FAP Turbo – How Does FAP Turbo Use Forex Trading Strategies in Order to Achieve Maximum Returns?
Foreign exchange market is really a very complex place for doing business. Trading in the forex markets is very much hard and requires a variety of tool and strategies in order to achieve the success. A lot of tools and strategies are developed by Forex traders like forex trading signals, software robots, and various examining and charting techniques.
The techniques that include fundamental and technical analysis are already known to many traders who are associated with the stock market related background. Even some online brokers grant this free feature on their website because an individual acquire also contributes to a company gain.
Forex trading tools also minimize losses and maximize gains. The forex trading software systems have no feelings and emotions that can influence the trading as in the case with forex traders. FAP Turbo is considered to be one of the top performers in the market of automated trading robots. It has its own built in strategies which differentiate it from others software systems. Moreover, you can also change its settings according to your stipulations in order to implement your own strategies.
It is equipped with highly advanced and complex mathematical formulas and bookkeeping principles that play a significant role in the development of a strong and unbreakable foreign exchange trading strategy. FAP Turbo has the capability to examine the market conditions accurately and then determine the right time to execute the trade so that it becomes successful. The software trading system is designed to work with only a single pair.
It has the capability to be run without any human involvement, controlling and forecasting. All these activities are automatically performed with this Forex robot. The developers of this automated software system have designed it in a sense that it can get maximum benefits through using different tools, tactics and strategies.
Many forex trading tools are acquirable in the market and their aim is to help out the traders so that they can acquire adequate profits easily. This software robot wage you 60 day guarantee period for evaluating and monitoring the performance of this system.
As seen on CNN, CNBC, Forex Traders: Ideal Forex Robots
Forex Tools: Free And Useful
A successful trade is reached through numerous information sources and exchange rates. A professional trader should need the historical data as well as the latest information about both economical and political conditions. Forex trading is all about predicting the start or rise of a currency against another currency and the forex trader will profit from the currency fluctuations.
Most trades are stated to be speculative, meaning the trader decides to purchase or sell based on the forecast of currency movements in respond to the current conditions. In order to ensure a profitable trade, one must have the updated information and latest analysis of the market condition.
There are a number of acquirable tools that might help you to be a smarter trader. One of the forex tools is the charting software. This will be provided by most brokers but it is also important that you learn to operate the software and read the charts. You do not need to comprehend each indicator acquirable as there are too many of them and not all are useful for your trading methods. Just comprehend about the indicators that your method might use.
Another tool is the forex simulator. This enables forex traders to view, upload or review the historical data at any given time. This can be used to confirm your understanding of the recognition patter and trading signals. This simulator also grants you to fast forward or rewind the data to test and retest your knowledge and understanding.
Not only does this forex simulator can shorten the months of training to a few days as you can pause, fast forward and rewind the date, this simulator can take snapshots of trades as well as using the indicator line as you like. But the ideal thing is that you can keep the trade journal in the simulator to refine your strategy when you start your Forex trading.
After entering the trade details you will be transmitted to a confirmation screen where you can view the current prices on screen and accept them. There is an option to freeze the quoted price, meaning the one involved in your transaction that you view on the screen without any slippage. Then accept the price and place your trade. Forex tools grant you to automatically sell off the currency if it falls drastically below a certain rate to refrain losses. Besides, you can also automatically sell the currency when it sores above a certain profitable level. This way you do not need to monitor your statement all the time yet healthy to prevent losses and acquire profit in the market.
Forex Trade secrets by a professional trader
See beginning of this article under study Forex Secret. Forex Literature As A 90-95% Of The Traders Loose Their Deposit. (Part I)
B. Williams quotes 5 bullets killing a trend, whereas I exemplify their insufficiency and I add up 11 more thereto, not denying the above 5 of them.
B. Williams idealizes the Elliott wave theory, whereas I show that the combination of fives and threes is none the idealizable, otherwise a mankind 100-year development project could have long been elaborated on the basis of Elliott waves pattern, leading to exasperation at the fact that humanity progress does not follow Elliott and Williams. The other thing is that nowadays brokers have mastered the job of manufacturing more waves out of the 5 initially.
The aforesaid is applicable to apiece of the 20 problems of Forex.
A portion of my live Forex trading methods are to be found in this book, while the other portion thereof is forwarded upon request. Those hot to continue training under my supervision as well as to trade live, please, feel free to contact me on my e-mail address below. It all could be funny unless it were sad. But IT IS sad, because the above examples are scaring in number. Bearing it in mind, do, go again through excerpts from distinguished scholars books:
- Awesome Oscillator (AO) serves us keys from the Wonderland;
- Accelerator Oscillator (AC) gives us with significant superiority over other traders;
- using AO is similar to reading tomorrow’s “Wall Street Journal”, while using AC is reading of the day-after-tomorrow’s issue thereof;
- by using AO solely, one might attain profits even without any knowledge of current rate; should the oscillator turn down, one might merely ring one’s broker and say: “Sell at the market price!”.
As You have guessed, these are extracts from B. Williams’s “New aspects of Exchange Trade”. Have You read the thing? And now, please, give a glance to the a foregoing figure, depicting the way, the vaunted Williams’s indicators might entail an abyss of losses.
But what truly makes my blood boil is as follows. B. Williams is a professional psycho therapist and his narrative style is none of an incidental one. This is a suggestive method by virtue whereof he attempts to demonstrate the exclusive, correct and faultless nature of his trading technique. The “faultlessness” is to be discussed in an individual chapter, and my only claim here is that I can easily draw hundreds of examples, where one can bump into loss by way of following Williams’s indicators.
By myself, I am an suggest of theory of chaos. But this theory is disclosed by Williams in a very primitive and a superficial manner, which fact results in his blind follower losses. As to the author, he resorts to propaganda methods instead of providing a clearcut distinction between the cases, where the above theory is 100% effective and those, where it is not. Williams could have explained to his admirers directly, that in these certain instances the theory is to be relied upon, while in these instances it is not to. The difference is in this, this and this. In the former instances one should necessarily enter, whereas in the latter instances one should desist from entry. But the guy haven’t done the job (due to either not being desirous or to not having adequate knowledge).
I was a success in finding out distinct operability criteria of the Williams’s technique. To achieve this, I had to improve the Alligator, by virtue whereof I enabled my students to easily pinpoint the difference between the Williams No.1 option (a trend, encouraging profits) and No.2 option (a flat, inflictive of losses).
By the by, it is supportive of the chaos theory methodological correctness and of imperfect Williams’s method structure, plotted on the basis thereof. Instead of acting upon the trader’s consciousness Williams resorts to forbidden subconscious programming procedures, thus stimulating man’s inherent and acquired instincts as if saying: ”If You wanna get rich, follow me! My method empowers one to trade without a single glance at a price! The Awesome Oscillator constitutes a key from a Kingdom!” Etc., etc., etc…
Hence, only 1 of 20 Williams’s followers exhibits Forex-earning abilities in a most favorable environment. Thus, under this statistics, B. Williams is superior not to be idolized, the way he has been by the crowd of his admirers. On the other hand, other Forex maestros’ trading techniques are far worse than that of B. Williams. So, let’s continue illustrating Forex truisms being erroneous in live trading.
- The “Theory of Chaos” of B. Williams. The author has not advised what should be added up thereto. A separate chapter here is dedicated to the issue.
- Trader’s psychological problems. I haven’t found any revelations pertaining to THE WAYS OF ELIMINATING THESE PROBLEMS.
- The issue of a stop-loss order is certainly important: even under trend hedging is an indispensable conserving shield against market surprise. But is the problem too far complicated to require a dozen pages’ elucidation? Has the author beheld any secret? Wah! He hasn’t noticed anything but he still has repeated all that wanders from book to book on Forex.
Once I was stunned by a question place forward by one of my students after having read B. Williams’s “Trading Chaos”: what’s the use of giving so much attention to the stop-loss problem and above all what’s the good of chewing over the role of country cushions in the vehicle industry as though readers are down with minority?
Doubtlessly, it’s funny reading that Williams has never violated traffic regulations, priding himself on the occasion. Any psychiatrist could tell a hell lot about such a personality type, although, I should admit that Williams is American, not Russian.
Drawing picturesque, memorizing examples, apiece scholar is right to insist on conserving barrier placement as a loss killer. But there is hardly anyone to introduce certain novelty into the issue and to disclose the secret as to what there should be in the trader’s store besides a stop-loss to insure against his deposit melting and extra losses. A separate chapter here is targeted at the issue.
I have shortly come crossways an aphorism: “Genius is not to the effect, that nothing can be added thereto, but it is to the effect that nothing can be deleted there from”.
If You go through numerous books on Forex at this aspect angle, You are sure to surprisingly find out that 90-100% of their contents might be subject to withdrawal. WHY? BECAUSE nothing new and 100% correct is offered therein. Instead, reiteration is going on of what is familiar to any professional, since everyone is itching to exhibit one’s originality by way of retelling: a paramount dominance of FA over Forex exchange rates; continuation and reversal patterns; a stop-loss importance; a divergence being a component of a trend reversal, etc., i.e. book-to-book travelers.
“An outstanding Forex trading techniques” and “a genius scholar”, etc., making their appearance in books’ abstracts and annotations are off springs of 1% originality added up by an author to 99% of common knowledge.
Sale is publisher’s primary target, giving birth to “genius” mediocrities and plagiarism. Standing separately among these books are opuses by B. Williams, being admired and scrutinized regularly by the majority of scholars and by myself. But EVEN HE can't be eligible as “genius” with statement to the above formula. He is rather “eccentric” than “genius”.
The thing is not, that his technique is addenda-allowing (this fact backs the correct Williams’s choice of the chaos theory to be applied to Forex) and I easily managed to add 11 trend-assassinating bullets to the 5 of Williams. The thing is that a number of Williams’s postulates ARE WRONG and thus loss- inflictive. These can be and should be subject to removal.
CONCLUSION: I guess, it’s understandable by now, that script-writing has turned to be business for scholars, incorporating additional advertising and additional charges for their students. However, the above is not worth millions Forex losers sacrifice.
Much more respect-triggering is Warren Buffet, having made a minimum of USD40 bn at the stock market without writing any books on his trading tactics. W. Buffet is the world’s second-rich man after Bill Gates, even though this fact being thoroughly doubtable. B. Gates is supposed to declare the whole of his income obtainable from the Microsoft Corporation, whereas W. Buffet, being a trader, is sure to deem himself entitled to show the Inland Revenue what he really wants to.
The difference is evenhandedly evident. The profit obtained from US companies, constituting the Gates official fortune major portion, might be kept track of, as well as the offshore profits might sometimes be properly checked. But Buffet’s profits attractable at all. Do You anticipate a man, lending his own daughter a sum of USD20 against a receipt, to grant ALL of his profits to be taxable by state? Or a moderate portion of profits is sufficient, yeah? It is entirely his job, whereas we are to learn to acquire at least a spoonful of what he has acquired during 40 years of his activity at the stock exchange.
Thus, to cut it short: a classical Forex literature exhibits but an anti-scientific unsystematic nature, constituting a “crise de genre” and triggering losses among 90% of beginners, abandoning Forex market.
In what does science differ from a philistine and amateur effort? In a systematic and neutral nature, in a methodology perspective. In there any of the above to be found with scholar literature on Forex? No, but instead there is in abundance:
A. Tautology and absence of new approaches. From book to book world-distinguished scholars feed traders (as if the latter were silly tiny chaps) with stories about R&S levels importance, technical indicators, continuation and reversal patterns, etc., which is as interesting and instructive for a professional trader as ABC reading is for a professor of philology.
B. Absence of integrity. Individually, it is all clear: Elliot waves, Fibonacci levels, resistance levels, reversal patterns, etc. But what’s the way it all is interconnected and integrated? In what way it is influential over apiece other? What is primary and what is secondary? Envision a physician diagnoses and cures patients without a slightest intent of interaction of digestive, cardio-vascular and other systems.
This is what exactly happens to Forex beginners. They are sure to have learnt something, but they are being muddleheaded instead of having a systematic knowledge. Medical students undergo a course of anatomy. Geologists and military men make use of topographic maps. And what do Forex beginners have to this end? You are free to interrogate any scientist if he has knowledge of parts of science without having knowledge of the whole. Guess, what he’s gonna answer? And now give consideration to what is being currently published on Forex and being accessible to anyone. Thereafter You will easily “evaluate” the “outstanding contribution” made by apiece of Forex scholars.
4. Methodology and techniques subjectivism and absence of objectivity. See live scholar, Th. Demark’s “Technical Analysis As An Emerging Science” recommending to manually draw R&S lines from the right to the left instead of so previously doing from the left to the right. The book’s preface qualifies it to be “refined techniques built during a quarter of a century of a laborious scrutiny of market tendencies and projecting methods”. And thereinafter: “Demark’s empiric-data strictly scientific approaches are in striking difference from an artistic intuitive one thus constituting a rational basis for dynamic systems, mechanically outputting market signals.” But, with having not disclosed his system’s essence, is Demark aware that his subjective Forex trading recommendations might happen to entail severe mistakes. Yeah, he substantiates his viewpoint in chapter “Why price projections might not go into effect”: “…due to no technique being perfect”. Good a science with “no technique being perfect”!
Demark is looking rather a philosopher, than a trader with his tirade being nothing but a sophism, made use of as back as in ancient Greece to wage grounds and endorsement for any kind of absurd.
In accordance to Demark, “a mistake becomes obvious the next day as soon, as the first deal price is registered”. I am itching to ask the scholar: “How many points might a currency travel in a wrong direction during an connector day?” I am answering myself: 100 pts or 200 pts or more. Demark diagnoses: “This instance evidences a breach, indicative of a new opposite tendency”. Well, I’ve got it.
Once there is loss, one should loss-close and enter oppositely.
Take a look at the picture below:
Fig.10. EURUSD H1 chart as of March, 22 – April, 18, 2005 manifesting a month-long flat. (See Note below)
How many days should one per-Demark loss-close with the rate repeatedly swiveling as though to Demark’s ill luck? The scholar has to be asked, how massive should a trader’s deposit be to survive Demark’s experiments, being ranked “refined techniques” and “strictly scientific approaches”, “cardinally different from others’ ”, less scientific ones, as I can guess.
The opus author will again start soothing upon You: “One oughtn’t to anticipate herein outlined technical methods and indicators to offer profits and not to entail losses. Forex trading involves both: a profit opportunity and a loss risk. Preceding results are in no way guarantor of appearance success”. Further on, with greater cynicism and hypocrisy: “Should You be seeking a trading panacea, place this book aside: it’s in no way helpful to You”. Well, what’s the use of buying the book at such price?
Demark, by the way, gives the interpretation of his book’s neutral to be “fuelling readers with methodology, encouraging one to systematize various TA techniques”. Great! I thought, it were a new discovery of Forex regularities to be delivered to traders. But it looks, like the scholar has plunged himself into systematizing early 50%-correct discoveries without taking any pertinent responsibility.
Hence, no avail to buy the book and to litter one’s brain therewith, since Forex rates enjoy 50/50 up-down travel chance, even under the probability theory.
Thus, not too much understandable, where Demark’s scientific approach manifestation is to be searched, whereas the essence of things is incomprehensible once the reversal results come evident after an connector day only with no reference to his book.
John G. Murphy, another Forex scholar, outlines in the preface, that the “less art – more science” slogan is specially topical now that greater entities start taking interest in this area.
As to myself, I have truly appreciated the preface writer Murphy joke as being filled with subtleness and tristesse.
Now, pertaining to science-to-practice correlation and theoretical conclusions implementation… How many scholars of those hundreds referred hereto resort to live examples while teaching long and short entries and close ups thereof? Very few of them:
- B. Williams “Trading Chaos”, “New aspects of Exchange Trading”;
- J. Murphy “TA of Futures Markets”
- S. Nisson “Japanese candlesticks. Financial markets graphic analysis”
- A. Elder “Basics of Exchange Trading”
- L. Williams. “Long-Term Secrets of Short Term Trade”
- Ch. Lebo, D. Lukas “Computer Analysis of Futures Markets”
- D. Swagger “TA, Comprehensive Course” … and hardly few more.
Disappointing enough, but it is evenhandedly lucid why 90% of beginners mutate into failures and desert Forex.
By way of getting familiar with the SYSTEM, one will suddenly realize how smooth are Forex artifacts to get apparent one from another, e.g.: M5 Elliott waves constituting M15 wave I, this wave being but H1 and H4 corrective within certain Fibonacci levels.
One gets clear vision of what all the Forex-traded currencies are doing now and what they are going to in half a day. Williams did have grounds to claim, he needs several tens of minutes to examine tens of charts. He DID have understood Forex as a system, though he has offered but the system components portrayal in his books. Depending on where utilized, the Alligator might appear to be responsible either for a profit or for a loss. But Williams has not even taken pains to present a differentiation between the Alligator being a profit assistant and the Alligator being a loss bringer.
The above is conditioned by the Williams Alligator being a great TA tool, but pertaining to a certain AREA OF Forex only. Other areas require other TA facilities. I will do my ideal to instruct You to effect proper estimation of long-term and super short-term entries being appropriate for the moment.
I will also live on why it is not difficult to add extra 11 trend-killing bullets to the 5 of Williams’s; why it is simple to build up a currency travel vector regular projection. The whole thing is minimized to several criteria, being constantly effective irrespective of currency intentions. As a result, You will not have to monthly pay quacking mountebanks’ impotent regular forecasts.
But now let’s move on with Forex scientific criteria. Stagnation and dogmatism are substitute attributes of Forex folios’ anti-scientific substance. Have You ever come crossways a criticism of any Forex-oriented theory? I mean a weighed neutral criticism, assigning credits to the author for elaborating a revolutionary theory, which has by now got noncurrent due to a number of neutral reasons and thus requires improvement, i.e. replacement.
For instance, I have found nothing of the kind in relation to the 100-year old Dow theory, originally incorporative of benign principles. But life goes on, and there seems no reason to head-hammer life-rectified Dow’s postulates:
- a long-term trend (primary, basic as per Dow) being several years long. Curious enough to spot a currency pair to stand open for so a long period;
- a medium-term trend (intermediate tendency) being several months long. As per Dow, the MTT is opposite (corrective) to the basic trend;
- a short-term trend, not exceeding 3 weeks and incarnating minor fluctuations within the intermediate tendency;
- intraday trend being per-Dow midget ripples, not worth paying attention to.
You are now welcome to take a close look at the figures below, as of October, 2004 through March, 2005.
Fig.11. EURUSD D1 chart. (See Note below)
Fig.12. GBPUSD D1 chart. (See Note below)
CONCLUSION: This theory of Dow’s might be deemed effective rather till late 80s, than presently.
Nowadays, with 3 pips spread, 50-200 pips pullbacks and trends not exceeding a week, the Dow theory MUST BE recognized as being despairingly noncurrent and trader-hostile, since, under a 3-pip spread, it is, certainly, top of recklessness and stupidity to stand open for months or years. A different trend classification is to be called for, meeting updated Forex environment standards.
I guess there’s no need to continue being proponent of the fact that presently Forex theories are noncurrent in their majority, with this sort of methodology being requisite for analysts rather than for traders. As opposed, I hold it more appropriate to forward my entry and exit technique to traders willing to conduct successful and loss-safe trading.
By way of prompting: please, attempt to view Forex as a system inclusive of components being familiar to You: Elliott waves, reversal patterns, Fibonacci levels, MAs, ally currencies, etc. All the above staff is integrally intercommunicative rather than existing individually, the way, apiece organ is in the human body.
I DID have understood it, and I realized the way B. Williams is healthy to examine tens of currencies within tens of minutes in order to execute correct long and short entries.
It might look surprising to someone, but a eligible physician is capable to diagnose Your body hazards after a short examination and speaking to You. The physician has actually analyzed but several organs, but his knowledge system has empowered him to jump at wider conclusions, as Williams at Forex.
GROSS TOTAL. Steady and regular Forex profits are real opportunity. There is hardly another area which enables one to knock up a fortune without having rich aged relatives abroad, without having to join one’s native country’s throughout corruptible authorities or else. If You have discovered THAT ANOTHER area, You are free to get engaged therein. Then, Forex is not likely to be requisite.
FOREX Investment Strategies That Work
Using the British Pound’s July 24th chart taken at 9:30pm CET, the forex trading strategy taken from its short side is illustrated in a step-by-step manner showing exactly how the trade was executed using signals from the forex market as well as a number of indicators in trade that is focused on the bearish side despite overly bullish market sentiments. This trade came off with profits, but this still does not mean that this same stance can yield the same results each time. Successful strategies simply trade the odds and try to be right more times than being wrong.
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The charts showed the British Pound to have extremely bullish forecasts at that time with speculators piling into it with greed for profits. The CFTC Net Traders Positions show that speculators are trading at record longs with an 80% bullish indicator. In this scenario, it is clear that a correction in the market is impending. The only thing left to do is to time the market properly. In the forex trading market, timing is everything. There is no way to predict the exact time when a currency is going to move a certain way. This is where momentum indicators come in. With a good free chart service such as those provided in futuresource.com, you can examine the charts using the Relative Strength Index and stochastic indicators.
The charts will show that the RSI is at bullish extreme and has double topped. While this shows a tapering of the momentum, it does not necessarily signal going short. It is the stochastic that shows a short position to be a profitable trade. Seeing the crossing of the two lines in a bearish convergence triggered an execution of the trading signal. With the odds in favor of the trade, prospects of profits remain to be in upward movement.
Trading with momentum can work for any forex trader who balances trades with low risks and high rewards. Again, there is totally no way to predict how the forex market will move so never duped into putting money into ebooks that promise success in the forex market. You can actually set up your own forex trading system that you can trust and comprehend to be logical.
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Forex Trading, Currency Forecast
I am hardly surprised when friends and clients tell me that they are not consistent in their winning trades in trading forex. Many times, friends relate their stories of making a giant win in the markets at one time, and then will continue to tell a depressing story of losing it all in the next few trades. Worst, some have even lost their capital. It is when they are at the verge of abandoning the entire intent of making a career of being a professional trader and when their financial losses are really hurting them, that they seek for help.
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I have identified 5 of the most common flaws of forex traders, and have helped many of them to rectify their trading problems. Let me share them with you.
1. The Most Common Flaw
I have often been presented with rather sophisticated trading systems by traders who come to seek help. Most of them have been attracted by the promise of multi indicators and sophistication in the use of these trading systems. Many of them appear to be a rehash of the principle of confluence. What this simply means is that if a multitude of technical indicators show the same signal to buy, sell or hold, then the pure sense of synergy occurring recommends that the signal generated is correct. This sounds good in theory, but in practise, not all the indicators concur at the same time.
For example, a trading system might have a moving average indicator with a positive crossover occuring when its Relative Strength Index or RSI is at the lower boundary or is oversold at the 30% band. These two indicators occurring together at the same time is a good enough indication that the correct signal is to buy. But what happens in real life is that the deriving the decision is not that simple.
Why is that so?
Many of these “confluence” systems throw in other indicators that depict the price movement and do not add any value in helping you to trade. As a result, you get a pot-purri of technical indicators comprising oversold and overbought indicators such as stochastics, stochastics-RSI, momentum indicators, bollinger band breakouts and candlestick chart pattern recognition, and even artificial intelligence systems such as neural networks.
The end result is that many of these losing traders are unable to make a decision as to the true direction of the market and either get into the market too late or too primeval or just remained paralysed from making a decision at all. It is therefore no wonder that they are losing money by the buckets.
So the most common flaw among forex traders is the use of an unsuitable trading system which does not serve its purpose as a tool to help them trade profitably but rather confusing and complicating forex trading until they become perpetual losers.
2. The Most Hazardous Flaw
An other flaw that I would classify as the most hazardous flaw of them all is that of greed and fear.
This is an emotional issue interwoven into the entire process of trading.
Giving friends and clients a listening ear, I have often heard how a profitable trade can lead to euphoria, and exuberance, and greed comes in and over-ride all aspects of risk management. The trader who is profitable at that stage will over-ride all his stop loss positions when prices begin back, believing without substance that the price will continue to go up many pips for a longer period of time. Risk-reward ratios are thrown to the wind. These traders see their winning trades ride up into large profits, only to see them correct, pullback and crash down to earth. Worst, they are then paralysed by greed which tells them to move a tiny longer for prices to recover, which they normally don’t, but continue to pullback and consolidate and they have to take a loss at the worst doable time.
The trader is then struck by fear as he realises his position. When the next buying signal comes, he is paralysed by fear and unable to open any position. That is why when you override the emotional side of trading, the psychology of trading and the discipline of trading, you commit the most hazardous flaw in forex trading, with financial ruin covering the door.
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3. The Flaw of The “Unconcerned Man”
The third important flaw I often encounter in my business of coaching and consulting with traders is what I call the flaw of the “Unconcerned Man.” I know the term of being called unconcerned, or even lazy is anathema to many traders, but the truth is that many traders enter into trading without a driving need to become successful and profitable. They are into trading just because they have heard it is simple game – that making a killing from the markets is easy. They do not treat trading as a business that involves skill, preparation, trade management and re-investment. To them, it is a trading game of fun, where they can afford to lose. They become unconcerned about their trades which are still in an open position. They begin off with the wrong footing or with the wrong purpose, and do not have that burning desire to be successful.
4. The Flaw of the “Inadequate Man”
Now, some of them begin off with the ideal of purposes. Some of these losing traders were all fired up from the start. They did place some effort to learn to trade. Many of them do go for free introductory courses to learn “here a little, there a little”, picking out some trading tips from chat rooms or forums. But the measly tips they obtain from these sites are insufficient to see them through the practical difficulties of trading the markets. Their knowledge could not see them through their desires, their direction, and they unsuccessful to attract the wealth that was doable through their trades. Inadequacies become their most potent flaw.
5. The Dogmatic Man and His Fatal Flaw
Trading signals you obtain are not engraved in stone. Trading is dynamic, as prices move and are affected by circumstances. The inability to accept losses, and profits as they present themselves have led to many a ruin in forex traders. When a trader becomes dogmatic, and inflexible, sticking to his own individualized perception of a trading signal, despite all the factors telling him that the trade has gone wrong, he is going to lose more. This is particularly so in forex trading. In stocks, the purchase and hold policy is more relevant if the stocks are fundamentally sound, as they can be cyclical and can rebound in prices. But in forex where the leverage is very high, your capital can be wiped off if you do not react to your signals promptly, and stubbornly maintain an unchanging individualized view of “correctness”.
In trading, you can be wrong in the market and still emerge a winner if you take prompt action to correct your position, but the dogmatic man continues in defiance of the true factors affecting his trade, and then loses a huge part of his capital. When he loses all his capital, he is unable to trade another day and that is the fatal flaw.
Understanding these flaws, we will continue to discuss effective ways of overcoming them in Part #2 of this Article series, so that you can become a profitable and successful forex trader quickly.
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Aeron Forex Auto Trader, Only For $5. About Forex Currency Exchange And Forex Systems
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Forex Robots – This One Makes Great Profits and Even Better It’s Free!
Many traders want a forex robot that works and enclosed you will find one that is and it won’t cost you a dollar, yet it will out perform over 95% of the robots sold online. Here it is take a look.
Mechanical forex trading systems sold tend to destroy accounts. This is because the track record the forex trader purchases is never real, it’s a paper exercise done in hindsight and normally carries this warning:
“CFTC RULE 4.41 – Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results might have under-or-over compensated for the impact, if any, of certain market factors, such as demand of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any statement will or is likely to achieve profit or losses similar to those shown”.
The system has never made real money and paper money means nothing, as you can’t spend that in the supermarket.
These robots are curve fitted i.e. the rules are bent to fit the data and produce a profit.
Data never replicates itself in the exact sequence again and the system takes a bath.
Now were going to look at a simple forex trading system which can't be curve fitted by its very nature (as it’s only one rule) and has been traded by savvy traders for over 20 years and continually produces great long term profits.
It works on any trending market and of course, currencies are one of the ideal markets for trends.
Here is the system:
Buy a new 4 week high and sell a new 4 week market low.
That’s it. Very simple and it’s very profitable as it’s based on 2 core foundations that will never change:
1. Huge forex trends last a long time
2. Breakouts are where most new trends begin from
Don’t adopt because its simple it doesn’t make huge gains it does.
You can easily test it and see.
Simple forex trading systems always work best, because they are very robust with fewer elements to break than complicated ones.
This is easily proven by looking at all the advances we have seen in forecasting in the last 20 years – we have quicker prices, more powerful personal (your desk top personal has more processing power than the personal that landed man on the moon!) and more complex theories – but has this changed the success ratio in trading?
Not at all.
95% still lose and 5% win and this will always be the case.
Does the system have a downside?
Yes it does when forex markets trend sideways it will get chopped and incur drawdown.
Here you can modify the exit and exit on a 1 or 2 week stop, then go flat and move for the next 4 week trading signal to get you back in.
Not many traders will bother with this system though and it’s not because it doesn’t make money, it’s because they perceive complexity helps them.
After all, a neural network or system based on chaos theory sounds like it should make money and makes them feel they have technology on their side – but the above system will beat most of these more complex systems hands down.
I once made the mistake of buying a system off an ex NASA engineer and felt it would help the result it wiped my equity out in two weeks!
The 4 Week Rule on the other hand, I have used for 20 odd years and its done great – some periods of drawdown (but all systems have them) and a thumping profit.
To run this system you need tremendous discipline, as it’s not fussy about market timing and it’s brutally mechanical but if you have discipline then it will work a treat.
So before you purchase a forex robot which hasn’t been proven try this one – it’s been used by some of the world’s top traders, is simple to comprehend apply and can lead you to currency trading success.
Check it out and keep in mind it won’t cost you anything to test and it you will surprised at how much money it can make if executed with discipline and with an eye on long term performance.
Mechanical Forex Trading Systems – One That’s Free You Use for Profits Now!
In just 15 minutes I am going to show you a mechanical trading system which is free which you will comprehend and will be healthy to go away and trade for huge profits. So if you want to does this then read this article and I will give you a trading system to lead you to currency trading success…
A Easy Robust System for Huge Gains
This system before we look at it is incredibly simple-n but do not think because its easy it wont make money, it can and does.
Don’t confuse this forex robot with the junk ones sold online, promising you instant riches and all they give you is a paper simulated track record -, this one has been traded by some of the world’s top traders and is proven in the brutal hard world of global FX Trading.
The System Rule
OK its time for the system. It’s got just one rule to think about and apply so here it is:
Liquidate any short positions and take a long whenever the price exceeds the highs of the previous 4 calendar weeks and reverse and close out any long positions and go short, when the price falls below the lows of the previous 4 weeks.
This system has a constant position in the market, acting as a stop and reverse system, or SAR.
Advantages of the System
It’s easy to understand, as we all know currencies trade longer term and this system will place you on the side of EVERY huge trend, as most huge trends begin and continue from new market highs or lows.
You don’t need to be subjective, it’s completely objective, so you have disciplined trading system and it tells you exactly what to do and when to do it.
Disadvantages of the System
While it is completely objective, you need discipline to follow it and comprehend it’s not fussy about pinpoint market timing.
This is not a disadvantage as such, because it makes money, no system is perfect and if it makes money well, that’s what we all want.
Another disadvantage is you will grappling drawdown when the system gets chopped and whipped in sideways, non trending markets. Now, the huge trends will compensate but it depends on your tolerance to drawdown. If you want to smooth your equity curve, you can take the following and use it as a filter:
When in your positions set a stop at a 1 or 2 week high or low and go flat – then enter the market on the next 4 week trading signal.
The next is a disadvantage that traders see which is not really one – but most traders will think it is.
This system is not trendy or complex.
For some reason traders like glossy packaging, colored graphs and fancy obloquy but in the hard world of trading, where only real dollars count, this makes no odds – its money in the bank which is the only criteria a system is judged on.
Complexity and trading success is a myth. Since trading began, 95% of traders lose 5% win and this is DESPITE all the advances we have seen in forecasting, number crunching spped of data delivery and personal processing, so this all hasn’t helped – makes you think doesn’t it?
The system was actually devised by one of the legends of trading, considered the grandfather of modern trend following – Richard Donchian. He is acknowledged as a trading legend, so it’s been created by someone who knew the game of trading and numerous well known savvy traders have used it and admired it – like Richard Dennis.
Now if it’s good enough for them it’s good enough for you and me.
The system is brutally simple, works and will continue to work and as a mechanical forex trading its one of the best, as it’s so easy to get started with. It won’t cost you a dime and makes money, what more could you want?
Test it out and you will see, this easy system can help you in your quest for currency trading success.
Find The Forex System That Is Right For You
In the past, the term Forex was something that only big corporations and businesses used. The big foreign exchange market is where companies invest in the currency market. Now, using a Forex system, anyone with a individualized personal can invest in the currency market from the comfort and country of their own home.
Traditional currency investing can be a scary proposition and if you do not have the proper tools and training you will probably end up losing more money than you make. You would need the help of an costly broker to advise you on where to allot your money based on changes in the exchange rate. This is where a forex system comes in.
Many companies know exactly how Forex works and are offering a forex system for buy that gives you valuable advice on how to use Forex, no matter what knowledge level you’re starting from. Detailed instructions are given as to when to buy, when to hold, and when you should sell.
Basically, most forex systems wage a real time indicator as to what the markets are doing. Signals are given to you so that you know when you should sell and buy and how swiftly this needs to be done.
With the world wide web being such a common tool in the investment world, you will be sure to find many companies providing forex systems of some form for purchase. You should decide on which one is ideal suited to you and your trading style.
Most forex systems are also optimized for trading big or small amounts as there are usually stop limits or holds on the systems which the companies use for control. They also usually offer a full support panel as they want you to succeed with your investments and keep trading.
Forex systems are designed to make it convenient for seasoned trading professional to use, as well as beginners to the whole foreign exchange trading game. If you have found a good forex system you should always be informed of indices and markets and it should also include other services like regular forecasts from experts, and free market trading tips for the major currencies like the British Pound, Asian Yen and so forth.
Once you become more comfortable with using your forex system, you will be more likely to invest larger sums of money for potentially larger gains.
So begin now and explore the various forex systems acquirable today.
How Many Kinds of Main Strategies are There in Forex Trading?
There might be dozens of strategies in Forex trading. Let’s just speak about the roots.
Nature Of Market:
Every thing in the universe has its NATURE. So is Forex market. So is each currencies pair in this market. For example, GBP/JPY always moves faster, and its wave range is longer than other pairs, such as a hundred pips during a day or even a hour. EUR/GBP generally waves narrowly several pips only within a day. For American, EUR/USD and GBP/USD like to sleep in day and diversion at night. AUD/USD and NZD/USD look like twin, they commonly act in the same style, if one of they goes north, another one does not like to go south. But EUR/USD and USD/CHF are doomed to be enemy, while one of them flies up like a hydrogen balloon, the counterpart mostly will drop like a lead ball. And so on, so on.
Once we find this kind of “Nature of Market”, we can develop and figure out some strategies for particular currencies pairs, just follow their nature, predict their moving direction and range. Then we will get our own trading strategy and system.
Fundamental Trading:
In Forex market, many professional analysts like to use a kind of method to predict the future. It is so-called “Fundamental Analysis”. Based on this method, they develop many kinds of strategies to trade Forex. These are strategies of forecasting the future price movements of currencies based on economic, political, environmental and other relevant factors and statistics that will affect the basic supply and demand of whatever underlies the foreign currencies.
If you like to try Fundamental Trading, you need learn and comprehend a lot of finance knowledge. Actually, not only finance knowledge, you need to be interested at many things of this world, including politics, economy, geography, culture, diplomacy, even military affairs. And you need to study the core underlying elements that influence the economy of a particular entity. For example, when the USA’s GDP or employment report is strong, you start to get a evenhandedly clear picture: the general health of America’s economy is good. So the US dollar should be stronger than other currencies. But how far can the US dollar go? Fundamental Trading might not answer this question very accurately. You might need to come up with other precise tools as to how saint to translate this information into entry and exit points for a particular trading strategy.
Hedge:
In finance, a hedge is an investment that is taken out specifically to reduce the risk in another investment. Hedging is a strategy designed to minimize exposure to an unwanted business risk, while still allowing the business to profit from an investment activity.
In FOREX, there are two kinds of similar “hedging” strategies:
1, Purchase and Sell the same currencies pair, same lots, same timing. Then let it go. While one of those orders goes north, the counterpart will go south. After the winner takes profit, we can move for the loser turning around. In a yo-yo market, this method works well.
For example, purchase 2 lots GBP/USD at 2.0003, at the same time sell 2 lots GBP/USD at 1.9997. While the rate rises up to 2.0053, we close the purchase order and take profit 50 pips. Now, the sell order will draw down around 50 pips. Let’s move for the rate falling down, it will start down usually, especially in yo-yo market environment. If the rate drops down to 2.0037, close the sell order, the sell order will lose 40 pips. Does it hurt? No. Don’t forget the 50 pips we have taken at the purchase order. Totally, we can get 50-40=10 pips. Furthermore, if the rate keeps falling, let’s state down to 2.0027, we can take 50-30=20 pips, etc.
Some people would doubt it… doesn’t this “strategy” sound like hedging flat for nothing, just paying double spread? Why bother? Well, they are right, because we forgot mentioning the key point: timing of closing orders. When to close the winning order to set a foundation and when to close the losing order to lock the profit, there are some tricks inside. Experienced traders use technical analysis skills to decide this vital timing. Believe it or not, those experienced traders state that this method helps them screening false signals out.
This kind of “Yo-Yo Hedge” can work at any currencies pair.
2, Purchase (or sell) unequal lots of special currencies pairs and purchase unequal quantities of another kinds of currencies pairs which usually move in the opposite direction. This seems a “Semi-Hedge” trading strategy. It is created based on “Correlation” between some particular currencies pairs. So it is not suitable for each currencies pair.
Actually, this kind of hedge has another feature: earning SWAP! You acquire interest regular on the held position which can yield up to 50% per year of your full statement balance.
There are several pairs can do it. Such as EUR/USD Vs. USD /CHF, GBP/USD Vs. USD/CHF, AUD/USD Vs. NZD/USD, EUR/JPY Vs. CHF/JPY, GBP/JPY Vs. CHF/JPY.
Let’s take the EUR/USD and the CHF/USD pairs.
These pairs are historically negatively correlative 93-98% of the time. That is when one pair goes up the other goes down, and vice versa, up to 98% of the time. In a high leverage statement (as high as 400:1 or 500:1), you could acquire 50% SWAP interest in a year. How? Let’s state you have $5,000 in your statement and a 10% risk margin set. If the net interest we receive is 1.25% annually, this 1.25% interest will be enlarged to 50% per annum, by the 400:1 leverage.
And, this return does not include the purchase low/sell high profits.
But, if the base of this kind of hedge collapses, it means the “Correlation” does not exist any more, for example the “Correlation” drops under 50% or lower, there will be a disaster.
Arbitrage:
Some people call “Arbitrage” as a risk free strategy. But other people call it as a trick which looks like the cat pawing chestnuts from a fire. But in theory, its risk is minimum in deed. We introduce three types of arbitrage strategies here:
1, Triangle Arbitrage: Searching for two highly fast-moving pairs (like EUR/USD and USD/JPY), the price of a not-so-fast moving pair like EURJPY should always be derived by multiplying (or dividing, etc) the fast-moving pairs. So for example, if EUR/USD is 1.4871 and USD/JPY is 108.24, the logical price of EUR/JPY should be 1.2 x 120 = 160.96. But at the same time, the real EUR/JPY rate is 160.90. The slower moving pair lags behind the logical price, then profit opportunity comes.
In practice currencies are quoted with a bid ask spread, so a trader should be careful that he is actually buying at the quoted ask price, and selling at the quoted bid price. Other transaction costs, such as commissions, might also invalidate the apparent free lunch.
More pairs:
AUD/CAD CAD/JPY AUD/JPY
AUD/CAD GBP/CAD GBP/AUD
AUD/CAD USD/CAD AUD/USD
AUD/CHF CHF/JPY AUD/JPY
AUD/CHF GBP/CHF GBP/AUD
AUD/CHF USD/CHF AUD/USD
AUD/JPY EUR/JPY EUR/AUD
AUD/JPY GBP/JPY GBP/AUD
AUD/JPY USD/JPY AUD/USD
AUD/USD GBP/USD GBP/AUD
AUD/USD USD/CAD AUD/CAD
AUD/USD USD/CHF AUD/CHF
AUD/USD USD/JPY AUD/JPY
CAD/JPY EUR/JPY EUR/CAD
CAD/JPY GBP/JPY GBP/CAD
CAD/JPY USD/JPY USD/CAD
CHF/JPY EUR/JPY EUR/CHF
CHF/JPY GBP/JPY GBP/CHF
EUR/AUD AUD/CHF EUR/CHF
EUR/AUD AUD/JPY EUR/JPY
EUR/AUD AUD/USD EUR/USD
EUR/AUD GBP/AUD EUR/GBP
EUR/CAD AUD/CAD EUR/AUD
EUR/CAD GBP/CAD EUR/CAD
EUR/CAD USD/CAD EUR/USD
EUR/CHF AUD/CHF EUR/AUD
EUR/CHF GBP/CHF EUR/GBP
EUR/CHF USD/CHF EUR/USD
EUR/GBP GBP/AUD EUR/AUD
EUR/GBP GBP/CAD EUR/CAD
EUR/GBP GBP/CHF EUR/CHF
EUR/GBP GBP/JPY EUR/JPY
EUR/GBP GBP/USD EUR/USD
EUR/JPY GBP/JPY EUR/GBP
EUR/JPY USD/JPY EUR/USD
EUR/USD GBP/USD EUR/GBP
EUR/USD USD/JPY EUR/JPY
GBP/JPY USD/JPY GBP/USD
2, Hedging Arbitrage:
This technique is the safest ever, and the most profitable of all hedging techniques while keeping minimal risks. This technique uses the arbitrage of roll over interest rates (SWAP) between two brokers.
One broker which pays or charges roll over interest at end of day, and the other should not charge or pay this kind of roll over SWAP interest. The main intent about this type of Hedge Arbitrage is to open a position of currency (Fore example, the highest SWAP GBP/JPY) at a broker which will pay you a high interest for each night the position is carried, and to open a reverse of that position for the same currency with the broker that does not charge interest for carrying the trade. This way you will acquire the interest or SWAP that is credited to your account, risk-free.
3, Netting Arbitrage:
The main intent behind the strategy is, using differences between cross rates (such as EUR/USD, GBP/USD, and EUR/GBP) at different markets.
For example, suppose you had opened the following positions:
buy 1 lot EUR/USD at 1.4867;
sell 1 lot EUR/GBP at 0.7600;
and sell 0.76 lot GBP/USD at 1.9586.
The netting/clearing gives the following results:
Long EUR from the first pair and short EUR from the second pair gives zero exposure in EUR.
Long position in GBP from the second pair and short position from the third pair gives zero exposure in GBP.
Short position from the first pair ($148,670.00) in USD and long position from the third pair ($195,860.00*0.76) in USD gives you $183.60 profit without open positions and exposures.
Simple? Not really for small traders, might be for those “big brothers” only. Because it is really hard to play spread, slippage, stop loss hunting or so on games against brokers.
Carry Trading:
Carry trading is a well known trading strategy which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. Then this investor can make profit from the difference of these two interest rates.
JPY is currently considered to be the most favourite currency to use as the low interest yielding currency in the carry trade, because its interest rate is the lowest of the world nearly at 0. And GBP is currently considered to be the high yielding currency. So are NZD and AUD.
When we purchase these currencies pairs: GBP/JPY, AUD/JPY, GBP/CHF, USD/JPY, or EUR/CHF;
Or sell: EUR/AUD, EUR/GBP, AUD/NZD;
Both actions can yield positive SWAP roll over interest. If combining with some kinds of hedge trading, we can make as high as 100% profit annually and keep the risk low.
The massive risk in a carry trading is the uncertainty of exchange rates. Also, these transactions are generally done with a high leverage, so a small movement in exchange rates can result in massive losses unless hedged appropriately.
Martingale:
Originally, martingale referred to a class of betting strategies favourite in 18th century France. In Forex trading, the strategy let the trader double his/her order lots after each loss, so that the first win would recover all previous losses plus win a profit equal to the original investment. In the example below, you purchased 1 lot EUR/USD at 1.4650. Unfortunately, the rate drops. You play it in martingale way, “double down”, purchase two lots, you need the EUR/USD to rally from 1.4630 to 1.4640 to break even. As the price moves lower and you add four lots, you only need it to rally to 1.4625 instead of 1.4640 to break even. The more lots you add, the lower your average entry price. Even though you might lose 100 pips on the first lot of the EUR/USD if the price hits 1.4550, you only need the currencies pair to rally to 1.4569 to break even on your entire holdings. Once the rate goes up one more pip, you will win a lot.
EUR/USD Lots Average or Breakeven Price
1.4650 1 1.4650
1.4630 2 1.4640
1.4610 4 1.4625
1.4590 8 1.4605
1.4570 16 1.4588
1.4550 32 1.4569
The Martingale strategy needs a very strict money management and you must comprehend that in the beginning money will be coming slowly, but if you lose the patience and raise risk level up to much, you might not hang on to the end to see the turn-around.
Anti-Martingale:
The anti-martingale strategy is the opposite of the superior known martingale approach. This approach instead increases order lots after wins, while reducing them after a loss. Using an anti-martingale risk management scheme will increase profits during time periods when a trading approach is working well, while automatically decreasing exposure during portions of the cycle where trading is unprofitable. This is believed to decrease the risk of ruin for trading.
Grid:
Basically the trader sets a series of entry limit orders X pips from the current price, for example 15 pips. Some experienced traders like to use the Fibonacci Series Numbers (0, 1, 1, 2, 3, 5, 8, 13, …) or Golden Section Numbers to make this grid. Once price hits the level the limit order is executed. Then each 15 pips there is another order at limit price executed. And so on. In a yo-yo market, while the price moves up or down, there always be some limit orders executed. Once the order is taken profit, and the price moves to its original level again, a new limit order shall be executed again, then repeat the same process. Just open orders and take profits in a set of “grid”. It is easy and easy, but hard to deal with when and how to close all orders, especially the Stop Loss. Some experts state we do not need stop loss, but will you take the chance to hold your all positions till “Margin Call?”
Day trading:
This refers to the practice of buying and selling currencies pairs such that all positions will usually be shut within the same Forex the trading day. The day trading intent comes from stock market. Day traders rapidly purchase and sell stocks throughout the day in the hope that their stocks will continue climbing or falling in value for the seconds to minutes they own the stock, allowing them to lock in swift profits. Day trading is extremely risky and can result in substantial financial losses in a very short period of time. Under the rules of NYSE and NASD, customers who are deemed “pattern day traders” must have at least $25,000 in their accounts and can only trade in margin accounts.
But in Forex market, each one can be a day trader to do day trading. Actually, more than day trading, they can do “scalping”.
Scalping:
Scalping is a trading style where small price gaps created by the bid-ask spreads are exploited. It normally involves establishing and liquidating a position quickly, usually within minutes or even seconds. It means trying to get a few points (1~3 pips only, no greed, no long term) off the market each time. This strategy is based on a fact: approximately 70 to 80% of the time, the market is in a consolidation pattern. What this means is that for the majority of time the market is not making significant moves. For example, after the USA market is shut and before the Europe market is open, the Forex market tends to range in a consolidation channel for hours at a time before making another significant move in one direction. This kind of market behavior pattern is saint for Forex scalping. Each time you enter the market, move 10 or 20 minutes, once you have several pips acquire then cash it and go.
Scalping has some features:
1, Lower exposure, lower risks. Scalpers are only exposed in a relatively short period.
2, Smaller moves, easier to obtain. The normal wave of the market will give you several pips easily.
3, Massive volume, adding profits up. Since the profit obtained per share or contract is very small due to its target of spread, they need to trade massive in order to add up the profits. Scalping is not suitable for small-capital traders.
But be careful, not each broker welcomes this kind of scalping strategy. If you scalp it too swift and thin, let’s state you just hit 1 pip each 2 or 3 minutes then run, and repeat it again and again within a day, each day, you must feel high, eh? But the broker might be not happy and bans you. You will be kicked out because of your successful scalping!
Break-Out:
Using the Bollinger Bands indicator on a chart, we will find each Forex currencies pair is waving in a “band”, or a channel. By finding major support and resistance levels with technical analysis, a Break-Out strategy trader will purchase this pair at the lower level of support (bottom of the band/channel) and sell them near resistance (top of the band/channel). Till now there is not a Break-Out yet.
Once the price breaks the upper range line with larger-than-average volume, or the opposite: the price breaks the lower range line with larger-than-average volume, the chance is coming. The intent of this strategy is that when a currencies pair breaks out of the channel, it usually experiences a massive price movement in the direction of the breakout. So purchase it at the price breaks the upper range line and continue to hold it until the rate has risen a distance comparable to the height of the range. If it goes down instead, stop losses as it penetrates the upper range line. Or, sell it at the price breaks the lower range line, and continue to hold it until the rate has fallen a distance comparable to the height of the range. If it goes up instead, stop losses as it penetrates the lower range line.
Pivot:
Besides Support and Resistance levels, many foreign exchange traders like to use another indicator to examine and predict currency pairs’ price changes, it is so-called: the Pivot Point. To compute and examine pivot is a subset of technical analysis, with this bench mark, traders can locate the rotation point of the trend, and this is very helpful for deciding when and where to purchase or sell.
Classical Pivot Point, Support and Resistance Formulas are as follows:
Look at any one chart, the pivot is an average of the previous bar’s high, low, and closing prices. In the following formula, “H” represents the previous bar’s high, “L” represents the previous bar’s low, and “C” represents the previous bar’s closing price.
Current Bar’s Pivot Point (P)=Previous Bar’s (H+L+C)/3
First level of support and resistance can be calculated as follows:
First Resistance Level (R1)=(2*P)-L
First Support Level (S1)=(2*P)-H
Likewise, the second level of support and resistance:
Second Resistance Level (R2)=P+(R1-S1)
Second Support Level (S2)=P-(R1-S1)
Since many currency pairs tend to fluctuate between Support and Resistance levels, and these levels are calculated based on Pivot points, so when a trend or breakout trader knows where the pivot point is, it will enable him/her to find out key levels that need to be broken for a move to remember as a breakout.
News Trading:
The system is developed based on economic news events from around the world. Almost half of those announcements have moved the market significantly. Before a massive news is coming, we can purchase and sell some currencies pairs at the same time, same lots, set stop loss prices for them. After the news is released, especially for the massive one, both sides of purchase order and sell order will jump significantly. No matter which order is a winner, just let it go. And the loser will hit the Stop Loss, just let it be. The winner’s acquire minus the loser’s loss, it is your news trading profit. For example, Non-Farm Payrolls/Employment Report – The NFP is the most influential news release of each month. It’s announced on the first Friday of the month at 8:30am EST for the prior month. We can place a purchase order and a sell order at market prices for GBP/USD, at 8:29 am EST. Don’t forget, set 30 pips Stop Loss level for them. Wait 2 minutes only, the news is announced, it is a massive one! Then the sell order jumps over 100 pips, and the purchase order drops like a brick. The brick hits the Stop Loss and the pain is over. Totally, your acquire could be 100-30=70 pips. Swift and easy, cool enough?
Trend Following:
It is so simple, just follow the trend. Purchase it is the most difficult strategy because no one can tell you 100% for sure what is the right TREND. Go to look at a weekly chat of USD/CAD, if you had shorted this pair in September 2001 and held it till September 2007, you know what the trend means.
The most famous trend analysis tool seems the Wave Principle. In the 1930s, Ralph Nelson Elliott discovered that stock market prices trend and reverse in recognizable patterns. Elliott isolated five such patterns, or “waves,” that recur in market price data.
Another trend analysis guru should be W. D. Gann. In 1908, Gann discovered what he called the “market time factor”, which made him one of the pioneers of technical analysis. To test his new strategy, he opened one statement with $300 and one with $150. It turned out to be wildly successful: Gann was healthy to make $25,000 profit with his $300 statement in only three months; meanwhile, he made $12,000 profit with his $150 statement in only 30 days! After his results were verified, he became famous on Wall Street as one of the saint forecasters of all time.
Back to the chat of USD/CAD, now, please tell me, how to follow the trend? Will USD/CAD continue the trend which is going south further to 0.6000, or, another trend going north reversely back to 1.6000?
