda. Also, if the government of a country loosens regulations for economic growth, the currency is likely to increase in value.
• Read economic reports. Reports on a country's GDP, for instance, or reports about other economic factors like employment and inflation, will have an effect on the value of the country's currency. ^[2]  

4. Learn how to calculate profits.

• A pip measures the change in value between two currencies. Usually, one pip equals 0.0001 of a change in value. For example, if your EUR/USD trade moves from 1.546 to 1.547, your currency value has increased by ten pips.
• Multiply the number of pips that your account has changed by the exchange rate. This calculation will tell you how much your account has increased or decreased in value. ^[3]

Opening an Online Forex Brokerage Account

1. 
   

   

   Opening an Online Forex Brokerage Account

   2. Research different brokerages. Take these factors into consideration when choosing your brokerage:
   

   • Look for someone who has been in the industry for ten years or more. Experience indicates that the company knows what it's doing and knows how to take care of clients.
   • Check to see that the brokerage is regulated by a major oversight body. If your broker voluntarily submits to government oversight, then you can feel reassured about your broker's honesty and transparency. Some oversight bodies include:
     • United States: National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
     • United Kingdom: Financial Conduct Authority (FCA)
     • Australia: Australian Securities and Investment Commission (ASIC)
     • Switzerland: Swiss Federal Banking Commission (SFBC)
     • Germany: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)
     • France: Autorité des Marchés Financiers (AMF)
   • See how many products the broker offers. If the broker also trades securities and commodities, for instance, then you know that the broker has a bigger client base and a wider business reach.
   • Read reviews but be careful. Sometimes unscrupulous brokers will go into review sites and write reviews to boost their own reputations. Reviews can give you a flavor for a broker, but you should always take them with a grain of salt.
   • Visit the broker's website. It should look professional, and links should be active. If the website says something like "Coming Soon!" or otherwise looks unprofessional, then steer clear of that broker.
   • Check on transaction costs for each trade. You should also check to see how much your bank will charge to wire money into your forex account.
   • Focus on the essentials. You need good customer support, easy transactions and transparency. You should also gravitate toward brokers who have a good reputation. ^[4]

   3. Fill out the appropriate paperwork. You can ask for the paperwork by mail or download it, usually in the form of a PDF file. Make sure to check the costs of transferring cash from your bank account into your brokerage account. The fees will cut into your profits.  

   

   active account

   
   

4. Activate your account. Usually the broker will send you an email containing a link to activate your account. Click the link and follow the instructions to get started with trading. [5]

5. Starting Trading

Starting Trading

6. Analyze the market. You can try several different methods:

• Technical analysis: Technical analysis involves reviewing charts or historical data to predict how the currency will move based on past events. You can usually obtain charts from your broker or use a popular platform like Metatrader 4.
• Fundamental analysis: This type of analysis involves looking at a country's economic fundamentals and using this information to influence your trading decisions.
• Sentiment analysis: This kind of analysis is largely subjective. Essentially you try to analyze the mood of the market to figure out if it's "bearish" or "bullish." While you can't always put your finger on market sentiment, you can often make a good guess that can influence your trades. ^[6]

7. Determine your margin. Depending on your broker's policies, you can invest a little bit of money but still make big trades.

• For example, if you want to trade 100,000 units at a margin of one percent, your broker will require you to put $1,000 cash in an account as security.
• Your gains and losses will either add to the account or deduct from its value. For this reason, a good general rule is to invest only two percent of your cash in a particular currency pair.

8. Place your order. You can place different kinds of orders:

• Market orders: With a market order, you instruct your broker to execute your buy/sell at the current market rate.
• Limit orders: These orders instruct your broker to execute a trade at a specific price. For instance, you can buy currency when it reaches a certain price or sell currency if it lowers to a particular price.
• Stop orders: A stop order is a choice to buy currency above the current market price (in anticipation that its value will increase) or to sell currency below the current market price to cut your losses. ^[7]

9. Watch your profit and loss. Above all, don't get emotional. The forex market is volatile, and you will see a lot of ups and downs. What matters is to continue doing your research and sticking with your strategy. Eventually you will see profits.

 

How to build your own algorithmic trading business Building a Fully Automated Trading System

How to build your own algorithmic trading business Building a Fully Automated Trading System 

For the last 6 months I have been focused on the process of building the full technology stack of an automated trading system. I have come across many challenges and learnt a great deal about the two different methods of backtesting  (Vectorised and Event driven). In my journey to building an event driven backtester, it came to my surprise that what you would end up with is close to the full technology stack needed to build a strategy, backtest it, and run live execution.

My biggest problem when tackling the problem was a lack of knowledge. I looked in many places for an introduction to building the technology or a blog that would guide me. I did find a few resources that I am going to share with you today.

For Beginners:

For the readers new to quantitative trading I would recommend Ernie P. Chan’s book titled: Quantitative Trading: How to build your own algorithmic trading business. This book is the basics. It’s actually the first book I read on quantitative trading and even then I found it very basic but there are some notes you should take.
From page 81-84 Ernie writes about how at the retail level a system architecture can be split up into semi-automated and fully automated strategies.
A semi-automated system is suitable if you want to place a few trades a week. Ernie recommends using Matlab, R, or even Excel. I have used all 3 platforms and this is my advice:

1. Skip Matlab, it cost a lot of money and I could only get access to it at the university laboratories. There isn’t a lot of training material like blogs or books that will teach you how to code a strategy using Matlab.
2. R has tons of resources that you can make use of in order to learn how to build a strategy. My favorite blog covering the topic is: QuantStratTradeR  run by Ilya Kipnis.
3. Microsoft Excel is most likely where you will start if you don’t have programming experience. You can use Excel for semi-automated trading but it’s not going to do the trick when it comes to building the full technology stack.

Semi-automatic framework pg 81

Completely automated trading systems are for when you want to automatically place trades based on a live data feed. I coded mine in C#, QuantConnect also uses C#, QuantStart walks the reader through building it in Python, Quantopian uses Python,  HFT will most likely use C++. Java is also popular.

Completely automated trading framework pg 84

Step 1: Getting a head start

Do the Executive Program in Algorithmic Trading offered by QuantInsti.com. I just started the course and the very first set of lectures was on system architecture. It would have saved me about 3 months of research if I had started here. The lectures walked me through each component that I would need as well as detailed description of what each component needs to do. Below is a screen shot of one of their slides used in the presentation:

You can also use this general framework when evaluating other automatic trading systems.

At the time of writing I am only in the third week of lectures but I am confident that a practitioner will be able to build a fully automated trading strategy that could, with a bit of polish, be turned into the beginnings of a quantitative hedge fund.
Note: the course is not focused on building the technology stack.

Step 2: Code a basic event driven backtester

Michael Hallsmore’s blog quantstart.com & book “Successful Algorithmic Trading”
This book has sections dedicated to building a robust event driven backtester. He walks the reader through a number of chapters that will explain his choice of language, the different types of backtesting, the importance of event driven backtesting, and how to code the backtester.
Michael introduces the reader to the different classes needed in an object orientated design. He also teaches the reader to building a securities master database. It is here that you will see how the system architecture from QuantInsti fits in.
Note: You will need to purchase his book: “Successful Algorithmic Trading”, his blog leaves out too much information.

Step 3: Turn to TuringFinance.com

After completing:

1. The EPAT program
2. Reading “Successful Algorithmic Trading” & coding a backtester in a different language of your choice.

You should move onto a blog called TuringFinance.com and read the article titled “Algorithmic Trading System Architecture” By: Stuart Gordon Reid.   In his post he describes the architecture following the guidelines of the ISO/IEC/IEEE 42010 systems and software engineering architecture description standard.
I found this post very technical and it has some great ideas that you should incorporate into your own architecture.

A screen shot from his post

Step 4: Study open source trading systems.

4.1) Quantopian

It goes without saying that Quantopian should be added to this list and I am embarrassed to say that I haven’t spent a lot of time using their platform (due to my choice of language). Quantopian has many perks but the ones that stick out most to me are the following:

1. Easy to learn Python
2. Free access to many datasets
3. A huge community and competitions
4. I love how they host QuantCon!

Quantopian is the market leaders in this field and is loved by quants all over!  Their open source project is under the code name Zipline and this is a little bit about it:
“Zipline is our open-sourced engine that powers the backtester in the IDE. You can see the code repository in Github and contribute pull requests to the project. There is a Google group available for seeking help and facilitating discussions.”
Here is a link to their documentation:

4.2) QuantConnect

For those of you unfamiliar with QuantConnect, they provide a full open source algorithmic trading engine. Here is a link 
You should have a look at their code, study it, & give them praise. They are Quantopians competition.
I would like to take this opportunity to thank the QuantConnect team for letting me pick their brain and for the brilliant service they provide.
Here is a link to their documentation:

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Concluding remarks:

I hope this guide helps the members of the community. I wish I had this insight 6 months ago when I started coding our system.

how to create a forex trading system and Goals of your mechanical trading system

how to create a forex trading system and Goals of your mechanical trading system

So far, we’ve taught you how to develop your trading plan. We’ve also discussed how important it is for you to discover which type of forex trader you are.
Next, we’re gonna teach you how to add some meat to your thin trading plan frame by showing you how to create a forex trading system.

how to create a forex trading system and Goals of your mechanical trading system

More specifically, we’re gonna teach you all about forex mechanical trading systems.
Mechanical trading systems are systems that generates trade signals for a trader to take. They are called mechanical because a trader will take the trade regardless of what is happening in the markets.

In theory, this should eliminate all biases and emotions in your trading, because you are supposed to follow the rules of your system NO MATTER WHAT.
If you do a simple search in Google for “forex trading systems” you’ll find many many many people out there who claim to have the “Holy Grail” system that you can purchase for “only” a few thousand dollars.

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These systems supposedly make thousands of pips a week and never lose. They will show you supposed “results” of their perfect systems and it will make your eyeballs turn into dollar signs as you sit there and say to yourself, “Wow I can make all this money if I just give this guy $3,000. Besides, if his system making thousands of pips a week, I’ll be able to make my money back in no time.”
Slowww down cowboy. There are some things you should know before you give them your credit card number and make that impulse buy.

The truth is that many of these systems DO in fact work. The problem is that forex traders lack the discipline to follow the rules that go along with the system.

The second truth (Is there such thing as a second truth?) is that instead of paying thousands of dollars on a system, you can actually spend your time developing your own mechanical trading system for free, and use that money you were going to spend as capital for your forex trading account.

The third truth is that creating mechanical trading systems isn’t that difficult. What is difficult is following the rules that you set when you do develop your system.
There are many articles that sell systems, but we haven’t seen any that teach you how to create your own system.

This lesson will guide you through the steps you need to take to develop a forex mechanical trading system that is right for you. At the end of the lesson, we will give you an example of a system that one of the FX-Men uses just so we can show you how awesome we are! (Insert evil laugh here.)

Goals of your mechanical trading system

• We know you’re saying, “DUH, the goal of my trading system is to make a billion dollars!”
• While that is a wonderful goal, it’s not exactly the kind of goal that will make you a successful forex trader.
• When developing your mechanical trading system, you want to achieve two very important goals:

1. Your system should be able to identify trends as early as possible.
2. Your system should be able to avoid you from whipsaws.

If you can accomplish those two goals with your trading system, you have a much better chance of being successful.

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The hard part about those goals is that they contradict each other.
If you have a system who’s primary goals is to catch trends early, then you will probably get faked out many times.

On the other hand, if you have a mechanical trading system that focuses on avoiding whipsaws, then you will be late on many trades and will also probably miss out on a lot of trades.
Your task, when developing your mechanical trading system, is to find a compromise between the two goals. Find a way to identify trends early, but also find ways that will help you distinguish the fake signals from the real ones.

If you have no idea where to start, drop by our Free Forex Trading Systems thread in our forums. Tons of forex traders post their ideas for trading systems, so you may find one or two that you can use when you build your own mechanical trading system.

how to start a Forex trading business online as a beginner - Starting a Forex Trading Business Online and Make Money

how to start a Forex trading business online as a beginner

Do you want to learn how to start a Forex trading business online as a beginner? If YES, here is an in-depth guide on how to make money online with forex trading for beginners.

Though very risky especially for the less experienced, trading foreign exchange on the currency market (also called Forex trading) can be an interesting activity as well as great source of investment income. Currencies worth $5 trillion dollars are traded in the forex market per day. So, you can make a lot of money from the forex trading business without investing too much.

how to start a Forex trading business online as a beginner

If you are been looking to start a profitable business that you can run from the comfort of your home, then you should consider forex trading. One of the good sides of the business is that there are no formal requirements required to start trading forex.

Forex trading simply involves trading in currency. You buy a certain currency when its price drops and you quickly sell it once the price goes up. So, your aim is to make as much profit as possible from the fluctuations in the prices of currencies. Though the principle by which money is made is the same in forex trading, stock trading and commodities trading; both trading methods differ in the following major. Starting a Forex Trading Business Online and Make Money

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the best success of forex trading - The Holy Grail Of Forex Trading Strategies’ – Daily Chart Time frames

the best success of forex trading - The Holy Grail Of Forex Trading Strategies

 – Daily Chart Time framesLet’s face it, 95% of you reading this are probably not consistently successful traders, in fact, you’ve probably blown out a trading account or three by now. You probably enter a trade and then sit at your computer watching the market tick away or reading economic news for the next two hours, unable to think about anything but what “could” happen to your trade. Maybe you can’t even sleep at night because you are so addicted to the 5 minute chart and to watching every pip of price movement that all you can think about is the market. If any of this sounds all too familiar to you, it’s obviously time for a change; it’s time to start concentrating your trading efforts on the daily chart time frame.

the best success of forex trading - The Holy Grail Of Forex Trading Strategies – Daily Chart Time frames

You know how that old cliché goes about ‘getting what you’ve always gotten from doing what you’ve always done‘…well now is the time to make the change…the one lesson that I learned early on in my trading career that helped me the most, was that the noise and false-signals of a 5 or 15 minute chart (lower time frames) were simply not worth spending my time on or risking my money on. I believe that daily chart trading can be your “Holy Grail” in the markets, here’s why…

Trading the 5 minute chart (and other lower time frames) decreases your chances of success and is widely considered gambling:

I am going to tell you guys something right now that you may not have thought about before…you only need 1 big winning trade a month to be a successful Forex trader. Yup, that’s correct, 1 big winning trade a month.
How is that possible you might ask? Well, I’ll bet if you go look at your trading account history right now you might just find the answer yourself. You see, most of you are losing money because you are trading too often, and you are trading too often because you are fixated on over-analyzing the market, Forex news variables, and lower time frame charts (I consider any chart under the 1 hour to be “lower time frame”).

Some of you probably even know that this over-involvement with the market is why you are losing money regularly or struggling to keep your head above water. Yet, even though you know it’s keeping you from achieving success in the markets, you cannot break your addiction to trading lower time frame charts and over-analyzing the markets. But, the cold hard truth of the matter is that you will likely never be a successful trader until you first break this addiction…
Now, here is why I firmly believe that trading lower time frame charts is a waste of time and money.
Trading a 5 minute chart stimulates the reward centers of your brain…it gives you instant gratification. Having patience and discipline to focus ONLY on the daily charts takes more effort from your more highly-evolved brain areas. So, what it really comes down to is that traders who are addicted to the lower time frames cannot break free from the instant stimulation they get when they enter a trade…even if it usually results in them losing money, because each time they enter the market, their brains are flooded with endorphins from the “thrill” of potentially making a lot of money really fast. So, the point here is that traders who are addicted to trading a 15 minute chart are actually addicted to the feeling they get from entering the market, and this means they are unable to use their more advanced planning and long-term brain areas effectively. It does not mean they are incapable of using them, it just means that they either don’t know they are addicted to trading lower time frames, or they don’t know how to stop it.

the best success of forex trading - The Holy Grail Of Forex Trading Strategies’ – Daily Chart Time frames

I have personally only met a few day-traders who make money consistently, and they almost all seem really frazzled and strung-out, like a junky who cannot stop thinking or talking about their drugs (the market). Sure, it’s possible to make money from sitting in front of your computer 8 hours a day staring at each tick, but why in the world would you want to? Let’s face it, watching the market tick away is not really that fun, NOR is it productive…at all.
Now, let’s get back to my main point that trading lower time frames is decreasing your chances of winning and destroying your trading account. To focus on daily chart trading you need patience and mental fortitude, this takes intelligence and forward-thinking, it takes checking your ego at the door, and it takes a realistic attitude. Anyone can go to a casino and get lucky a few times at the poker table, but why do you think it’s possible for some people to win at poker again and again and again, to the point where they make a living from it? It’s because they have taken a longer-term view and they realize that their success is not defined by any one hand of cards, just like your trading success is not defined by any one trade. So, if you want to turn your trading around, it’s time to swallow your need to “control” the market and for instant gratification, and begin taking a longer-term view of the markets by focusing on the daily chart time frame.

Nial, I don’t have enough money to trade the daily charts…
I get this email almost every day: “Nial, how can I trade the daily charts when I need to have wider stop losses and I don’t have a lot of money in my account, I can only afford to trade the 15 minute chart for now, then when I build up my account I will trade longer time frames”…
Many traders think this way, and it’s usually just because they don’t know enough about Forex trading position sizing or because they think by trading bigger position sizes on the lower time frame charts they are going to somehow make money faster.

So let me set this straight for you guys right now: Through position sizing, you can trade the daily charts just fine on a small trading account…you just have to trade a smaller position size. But, let’s face it, if you have a small trading account you should not be trading large position sizes anyways! You need to get rid of this attitude of “getting rich quick” and thinking that trading a 15 minute chart is somehow going to provide you with more opportunities to profit.
Here’s the deal…Yes, there are MORE trades on a 15 minute chart, however, there are also more false-signals and there is more random market noise, so you are just going to end up taking more losing trades and stressing yourself out more. This all contributes to a poor trading mindset and ultimately to you losing more and more money.

Look at this chart below of the daily spot Gold market. There was an obvious pin bar strategy from February 16th that we discussed first in the members’ forum and then in the free commentary from February 17th, as well as in the members’ commentary. This trade setup was clearly with the existing up trend, it was well defined, and formed near two areas of support….a ‘no-brainer’ for savvy price action traders like my members. The point is this…if you wait patiently and hit one big winner like this a month, you are doing very very well. My main trading philosophy is to trade Forex like a sniper, and this is a prime example of how that’s done:

the best success of forex trading - The Holy Grail Of Forex Trading Strategies

Why you need to make the daily time frame your primary chart starting today…
• Daily charts provide more clarity

As I stated before, lower time frames are full of random market “noise” and false-signals, you will eliminate most of this noise by simply focusing on the daily charts. Focusing on the daily charts will also give you a clearer view of the overall market picture and will naturally improve your ability to read the market’s direction both near and long term.

• Daily charts help you develop a more effective and accurate market bias
Understanding the overall daily time frame bias of the market is very important for trading the daily charts and the 4hr or 1hr charts too. I do teach 4hr and 1hr time frame trading, but it’s crucial to master daily chart trading first so that you get a feeling of the underlying market sentiment. This goes along with developing your discretionary price action trading skill; you have to learn to “read” the market and get in touch with its ebbs and flows…it sounds a little cheesy maybe, but the market talks via price action, and if you “listen” closely enough to what it is saying you can understand where it is most likely to go next.

• Higher risk : reward

While the amount of money you risk per trade is a highly personal decision that depends on your individual financial situation, trading the daily charts can allow you to risk a bit more per trade than trading the lower time frames. Take note: I am NOT saying you should risk more per trade, I am saying that when you only TRADE 3 TIMES A MONTH (or thereabouts), you clearly can risk more money on one trade than if you are trading 30 times a month. So, this is an answer to the question “Nial, I can’t make as much money trading the daily charts as I can on the lower time frames”…yes you can because when you trade like a sniper you inherently enter far fewer trades each month than if you trade like a machine gunner, so this allows you to trade more lots per trade. However, keep in mind, this obviously only works if you can remain disciplined enough to not jump back into the market on revenge after you have a losing trade.

• Daily charts reduce the frequency with which you trade – slow and steady wins the race

One thing I firmly believe in is that Forex trading success is largely a result of the quality of the trades you take…not the quantity of trades you take. By simply reducing the frequency with which you trade, you will simultaneously improve your odds of succeeding over the long-term. You need to understand and accept the fact that 2 or 3 quality trades a month is going to put you much further ahead than 20 or 30 emotion-fueled impulse trades a month…no matter how good it makes you feel to take them. Remember, the tortoise won the fabled race because he was slow and consistent, instead of fast and full of emotion like the hare…

Shift your thinking (Take this stuff seriously)

Trading success is a direct result of the way you think about the markets. So, if you view the markets as a game of chance that you just like to “play around with” and you think you will make money by getting lucky every now and then…your trading account will quickly shrink in size.
Professional traders view the market as an arena to spot high-probability setups, setups that virtually “jump” off the chart at them; they then trade these setups and risk only an amount of money that they are 100% comfortable with losing. They also view the markets as a reflection of their own ability to control their emotions and actions in an arena of constant temptation…most people cannot do this consistently, and that’s why many people are bad at trading. It takes consistent control of your emotions and actions in the market to produce consistent trading results.

To shift the way you think about trading, you need to start getting excited about patience and about NOT trading…understand that the way you are thinking now is the way most traders think about the market…and most traders lose money…so if you can learn to do what most traders don’t do and think opposite from them…it goes to reason that you will greatly improve your chances of making money…

Making the transition into ‘daily chart’ price action trading
Now that you understand why trading a 5 minute or other lower time frame chart is counter-productive to achieving long-term success in the markets, it’s time to make the transition to daily time frame trading. There is no sure-fire way to eliminate the temptation of the lower time frame charts, but if you re-read this article and some of my other Forex articles, you will reinforce the reasons why taking a slower and longer-term view on the market is the quickest way to making money as a trader.
The daily chart time frame is at the heart of how I trade and how I teach; my price action trading strategies and my overall trading philosophy revolve around taking a calm and stress-free approach to the markets. I know what I am looking for on the charts, if it shows up, I enter the trade, if not, I walk away from my computer.

The underlying point that you should take away from today’s lesson is that the more you push and “try” to make money in the markets by burning your eyeballs out staring at lower time frame charts, the more the money you so badly desire will elude you. Trading is an art, and like any art, it takes practice to become good at, but trading is a different beast because to excel at trading you need to take a largely “hands-off” approach, meaning you have to look at and study the markets a lot while actually “doing” relatively little (meaning not trading). Indeed, trading is the ultimate test of self-discipline and will power, and the more you develop these abilities, the more you will find that the profits you seek from the markets are not so elusive after all. If you enjoyed today’s lesson and want to learn more about developing a calm and stress-free approach to your Forex trading, check out my price action Forex trading course.