Forex trading strategy with AUD/USD release Feb 28,2014
Sell stop : 0.8933
Stop loss: 0.8980
Take Profit: 0.8820
forex trading business
Sell stop : 0.8933
Stop loss: 0.8980
Take Profit: 0.8820
forex trading business
Thursday, March 31, 2016
Isnt hassle free profit from the forex market all we want ? Definitely the goal of every person that starts to look for an expert advisor - or most at least - is to find a trading system they can simply "set and forget", a trading system that just collects money from the market in a consistent manner with minimal or limited draw down. A "holy grail", so to speak. However, it becomes obvious after a while of being in this business that if it is too good to be true it probably is and that no trading system can provide the owner with profit without an effort to develop knowledge and understanding. However the fact that the other road seems plausible makes a lot of people continue to search for this nonexistent trading system, a quest that brings nothing but disappointment and financial loss for most new traders. On todays post I will be giving you a logic based demonstration that shows why easy profit in automated trading is impossible and why this search is meaningless and will never arrive at your intended result (a system that easily gets you money without any effort).
First of all we must understand the very basic aspects about logic based demonstrations. When we are faced with a given hypothesis there are several ways in which it can be demonstrated to be true. In mathematics this is done in several ways but one of them is of particular interest to my article. You can demonstrate that something is false if the assumption that it is true leads to absurd results. For example, let us test the hypothesis that the addition of two even numbers gives us an odd number (which is false).
Assuming this to be true :
n, m and k are integers (2n is the definition of an even number, 2k+1, the definition of an odd one)
2n+2m = 2k+1
2n+2m-2k = 1 subtract 2k from both sides
2(n+m-k) = 1 factor 2 out
2a = 1 since n, m and -k are integers their addition is another integer (a)
Since 2a is an even number by definition and it is said to be equal to 1, we have an absurd result. No integer times 2 is able to give us 1 as a result. The hypothesis has been proved false because the assumptions that it is true leads to absurd results.
When it comes to making money from a system without any effort we can do the exact same thing. Let us suppose that there is a system that generates a 200% yearly income which can be traded from 100 USD and used successfully by anyone who buys it. Looking into the sales of the most popular experts we could expect this system to be used by at least 30K people during the first 2 years. This means that 300K USD - assuming each person trades the minimum - will be traded within the first 2 years. After ten years the return of this system would have been 17714700000 which is around 17 billion which is above all other market participants for this same time period. If 300K USD were added each year (of course new sales), the results would be even more staggering nearing more than 100 billion USD.
After 20 years, results become even more absurd and the system is now making a return that would be equal to more than the volume available to be traded. That is, all other market participants would be losing money against this system. This reduces the result to absurd levels since the systems profits surpass the amount of money available from the market. In fact, all the money in the world roughly describes what this system would be making.
The conclusions of this thought experiment are therefore quite simple and straightforward. One of the following things must be true :
First of all we must understand the very basic aspects about logic based demonstrations. When we are faced with a given hypothesis there are several ways in which it can be demonstrated to be true. In mathematics this is done in several ways but one of them is of particular interest to my article. You can demonstrate that something is false if the assumption that it is true leads to absurd results. For example, let us test the hypothesis that the addition of two even numbers gives us an odd number (which is false).
Assuming this to be true :
n, m and k are integers (2n is the definition of an even number, 2k+1, the definition of an odd one)
2n+2m = 2k+1
2n+2m-2k = 1 subtract 2k from both sides
2(n+m-k) = 1 factor 2 out
2a = 1 since n, m and -k are integers their addition is another integer (a)
Since 2a is an even number by definition and it is said to be equal to 1, we have an absurd result. No integer times 2 is able to give us 1 as a result. The hypothesis has been proved false because the assumptions that it is true leads to absurd results.
When it comes to making money from a system without any effort we can do the exact same thing. Let us suppose that there is a system that generates a 200% yearly income which can be traded from 100 USD and used successfully by anyone who buys it. Looking into the sales of the most popular experts we could expect this system to be used by at least 30K people during the first 2 years. This means that 300K USD - assuming each person trades the minimum - will be traded within the first 2 years. After ten years the return of this system would have been 17714700000 which is around 17 billion which is above all other market participants for this same time period. If 300K USD were added each year (of course new sales), the results would be even more staggering nearing more than 100 billion USD.
After 20 years, results become even more absurd and the system is now making a return that would be equal to more than the volume available to be traded. That is, all other market participants would be losing money against this system. This reduces the result to absurd levels since the systems profits surpass the amount of money available from the market. In fact, all the money in the world roughly describes what this system would be making.
The conclusions of this thought experiment are therefore quite simple and straightforward. One of the following things must be true :
- If a successful system exists that anyone can trade then there is an inherent - and quite small - volume limitation to its trading that will thereafter make it lose its profitability or its "tradable by anyone" character.
- If a successful mechanical system exists then there must be strong psychological barriers that make it extremely hard to trade for most market participants
- If a successful mechanical system exists then there is bound to be a maximum compounded yearly profit to maximum draw down limitation that forbids it from reaching the above scenario (a limitation on profits).
Through all my research and work I have found that it is certainly possible to have successful mechanical trading systems and I suspect all the above are in fact true statements. Systems that would be easily available for anyone to use would quickly lose this character as a function of volume and become hard to trade for some reason (psychological, increases in the maximum draw down to average compounded yearly profit ratio) and systems that are already successful are bound to be hard to trade or have an inherent profitability limitation that does not allow them to reach the above mentioned scenario.
In the end, logic is simply undeniable. The scenario portrayed before is an absurd outcome that cannot be reached and therefore limitations to its achievement must be contained within the systems themselves. Systems that may seem to show extremely high results must be volume limited and later become much less profitable and harder to trade while mechanical systems that are profitable in the long term are hard to trade by definition. The above logical reasoning also shows us that there is bound to be some form of profitability to draw down limitation which comes from the simple assumption that the above scenario must be avoided. In conclusion, there is simply no easy long term profit in automated trading.
As you see, the simple power of the "reduction to absurdity" logical reasoning allows us to gain a lot of information about the world of automated trading systems merely by the use of a very simple thought experiment. If you have any comments, suggestions, opinions or other similar reasoning exercises, please feel free to leave a comment !
If you would like to learn more about my journey in automated trading and gain a true education around this type of systems, their uses, limitations and possibilities please consider joining Asirikuy.com, a website filled with educational videos, trading systems, development and a sound, honest and transparent approach to trading systems. I hope you enjoyed this article ! :o)
In the end, logic is simply undeniable. The scenario portrayed before is an absurd outcome that cannot be reached and therefore limitations to its achievement must be contained within the systems themselves. Systems that may seem to show extremely high results must be volume limited and later become much less profitable and harder to trade while mechanical systems that are profitable in the long term are hard to trade by definition. The above logical reasoning also shows us that there is bound to be some form of profitability to draw down limitation which comes from the simple assumption that the above scenario must be avoided. In conclusion, there is simply no easy long term profit in automated trading.
As you see, the simple power of the "reduction to absurdity" logical reasoning allows us to gain a lot of information about the world of automated trading systems merely by the use of a very simple thought experiment. If you have any comments, suggestions, opinions or other similar reasoning exercises, please feel free to leave a comment !
If you would like to learn more about my journey in automated trading and gain a true education around this type of systems, their uses, limitations and possibilities please consider joining Asirikuy.com, a website filled with educational videos, trading systems, development and a sound, honest and transparent approach to trading systems. I hope you enjoyed this article ! :o)
forex trading fundamentals
Wednesday, March 30, 2016
Market Analysis of the 31st of August 2015 : Opportunities on EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, XAU/USD, EUR/JPY, USD/CAD & NZD/USD D1, H4 & H1
Click on the Menu on "Market Analysis" for all the analysis.
GBP/USD: Nice break down, price has cleared some levels, we can look for shorts but with prudence.
USD/JPY: Huge move down followed by a pull back, new wave 3 down, we can look for shorts.
USD/CHF: Chart is still sideways. Price inside the alligator, be patient.
AUD/USD: New push of the wave 3 down, we can look for shorts.
EUR/JPY: Price has broken the lower level of the box but it looks like wave 4. Be patient.
USD/CAD: Still wave 3 up with a price above the alligator, we can still buy this pair.
NZD/USD: New push of the wave 3 down, we can look for shorts.
USD/JPY: Huge move down followed by a pull back, new wave 3 down, we can look for shorts.
USD/CHF: Chart is still sideways. Price inside the alligator, be patient.
AUD/USD: New push of the wave 3 down, we can look for shorts.
EUR/JPY: Price has broken the lower level of the box but it looks like wave 4. Be patient.
USD/CAD: Still wave 3 up with a price above the alligator, we can still buy this pair.
NZD/USD: New push of the wave 3 down, we can look for shorts.
XAU/USD: Price is coming back inside the alligator after this small wave 3 up, overall downtrend, be patient.
For orientation/direction of trades, click "Signals" in the menu (from Monday 31st of August from 8:00 GMT+1)
For orientation/direction of trades, click "Signals" in the menu (from Monday 31st of August from 8:00 GMT+1)
forex trading rates
Perhaps the most difficult aspect of forex trading is the fact that loses happen and they constitute a vital and necessary aspect of the trading experience. During various posts I have talked about the nature of loses in forex trading, their origin and their need as limiting factors of the massive exploitation of mechanical trading strategies. Today I want to talk to you about a more personal aspect of loses and the way in which I deal with draw downs as a vital part of my career as a trader who lives from the performance of his trading strategies. I will talk about the ways in which I have dealt with draw down in the past, the plan I have laid out and how this plan comes to life in reality when that creepy monster known as a deep-long draw down period shows his sharp teeth around the corner.
Truth be told, I have never been good at dealing with loses. Perhaps it is because I am an emotional man or because I sometimes view my success through my trades but I have always dreaded and hated losing periods. Of course, I am just a human being and losing is not easy for anyone and it especially didnt feel easy for me. When I began trading I used to take a serious emotional blow every time I faced a draw down period. I didnt react by getting angry, I actually got depressed and frustrated as I saw how my money started to evaporate from previously profitable accounts. The emotion filled trading that followed only led to deeper draw downs and to even deeper feelings of anguish as more and bigger loses appeared.
-
-After developing my core knowledge about the market and going through the extensive process detailed through a good portion of this blog, I became much more conscious about the nature of draw down periods and I realized that they are THERE and that they are necessary for the trading of profitable systems. It actually comes down to a very simple concept, without the draw downs there simply wouldnt be long term profitable systems because the market wouldnt be able to discourage their trading through the cycle I detailed a few posts ago.
However one thing is to know that you will face a 250 day long 20% deep draw down period and another thing is to take your account ( or even emotionally worse, your managed accounts) through this psychological journey. The first time I faced the draw down monster I almost had a heart attack. I traded the Gods Gift ATR through a break-even/losing period of several months before a new equity high was reached. I was happy that I followed my plan and that I reached my profit target and I was even more happy about having defeated my own inner challenge of draw down survival. Understanding played an ESSENTIAL role here as I would have never done this without fully knowing what I was getting into. Definitely this is one of the main reasons why I consider understanding an absolute requirement for success in automated trading, at least for me it was.
Now after some time of achieving this ideal status where living from automated trading is a reality (and hopefully it will remain this way :o) !!) , I have a clear plan to deal with draw down periods and with my profit levels so that I can sustain the expected and worst-case scenarios of all the accounts I trade and manage without risking my living style. My plan has the following simple outline :
- Keep enough savings to live at least for 1 year without ANY income
- Always respect the worst case draw down scenario
- Always evaluate the extent and depth of draw down periods against the historical standards
- Keep living standards at 50% of expected profit level
- On every month, spend at most 50% of income, invest 25% (forex), invest 25% (other)
As you see my plan attempts to attack possible bad scenarios by making sure that I spend less than what I make, reinvest part of my income and diversify my investments. I always apply the Asirikuy mantra (understand, expect and evaluate) and I keep in mind that past performance does not guarantee future results and that certainly the worst case - even if unlikely - may develop. It is clear that every long or deep (or both !!) draw down period on any system is a challenge and the success or failure of a trader depends on how this challenge is tackled. If you tackle it with emotions and improvisation you will get financial ruin while if you tackle it with understanding and planning you will be able to make it to the other side.
As a person who is fully dedicated to the field of automated trading I can tell you that - for me - the hardest part of trading Asirikuy systems is the psychological pressure that draw down periods bring, a pressure that is always existent but that I become better at handling as I develop a better understanding of my automated trading systems, their draw down periods and the foreign exchange market.
If you would like to know more about my journey in automated trading and how you too can design your own likely long term profitable automated trading strategies please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
As a person who is fully dedicated to the field of automated trading I can tell you that - for me - the hardest part of trading Asirikuy systems is the psychological pressure that draw down periods bring, a pressure that is always existent but that I become better at handling as I develop a better understanding of my automated trading systems, their draw down periods and the foreign exchange market.
If you would like to know more about my journey in automated trading and how you too can design your own likely long term profitable automated trading strategies please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
forex trading ira
When I started my journey in automated trading it was only a while before I asked myself a very important question : Why doesnt everyone live from automated trading if it is so profitable ? I bet many of you have asked yourselves the same question and you havent found any answer that clearly tells you why every average Joe out there who knows about expert advisors isnt living from them. I used to have several long discussion with fellow traders and their usual answer - before I started living from these systems - was "they just dont work". Clearly simple, if the systems do not work, then nobody can live from them, end of story.
However, upon a closer inspection of how the successful systems I know work and their trading characteristics I have come to a set of conclusions that show us why - even if everybody knew them and traded them - only a few people could ever be succesful using them. On todays post I will discuss the five main ways the market protects itself from the massive exploitation of mechanical systems giving you an idea of what you are getting into if you want to achieve long term profits with expert advisors.
1. Profitable systems have long draw down periods. One of the things that I think makes the massive exploitation of long term profitable systems likely impossible is the fact that draw down periods of profitable systems are extremely long and very hard to endure for most people. If you dont understand what the system does and you have been in draw down for 300 days, then common sense would dictate you stop trading the system. When people trade something they dont understand they easily fall prey to fear while if they attempt to have "faith" on the system they will get their accounts wiped if the system stops working.
2. Worst historical draw downs always get worse. Another very important aspect is the fact that the market will show you a darker side of its face as time evolves. I have seen many people trade systems with high risk levels saying "in a 10 years backtest its maximum draw down was 60%, so Ill be fine". This is a big mistake. The worst performing point in the past does not forecast the worst point in the future. A system may go into a deeper draw down in the future and if your risk measurements dont take a deeper draw down into account the systems future regular profit/draw down oscillations will take you out.
3. Long term profitable systems are unattractive. People generally look for systems that show short term results, high profit rates and high recoveries from loses and therefore long term profitable systems simply fail to attract people. If you were selling these systems probably only a bunch of people would ever buy them and this is because their profit targets are not very high and their draw down periods are long and their draw downs deep. So in the end people are simply not attracted to these systems and prefer to trade much more dangerous systems.
4. They give back. I think that a very good reason why people dont like long term profitable systems is because they have a strong tendency to give back profits a significant amount of the time. The turtle trading system can have a 1800 pip profit and come out with a 200 pip loss. Most people will get angry, wont understand this and will run away from the system saying that it doesnt work. They simply do not understand the reason why this "giving back" happens and why it is done to preserve the probability to achieve a trading systems potential.
5. True understanding is needed. Due to all the above reasons, the chief protection of the market against the massive exploitation of mechanically tradable inefficiencies is the fact that a true understanding of the systems is necessary. If you set and forget you will fail due to the above reasons. You will probably get out on a predicted draw down cycle, modify the system eternally to try to make it "avoid giving back" or you may just attempt to trade the system on blind faith and wipe your account when the system has simply become too risky to be traded.
After I realized the truth behind all the above reasons, the design and trading of long term profitable systems became much easier. In the end the most important thing is to know exactly what the system is doing, why it is bound to work, how it works under varied market conditions and why and when the system is bound to make profitable trades. It is extremely important to know the long term statistical characteristics of the trading systems and to constantly evaluate the performance of the strategies against what you learn from previous live trading and simulations. In the end few people will be able to achieve the understanding needed to defeat the market at its own game. Hopefully youll be one of them :o)
If you would like to learn more about automated trading and how you too can design and trade your own long term profitable systems please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
However, upon a closer inspection of how the successful systems I know work and their trading characteristics I have come to a set of conclusions that show us why - even if everybody knew them and traded them - only a few people could ever be succesful using them. On todays post I will discuss the five main ways the market protects itself from the massive exploitation of mechanical systems giving you an idea of what you are getting into if you want to achieve long term profits with expert advisors.
1. Profitable systems have long draw down periods. One of the things that I think makes the massive exploitation of long term profitable systems likely impossible is the fact that draw down periods of profitable systems are extremely long and very hard to endure for most people. If you dont understand what the system does and you have been in draw down for 300 days, then common sense would dictate you stop trading the system. When people trade something they dont understand they easily fall prey to fear while if they attempt to have "faith" on the system they will get their accounts wiped if the system stops working.
2. Worst historical draw downs always get worse. Another very important aspect is the fact that the market will show you a darker side of its face as time evolves. I have seen many people trade systems with high risk levels saying "in a 10 years backtest its maximum draw down was 60%, so Ill be fine". This is a big mistake. The worst performing point in the past does not forecast the worst point in the future. A system may go into a deeper draw down in the future and if your risk measurements dont take a deeper draw down into account the systems future regular profit/draw down oscillations will take you out.
3. Long term profitable systems are unattractive. People generally look for systems that show short term results, high profit rates and high recoveries from loses and therefore long term profitable systems simply fail to attract people. If you were selling these systems probably only a bunch of people would ever buy them and this is because their profit targets are not very high and their draw down periods are long and their draw downs deep. So in the end people are simply not attracted to these systems and prefer to trade much more dangerous systems.
4. They give back. I think that a very good reason why people dont like long term profitable systems is because they have a strong tendency to give back profits a significant amount of the time. The turtle trading system can have a 1800 pip profit and come out with a 200 pip loss. Most people will get angry, wont understand this and will run away from the system saying that it doesnt work. They simply do not understand the reason why this "giving back" happens and why it is done to preserve the probability to achieve a trading systems potential.
5. True understanding is needed. Due to all the above reasons, the chief protection of the market against the massive exploitation of mechanically tradable inefficiencies is the fact that a true understanding of the systems is necessary. If you set and forget you will fail due to the above reasons. You will probably get out on a predicted draw down cycle, modify the system eternally to try to make it "avoid giving back" or you may just attempt to trade the system on blind faith and wipe your account when the system has simply become too risky to be traded.
After I realized the truth behind all the above reasons, the design and trading of long term profitable systems became much easier. In the end the most important thing is to know exactly what the system is doing, why it is bound to work, how it works under varied market conditions and why and when the system is bound to make profitable trades. It is extremely important to know the long term statistical characteristics of the trading systems and to constantly evaluate the performance of the strategies against what you learn from previous live trading and simulations. In the end few people will be able to achieve the understanding needed to defeat the market at its own game. Hopefully youll be one of them :o)
If you would like to learn more about automated trading and how you too can design and trade your own long term profitable systems please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
forex trading keyboard
This video is my gold trading strategy released February 4, 2015. I predict gold prices will fall in the medium term - target 1238 USD/oz. Trading strategy as follows:
Sell limit: 1265 or 1269.50
Stop loss: 1274.80
Take Profit: 1245.50 or 1238.30.
As a result I predicted correctly.
Watch the video below to see I have predicted how.
forex trading tutorial
Sell limit: 1265 or 1269.50
Stop loss: 1274.80
Take Profit: 1245.50 or 1238.30.
As a result I predicted correctly.
Watch the video below to see I have predicted how.
forex trading tutorial
Trade of the week: USD/CHF H1: 8-10 December: +8% Profit (+240 pips)
For more details and examples of trade, click "Examples of Trade" in the menu
We had a huge wave 3 and we expect now the wave 5. On the 8th of december, at Francfort Open, we have a setup, sleeping alligator and tight box (25 pips), we place a pending order which is triggered, the price is going down slowly forming a new box and we place another pending order (initial stop loss: 35 pisp). The order is triggered and the prices is going down progressively, we exit on the 10th as the prices breaks the upper level of the fractal box for a profit of +130 pips (1st entry) and +110 pips (addon) which makes +240 pips and a profit of +8%. What a terrific classical trade!
For more details and examples of trade, click "Examples of Trade" in the menu
We had a huge wave 3 and we expect now the wave 5. On the 8th of december, at Francfort Open, we have a setup, sleeping alligator and tight box (25 pips), we place a pending order which is triggered, the price is going down slowly forming a new box and we place another pending order (initial stop loss: 35 pisp). The order is triggered and the prices is going down progressively, we exit on the 10th as the prices breaks the upper level of the fractal box for a profit of +130 pips (1st entry) and +110 pips (addon) which makes +240 pips and a profit of +8%. What a terrific classical trade!
forex trader qualifications
Tuesday, March 29, 2016
A few weeks ago I gave my almost one year old ebook a new read-through to check the validity and relevance of its content and to see if there were any improvements I could do. After reading the ebook and looking at how my vision through last year has evolved I realized that many changes and additions are due. Although the contents of the ebook right now are very valid and do point traders in the right direction in automated trading I feel that a lot of depth - particularly pertaining to system design - is currently missing from its contents. Of course, there is also the fact that the ebook is missing the last 2 experts from the Watukushay series, something that also must be added if the ebook is bound to keep up with this - seemingly ever-evolving - project. On todays post I want to talk to you about the ebooks future, the changes that will happen within the next few months and what I expect from all this evolution.
The first thing that will be certain is that the ebook will no longer be offered by itself. Through the past few months I have been giving this a lot of thought and I believe that the ebook does a better job at helping traders as part of the overall Asirikuy package. So from the next update, the ebook will be only available within Asirikuy. Of course, previous ebook customers will keep on getting the update but the option to buy the ebook by itself will completely disappear from this website. I believe that this is the way to go since it will allow people to have a "full view" of everything and to get a complete education in automated trading. I hope I will be able to create much more synergy between the ebooks contents and Asirikuy within the next release.
Regarding the contents, I believe that the current version leaves a lot of spaces open that need to be addressed. I reviewed the ebook with a friend who has some basic knowledge regarding automated trading and forex in general and he was a little bit overwhelmed by the amount of content and the ideas within some sections which required a good amount of time to assimilate. It took him a lot of time to follow many of the tutorials but -in the end- he was able to reproduce the Watukushay experts and their analysis on his own. I believe that a lot can be done to improve the teaching of coding within the ebook and a lot of emphasis in initial system development is also missing.
Perhaps one of the most important additions I plan to do is a whole section on mathematical exepctancy analysis which will provide people with some tools and tutorials to guide them through the first - and often the most critical - parts of system development. I will try to teach how to device an initial trading logic and an approach to trading, focusing on systematic building and the analysis of mathematical exepctancy using the EA I created for this purpose within Asirikuy. I think that with these and a few more changes, the ebook will be able to improve on its current state and better help traders achieve their goals to become long term profitable traders using automated trading systems.
I want the ebook to be the introductory and main piece of Asirikuy, a "tome of knowledge" so to speak, that gathers all my basic concepts in automated trading coupled with a lot of practical exercises, tutorials and guides to bring someone from "I dont have any idea" to "I have coded my first likely profitable trading system using my own ideas and analysis". Do you have any ideas about what the ebook should be ? Do you want to suggest any content additions ? reductions ? changes, etc ? What would you like to find in the ebook ? Please leave a comment :o)
It is difficult to say right now when this "major update" will be out, but probably I will be releasing it sometime before Aug 07. If you would like to learn more about the ebook and my journey in automated trading please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
The first thing that will be certain is that the ebook will no longer be offered by itself. Through the past few months I have been giving this a lot of thought and I believe that the ebook does a better job at helping traders as part of the overall Asirikuy package. So from the next update, the ebook will be only available within Asirikuy. Of course, previous ebook customers will keep on getting the update but the option to buy the ebook by itself will completely disappear from this website. I believe that this is the way to go since it will allow people to have a "full view" of everything and to get a complete education in automated trading. I hope I will be able to create much more synergy between the ebooks contents and Asirikuy within the next release.
Regarding the contents, I believe that the current version leaves a lot of spaces open that need to be addressed. I reviewed the ebook with a friend who has some basic knowledge regarding automated trading and forex in general and he was a little bit overwhelmed by the amount of content and the ideas within some sections which required a good amount of time to assimilate. It took him a lot of time to follow many of the tutorials but -in the end- he was able to reproduce the Watukushay experts and their analysis on his own. I believe that a lot can be done to improve the teaching of coding within the ebook and a lot of emphasis in initial system development is also missing.
Perhaps one of the most important additions I plan to do is a whole section on mathematical exepctancy analysis which will provide people with some tools and tutorials to guide them through the first - and often the most critical - parts of system development. I will try to teach how to device an initial trading logic and an approach to trading, focusing on systematic building and the analysis of mathematical exepctancy using the EA I created for this purpose within Asirikuy. I think that with these and a few more changes, the ebook will be able to improve on its current state and better help traders achieve their goals to become long term profitable traders using automated trading systems.
I want the ebook to be the introductory and main piece of Asirikuy, a "tome of knowledge" so to speak, that gathers all my basic concepts in automated trading coupled with a lot of practical exercises, tutorials and guides to bring someone from "I dont have any idea" to "I have coded my first likely profitable trading system using my own ideas and analysis". Do you have any ideas about what the ebook should be ? Do you want to suggest any content additions ? reductions ? changes, etc ? What would you like to find in the ebook ? Please leave a comment :o)
It is difficult to say right now when this "major update" will be out, but probably I will be releasing it sometime before Aug 07. If you would like to learn more about the ebook and my journey in automated trading please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
forex trading income tax
It is the magic of Elliott Wave Theory .
What is the price of gold has completed waves 3 of rally .
I am waiting for gold prices to adjust somewhere around 38.2 Fibonaci , corresponding rates in price 1390 usd/oz .
I will implement the campaign buy at that price with 5% account .
The limit my losses are prices 1370 usd/oz !
If my comments properly, I will continue to buy at a price of 1410 usd/ oz - 10% account .
The goal of our expectations that the price of gold will reach 1460 usd / oz.
I still expect a higher price is 1557 usd / oz by the end of this year !
forex trading certification
What is the price of gold has completed waves 3 of rally .
I am waiting for gold prices to adjust somewhere around 38.2 Fibonaci , corresponding rates in price 1390 usd/oz .
I will implement the campaign buy at that price with 5% account .
The limit my losses are prices 1370 usd/oz !
If my comments properly, I will continue to buy at a price of 1410 usd/ oz - 10% account .
The goal of our expectations that the price of gold will reach 1460 usd / oz.
I still expect a higher price is 1557 usd / oz by the end of this year !
forex trading certification
H4 Bollinger Band Strategy
Tools : Bollinger Bands(20)
TimeFrame : H4
Currency : ALL
This strategy is extremely simple and I use it to detect opportunities and it is very good.
If you open an H4 EUR/JPY chart and you insert the Bollinger Bands(20) indicator, if you observe the chart you will see that the bands are simply a Resistance and Support. The Upper band is a Resistance and the Lower Band is a Support. If you pay attention to the chart you will see that most of time the price hit the upper band then it retraces back to Lower Band, so how I trade is very easy, I wait till the price touches let’s say the upper band and closes under it (not above it) and wait till the candle is formed, when it finishes and the next candle opens under the previous Upper band then I enter a Short trade with target = 100 pips or until it touches the Lower Band.
Same thing when it touches the Lower band and the candle closes above it, and the next candle opens above the previous Lower Band then I go Long with Target = Upper band or 100 pips. You can develop this strategy as I did, and you can profit a lot, I made more than 800 pips this month.
You can check my website for any further help http://rpchost.com . If you think in this technique and observe the chart I am sure you will develop this strategy quickly and make 99% winning trades.
H4 Bollinger Band Strategy (Part II)
Tools : Bollinger Band(20)
TimeFrame : H4
Currency : ANY
This strategy is a continuation of the previous strategy I submitted before (Forex trading strategy #22 ).
This strategy is very simple, and you can find more details at Rpchost.com forex forum.
First open a currency (per example EUR/USD) and H4 timeframe, issue suitable breaklines from the bollinger band (visual examples are at rpchost.com forex forum), now wait till a candle breaks the breakLine. This break is not a trade signal we must have an extra confirmation, here come the role of the bollinger band.look at the bollinger band upper and lower, if they are both opened which means upper band is UP and lower band is DOWN, then it is a confimation of a trade.
Source: forex-strategies-revealed
forex trading demo account review
If you have been following my blog for a while you might be aware of the Watukushay project, an initiative which gathers my efforts around the well-documented development of likely long term profitable systems. The last EA of this series was Teyacanani and today I am happy to introduce the next member of this family of what I think are well-crafted, sound trading systems with reliable simulations and very good possibilities of achieving long term profitability in forex trading. On todays post I am going to talk to you about Watukushay No.5, its first achievements and what makes the release of this EA different from the others as its development from now on will be done in conjunction with the Asirikuy community :o). I will first share with you the main aspects of the experts trading character as well as the first results on the EUR/USD and the great potential I think this EA holds.
To tell you the truth, it was not easy to come up with a release candidate for Watukushay No.5. I have been developing and evaluating systems none stop and - as a matter of fact - this has led to the finding of some very interesting trading techniques which have shown likely long term profitable results in 10 year backtests with acceptable trading characteristics. I have shared with you some of these developments such as the Bollinger Band strategy I wrote a blog post about a few weeks ago.
However I didnt feel any of these tactics were suitable for Watukushay No.5 since none of them had the multiple instrument potential I wanted for the next Asirikuy trading system. With the achievements of Teyacanani in mind, I decided that I wanted to create a system that could achieve good trading characteristics on several currency pairs and which had enough flexibility to exploit various types of inefficiencies with a simple change of settings. After a lot of searching and a lot of evaluation (and a fortunate email from an Asirikuy member who reminded me of some previous work) I have found a trading method that will be the core of Watukushay No.5.
This new Asirikuy EA is a daily breakout system that looks for trading opportunities everyday based on certain price ranges or "boxes" that may develop. The expert advisor looks at a specific period of time and sets pending orders if the characteristics of the ranging periods are adequate. As Kutichiy (Watukushay No.3), this EA uses an entirely adaptive technique which fits all the characteristics of the EA as multiples of the assigned range. It is interesting to see how many inefficiencies can be found through the trading of breakouts of consolidation periods and how these consolidation periods turn out many times to be non-conventional. The image below shows you a sample of a favorable trade of Watukushay No.5.
-
-
I have worked a lot on this EA and I have already found several long term exploitable inefficiencies based on such breakouts. Trading on the EUR/USD, this EA is able to achieve results as good as those of Watukushay No.2, however the great thing about this EA is not its mere ability to profit from this currency pair but its more "universal" character. With the flexibility to change the breakout character, the characteristics of the box, the take profit, buffer and the actual trading or "fading" of the breakouts Watukushay No.5 is fit to trade a broad range of possible inefficiencies on several different instruments. Since this breakout system is very different and much more flexible than Kutichiy its potential for portfolio trading is MUCH higher.
Perhaps the largest difference between the release of Watukushay No.5 and the rest of the Watukushay expert advisors is that I released this EA at a somewhat early stage of development. My objective with this is to encourage the participation of the Asirikuy community so that new inefficiencies on other currency pairs can be found and a large scale analysis and coarse optimization of the trading system on many currency pairs can be done. Watukushay No.5 is not yet ready for live trading but it is still within what I would like to call an "Asirikuy community Beta" in which I hope members on the website can team to analyze the EA and use it to find trading tactics to trade a wide variety of currency pairs. (below a EUR/USD backtest from Jan 2000 to Jan 2010)
-
-The great thing about the EA is that it can be fit to test extremely different tactics on many different currency pairs, it can be used to trade Asian session breakouts on the GBP/USD or it can be used to fade breakouts of the European session on the EUR/CHF, etc. The trading system has incredible flexibility and it has the possibility to take profit from a large variety of market situations that may show to constitute long term inefficiencies. Of course, I also expect we can add some additional closing mechanisms if our analysis within the next few months demonstrates that such additions would prove to be improvements to the experts logic.
Right now I have great expectations for this EA which has already shown its potential to achieve good profit and draw down targets on a few currency pairs. Will we be able to join as a community and evaluate and examine this trading system ? Will new and exciting ways of trading daily breakouts arise from the forum ? Right now the results of this trading system already point to its future outcome as a strong Asirikuy system and certainly I believe that the Asirikuy community forum approach will only make it better.
As for the name... We will be making a poll in the forum and we will name it when the first live account comes out :o)
If you would like to learn more about the Watukushay project and how it seeks to develop trading systems with sound trading techniques and realistic profit and risk targets please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
forex trading hours cst
Market Analysis of the 11th of January 2016 : Opportunities on EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, XAU/USD, EUR/JPY, USD/CAD & NZD/USD D1, H4 & H1
Click on the Menu on "Market Analysis" for all the analysis.
Daily Charts: Most of the paires have a clear trend
EUR/USD: We have no trend, be patient.
GBP/USD: Impulsive wave down, look for short.
USD/JPY: Impulsive wave down (wave 5?), look for short.
USD/CHF: We have no trend, be patient.
AUD/USD: Impulsive wave down (probably wave 5), look for short.
EUR/JPY: Impulsive wave down, look for short.
USD/CAD: The wave 5 became a new wave 3 up, go for longs.
NZD/USD: The price has broken the sell fractal and we are far below the box, maybe start of wave 5, the ewave is crossing the zero line so look for short.
XAU/USD: The corrective wave has broken the buy fractal and few levels on the left, maybe confirmation of a new wave up, look for long.
Click on the Menu on "Market Analysis" for all the analysis.
Daily Charts: Most of the paires have a clear trend
USD/JPY: Impulsive wave down (wave 5?), look for short.
USD/CHF: We have no trend, be patient.
AUD/USD: Impulsive wave down (probably wave 5), look for short.
EUR/JPY: Impulsive wave down, look for short.
USD/CAD: The wave 5 became a new wave 3 up, go for longs.
NZD/USD: The price has broken the sell fractal and we are far below the box, maybe start of wave 5, the ewave is crossing the zero line so look for short.
XAU/USD: The corrective wave has broken the buy fractal and few levels on the left, maybe confirmation of a new wave up, look for long.
For orientation/direction of trades, click "Signals" in the menu (On Monday 11th of January from 8:00 GMT+1)
forex trading questions answers
Very Simple system - simply look for 1 of 2 candle formations at or near the bollinger band (in this case the default 20)
Things to note. On the larger moves, the price WILL retrace. Best thing to do in this situation is when you see this happen (typically 1 or 2 candles in the opposing direction) simply close the trade and re-enter when the price has returned to the point where the change started. as for exit strategy - a lot of the time you can count on approx 2 - 3 times the value of the retracement (e.g. if the price retraces 10 pips, then you are looking on the re-entered trade of a TP between 20 - 30 pips!
Source: forex-strategies-revealed
You are looking for either 3 consecutive bulish candles for a buy, 3 consecutive bearish candles for a sell - thats it!!! - 3 white soldiers / 3 black crows formations
Things to note. On the larger moves, the price WILL retrace. Best thing to do in this situation is when you see this happen (typically 1 or 2 candles in the opposing direction) simply close the trade and re-enter when the price has returned to the point where the change started. as for exit strategy - a lot of the time you can count on approx 2 - 3 times the value of the retracement (e.g. if the price retraces 10 pips, then you are looking on the re-entered trade of a TP between 20 - 30 pips!
You can use ANY 3 consecutive candles, however this works best when the price has just "bounced" off the Bollinger Bands.
forex trading demo app
Definitely most traders will agree with me in that renko charts (also known as fixed range charts) are one of the best tools for trading, eliminating most of the "noise" around the market and giving us a very clean picture of pivots and support and resistance levels. Renko charts "even out the blur" by displaying a new bar only when a movement of a fixed set of pips has happened. As you may see on the image shown below - an example of a renko chart - price action becomes easier to understand and overall trading becomes easier. Given the fact that fixed range charts are good for trading it then becomes obvious to ask the question : can we build and back test expert advisors for the MT4 and MT5 trading platforms that use renko/fixed range charts ? The answer to the first part of the question is yes but - very sadly - the second answer is a resounding NO. On todays post I will share with you my conclusions around this subject and why it is NOT possible to build 10 year accurate backtests of this type of charts using metatrader 4 or 5. I will also point out why results may be EXTREMELY misleading and how they may point out to a much higher profitability level than what is actually achieved.
-
-
First of all, let us talk a little bit about how we generate renko/fixed range charts on metatrader 4. We usually use one minute charts of downloaded metaquotes data and then apply a script to generate the fixed range chart we want to see. We effectively generate a history file with all the information necessary to display these new charts. Now, some people have ventured into using this data to run backtests and their results have often been pretty fantastic, however they NEGLECT to take into account some VITAL aspects of this conversion that make backtesting and especially the backtesting of scalping systems ABSOLUTELY useless.
The main problem with the backtesting of system on fixed range charts using this generated data from metaquotes one minute information is that tick data is not available. Because of this we get into a problem regarding the splitting of the bars and the actual "volume" within each one of them since the formation of fixed range bars happens "in between" one minute candles. The result is that we dont know when a new bar gets formed and the overall tick distribution becomes impossible to know. The image below shows you in a more graphical way what the problem exactly is. The end result is that a renko bar may have been formed before or after certain movements and therefore the whole movement of price and the exact formation of the fixed range bars is NOT accurate.
-
-
This effectively leads to a massive increase of the errors generated by mass interpolation and it acquires a fairly important tone when using fixed range bars in the order of 1-10 pips. This problem of generation and tick distribution can be SO large that actual simulations are absolutely unreliable to the point where backtesting results may give extremely profitable results (a few hundred dollars to billions in a few years) of a system that in reality is a simple loser. Scalpers are extremely vulnerable to this since the actual formation of the bars is not known and therefore the actual "small movements" that determine their profitability and the timing of their signals is TOTALLY different.
-
-
It is also worth understanding here that the problems with fixed range bars are FAR worse than those of a scalper within a time based chart since the actual distribution of ticks is actually known in time based charts and therefore the distribution of them between bars holds at least some similarity with reality while those of a renko chart are merely made up since no tick data to do an adequate "splitting" of the information is available. The shape of renko charts changes with one minute interpolation while this doesnt happen with time charts. However backtesting of scalpers is unreliable in either case not only due to one minute interpolation problems - which may greatly overestimate profitability - but due to the lack of execution problems and spread information.
To sum it up, even though the generation of fixed range/renko charts is possible in metatrader 4 and 5, the actual use of these charts for automated trading is not possible since the actual usage of accurate simulations to get draw down and profit targets for these systems is not possible since no tick data to do an adequate tick distribution splitting is available. For this reason if you see any system that has a modeling quality of (n/a) and the owner says the backtest was done on fixed range/renko charts you already know why this systems results are NOT reliable and why there is a GREAT chance that results are highly overestimating profitability and underestimating losses (to the point where real trading would show opposite results). Especially systems that use small renko bars and scalping techniques are bound to give astronomical results that are obviously not achieved in real trading.
Of course, renko bars are a great tool and it would be absolutely great to be able to do simulations with their data. However, until metaquotes decides to include tick data or we find a source of tick data that goes back to 2000 our chances of doing accurate simulations on this type of charts and therefore the development of systems with accurate profit and risk targets will not be possible.
If you would like to know more about automated trading and how you too can learn to code your own adaptive and likely long term profitable systems based on accurate simulations please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
-First of all, let us talk a little bit about how we generate renko/fixed range charts on metatrader 4. We usually use one minute charts of downloaded metaquotes data and then apply a script to generate the fixed range chart we want to see. We effectively generate a history file with all the information necessary to display these new charts. Now, some people have ventured into using this data to run backtests and their results have often been pretty fantastic, however they NEGLECT to take into account some VITAL aspects of this conversion that make backtesting and especially the backtesting of scalping systems ABSOLUTELY useless.
The main problem with the backtesting of system on fixed range charts using this generated data from metaquotes one minute information is that tick data is not available. Because of this we get into a problem regarding the splitting of the bars and the actual "volume" within each one of them since the formation of fixed range bars happens "in between" one minute candles. The result is that we dont know when a new bar gets formed and the overall tick distribution becomes impossible to know. The image below shows you in a more graphical way what the problem exactly is. The end result is that a renko bar may have been formed before or after certain movements and therefore the whole movement of price and the exact formation of the fixed range bars is NOT accurate.
-
-This effectively leads to a massive increase of the errors generated by mass interpolation and it acquires a fairly important tone when using fixed range bars in the order of 1-10 pips. This problem of generation and tick distribution can be SO large that actual simulations are absolutely unreliable to the point where backtesting results may give extremely profitable results (a few hundred dollars to billions in a few years) of a system that in reality is a simple loser. Scalpers are extremely vulnerable to this since the actual formation of the bars is not known and therefore the actual "small movements" that determine their profitability and the timing of their signals is TOTALLY different.
-
-It is also worth understanding here that the problems with fixed range bars are FAR worse than those of a scalper within a time based chart since the actual distribution of ticks is actually known in time based charts and therefore the distribution of them between bars holds at least some similarity with reality while those of a renko chart are merely made up since no tick data to do an adequate "splitting" of the information is available. The shape of renko charts changes with one minute interpolation while this doesnt happen with time charts. However backtesting of scalpers is unreliable in either case not only due to one minute interpolation problems - which may greatly overestimate profitability - but due to the lack of execution problems and spread information.
To sum it up, even though the generation of fixed range/renko charts is possible in metatrader 4 and 5, the actual use of these charts for automated trading is not possible since the actual usage of accurate simulations to get draw down and profit targets for these systems is not possible since no tick data to do an adequate tick distribution splitting is available. For this reason if you see any system that has a modeling quality of (n/a) and the owner says the backtest was done on fixed range/renko charts you already know why this systems results are NOT reliable and why there is a GREAT chance that results are highly overestimating profitability and underestimating losses (to the point where real trading would show opposite results). Especially systems that use small renko bars and scalping techniques are bound to give astronomical results that are obviously not achieved in real trading.
Of course, renko bars are a great tool and it would be absolutely great to be able to do simulations with their data. However, until metaquotes decides to include tick data or we find a source of tick data that goes back to 2000 our chances of doing accurate simulations on this type of charts and therefore the development of systems with accurate profit and risk targets will not be possible.
If you would like to know more about automated trading and how you too can learn to code your own adaptive and likely long term profitable systems based on accurate simulations please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
forex trading hours interactive brokers
Monday, March 28, 2016
If you look at my last few weeks of posts I have been very excited about the new qualities of the Metatrader 5 trading platform and the benefits it brings to system development regarding faster execution, faster optimization and added flexibility. Using my prototype implementation of Watukushay FE I analyzed trading over several different instruments and I finally came up with the "starting point" of intra-currency trading for this well-known freely available trading machine. This week I decided to do a small experiment and compare my results of Watukushay FE for the AUD/USD on Metatrader 5 with those found out with Metatrader 4 and the results found were extremely surprising. On todays post I want to talk about my findings, the possible causes of the issues found and what I will be doing to investigate the nature of this problem and what solutions can be implemented to deal with it.
During the first post comparing Metatrader 4 with 5 and the backtesting results of Watukushay FE we already saw a small yet noticeable difference between the testing results obtained on both trading platforms. I talked about the possibility of these errors being feed-related and the fact that the Metatrader 5 history feed might be more reliable since it has been "remastered and fixed" for this new platform. However the difference was small and therefore there was no substantial issue besides an anecdotical note pointing out this curious fact.
However when I decided to run the initial AUD/USD tests on Metatrader 4 to compare the results I obtained with Metatrader 5 the difference changed from "noticeable" to "abismal". The pictures below show you the results for MT5 and MT4 using the exact same settings on the AUD/USD currency pair backtest from 2000 to 2010. The overall equity curve is very different and the results do point out that something is substantially very changed between the historical feeds of MT4 and MT5. I first thought that the difference would be due to the presence of Sunday candles but this turned out to be false since the MT5 feed doesnt have any of them, so regarding this aspect it is the same as MT4. I then thought about the possibility that the whole difference is caused by important changes in data prior to 2006 (before metatrader 4 was launched) and the fact is that data differences are NOT limited to pre 2006 periods, the whole historical feed is different between both trading stations and meaningful differences are present. If you analyze the results youll notice that almost all candles have different - if only very slightly - high/low/open/close values pointing out that RSI and ATR values will be very different. The change in one minute interpolation mechanisms is also not likely a factor here as Watukushay FE strictly controls bar opening on both its MQL4 and MQL5 implementations.
-
-What causes such a dramatic change in profitability ? To get to the bottom of this problem I decided to strip down the logic to its simplest form and eliminate the closing logic of the EA, leaving only the entry rules. This shows us that there is still some difference between backtesting results (shown below). This means that differences in results are caused by differences in the RSI and ATR indicator calculations which are dependent on each backtests particular historical feed. Stripping down the logic does reveal that most dependency is located before 2002 with results beyond this date being in better agreement. However there is still some dependency which is caused by differences in data between both historical sets beyond this period.
-
-Since we simply cannot know for sure which of the two historical data selections is better - and they are probably both valid within normal broker differences (with the 2000-2002 data being very different probably due to differences between feeds in this period) - it becomes a wise decision to run backtests on both and trust the less profitable results to calculate profit and draw down targets. In some cases like the EUR/USD backtests this proves to be trivial but on others like the one I showed you today doing this mixed analysis proves to be extremely important. I will email the people at metaquotes to get some information about the different nature of the feeds and I will let you know once I have more information about their origin. However up until now all backtests of Watukushay FE seem to be more profitable on MT5 (meaning that our MT4 simulations are in fact the worst case scenario). Investigating other issues which may be related with the closing mechanism of orders in MT5 is also something I am currenlty doing since I have seen that the differences when the closing logic is enabled seem to have other strong causes besides simple feed dependency (more on this on a later post !).
If you would like to learn more about automated trading, the evaluation of expert advisors and the programming of your own strategies please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
forex trading journal
What is Forex Trading ?
Forex Trading Introduction
Forex (Forex) is an acronym for foreign currency exchange.
Forex Trading (Forex Trading) refers to purchases and sales of currencies or currency trade.
Forex currency trading market, refers to the global market.
The trade in this market is the currency of different countries.
Forex trading via the Internet in the modern era is even.
How to Sell on the Internet is krydu currency.
To know in detail about this study, please visit our web site.
?????? (Forex) ???? ????? ???????? ?? ???? ???
?????? ?????? (Forex Trading) ?? ???? ????? ?? ????? ?? ????? ?? ????? ????? ???
??? ?????? ?????? ?? ???? ????? ?? ????? ?? ????? ?????? ???
?? ?????? ??? ????? ????? ?? ????? ?? ????? ???? ???
?? ?? ???? ??? ??? ?????? ?????? ??????? ?? ????? ?? ??? ???? ???
??????? ?? ????? ?? ????? ????? ???? ?? ???? ?? ?
?? ???? ??? ????? ?? ???? ????? ?? ??? ????? ??? ???? ?? ?????? ???????
forex trading mobile app
On yesterdays article - which was part No.1 of this post - we talked about the definition of liquidity and the implications of high and low liquidity levels on the forex market. Today we are going to give an in-depth look to liquidity in the forex market, particularly I will talk about recent literature in economics dealing with the evaluation of liquidity on several different currency pairs and what we can conclude and use from this analysis. After reading this article you will have an idea about which are the most liquid and illiquid currency pairs, something which should give you a good idea of what pairs you would want to focus on for the development of mechanical trading strategies.
First of all, it is important to understand that liquidity in forex in simply a pain to research. In order to investigate the liquidity levels of any given market instrument we need to have all transaction information including, type, volume and time. This means that we need access to the "books", the registry where all the transaction information of a given broker is kept. Since there is no central exchange in forex, we cannot get the real liquidity values but if we choose a broker that uses a large array of liquidity providers and we take a look at all their transaction we might be able to draw some general conclusions regarding overall pair liquidity values (at least relative to each other).
The Swiss National bank published a paper a few months ago dealing with the evaluation of liquidity on the FX market (you can access it here). Besides discussing previous literature findings regarding forex liquidity the authors investigated the liquidity levels of several different currency pairs using data from 2007 to 2008. The authors used a daily reversal measurement (explained within the paper) of liquidity in order to get a comparable to number to use between the different currency pairs.
-
-The studys first findings show us that the EUR/USD and USD/JPY were the most traded instruments during the testing periods while the AUD/USD and USD/CAD had the lowest trading volume. The authors also emphasize on the fact that even though the GBP/USD is an important pair it is very illiquid when compared to the EUR/USD, confirming the findings of previous studies and pointing to the reason why the development of GBP/USD based systems is far more difficult than for the EUR/USD since the lower liquidity makes inefficiencies harder to exploit in a mechanical fashion.
Another interesting conclusion is the high liquidity of the USD/CHF and EUR/CHF during this period which the authors attribute to the safe-heaven status of the frank and the economic crisis during 2007-2008. The study also shows us that liquidity is not constant but changes considerably over time with most currency pairs starting to lose liquidity around August 2007 (carry trade unwinding) rebounding slightly and then resuming the downtrend at the end of this year. This analysis shows that stressful periods in the market are characterized by important drops in liquidity having a very strong relationship with risk sentiment.
Perhaps the most important contribution of this article is the development of ways to measure liquidity and the finding of correlations of FX pairs liquidity with other financial instruments or markets where liquidity is more easily measured. This in turn would allow investors to watch for drops of liquidity, something that could be especially important to those investors looking to shield themselves from crisis periods (investors involved in carry trades for example).
Of course, for us the most important findings are the relative levels of liquidity of the different pairs and their relative relationship. From the above mentioned study we can see that definitely system development should be focused on the EUR/USD and USD/JPY while longer term strategies aimed at "harder" to trade instruments should be used on pairs like the GBP/USD and the USD/CAD.
If you would like to learn more about system development and how you too can develop systems for these currency pairs with sound trading strategies please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
forex trading good or bad
Market Analysis of the 18th of January 2016 : Opportunities on EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, XAU/USD, EUR/JPY, USD/CAD & NZD/USD D1, H4 & H1
Click on the Menu on "Market Analysis" for all the analysis.
Daily Charts: We have some nice clear trends
EUR/USD: We have no trend, be patient.
GBP/USD: Impulsive wave down, look for short.
USD/JPY: Impulsive wave down (wave 5?), look for short.
USD/CHF: We have no trend, be patient.
AUD/USD: Wave 5 down, look for short.
EUR/JPY: Wave 3 down, look for short.
USD/CAD: Big wave 3 up, go for longs.
NZD/USD: The price has broken the sell fractal and we are far below the box, maybe start of wave 5, look for short.
XAU/USD: We have no trend, be patient.
Click on the Menu on "Market Analysis" for all the analysis.
Daily Charts: We have some nice clear trends
USD/JPY: Impulsive wave down (wave 5?), look for short.
USD/CHF: We have no trend, be patient.
AUD/USD: Wave 5 down, look for short.
EUR/JPY: Wave 3 down, look for short.
USD/CAD: Big wave 3 up, go for longs.
NZD/USD: The price has broken the sell fractal and we are far below the box, maybe start of wave 5, look for short.
XAU/USD: We have no trend, be patient.
For orientation/direction of trades, click "Signals" in the menu (On Monday 18th of January from 8:00 GMT+1)
forex trading quotes & charts
Sunday, March 27, 2016
Gold did break through key resistance level of 1394 opens the possibility of reduced 1350.
The beginning this week, the Asian session was the opening price gap (1393.75) closed the week lower price (1395.7) which helps to quickly pass rates in 1394 and just 15 minutes to the opening price on the 1375 .
Currently, gold prices are being revised up.
As I said, the price level in 1375 is not the destination of the gold. I expect gold will drop deeper in price 1345-1360.
And the picture below is the painting of possible gold price this week.
forex trading chat rooms
The beginning this week, the Asian session was the opening price gap (1393.75) closed the week lower price (1395.7) which helps to quickly pass rates in 1394 and just 15 minutes to the opening price on the 1375 .
Currently, gold prices are being revised up.
As I said, the price level in 1375 is not the destination of the gold. I expect gold will drop deeper in price 1345-1360.
And the picture below is the painting of possible gold price this week.
Strategy :
Sell limit : 1405 - 1410
Take Profit : 1375 - 1360 - 1345
Stop loss : 1416
Hope luck ! :)
forex trading chat rooms
Yes, it is true. We all want to find a profitable trading system that produces money in the long term and we get easily excited with anything that might look promising. This is especially dangerous for new traders as most of them still dont have the ability to recognize the potential of a trading strategy or the actual defects that will make it very hard to trade or simply impossible to succeed with in the long term. Some people new to forex trading are easily convinced with a few trading setups and a week of results while others venture into using systems that dont even offer clear entry and exit setups that have been proved to succeed in trading. On todays post I will give you some advice regarding this subject, I will talk about the characteristics you should look for in a system and the five main reasons why you should NOT use a given trading strategy.
If you go into any of the currently available forums with a section on forex trading systems you will find people using some trading setups that experienced traders would never use. Often these threads will continue until the system faces a draw down period, time after which the rules are changed and the cycle is repeated. This often continues until the general users loose interest and the thread dies, moving onto the next "new technique". How could you know which systems have the possibility to succeed and which ones dont ? Keep reading if you want to learn the FIVE main reasons why you should run AWAY from a trading system.
1. Lack of Statistically meaningful testing. Any system worth using must be evaluated through a statistically meaningful period. The length of this period - if you want a system that has a fighting chance against future market conditions - is of AT LEAST 5 years. This doesnt mean that the system has to be automated and backtested but that the system needs to be evaluated, even if only visually and a record of these simulations MUST be kept. I have seen HUNDREDS of systems on forums that have just been evaluated for a few months or a year and the result is obvious, they simply fail as the market changes.
2. Lack of risk and profit targets. This is perhaps one of the main reasons why I consider people fail with the thousands of systems proposed in forums. There is simply NO clear idea of what the risk and profit targets of the strategy are. What is the longest expected draw down period ? What is the average yearly profitability ? If you go to any forum and ask these questions about a system you will - most of the time - get no answer. This makes people use a system whose risk characteristics they dont understand, usually leading them to failure. If you want to succeed with ANY system, you need to know its risk and profit targets and these targets must be inferred from periods of at LEAST 5 years.
3. Lack of adequate money management. This aspect is very important as money management includes both the exit criteria plus the lot sizing technique. Money management is not simply "only risk x% per trade" it is the lot sizing plus its complex interaction with exit logic mechanisms that allows you to achieve a profitable outcome over long periods of time. If the system you are trading does not have CLEAR exit rules and CLEAR evaluation that shows over a period of at least 5 years of simulations how the closing logic benefits the system and how the overall money management reduces risk then you are not going to succeed with this strategy. Generally systems on the internet developed my inexperienced traders are filled with very complex entries and a vague and unevaluated money management concept. A weak money management strategy that has not been evaluated adequately is definitely something you should RUN away from.
4. Lack of reproducibility. A trading system cannot succeed for everyone who uses it if it cannot be reproduced accurately. Often you will see that systems proposed or shared online fail to have clear exit and entry rules that allow you to follow or evaluate them accurately. It is fairly common to find very vague descriptions of exits like "exit at the next significant support or resistance or Fibonacci level". What does the author interpret as significant ? How does he plot the Fibonacci levels ? This excessive level of discretion is very bad and it usually leads to systems that are extremely hard to evaluate or use successfully. If the systems lack reproducibility it is a definitive signal to run away.
5. Changes every 5 minutes. Perhaps the thing I dont like the most about many forums where systems are shared is the fact that changes are suggested and made very frequently. You will often find that the first post suggests a 50 pip TP only to find 30 posts later that they changed it to a 20 pip TL and then 50 posts later to a 100 pip TP. This is usually the consequence of LACK of confidence, lack of adequate evaluation, lack of adaptability and a general lack of understanding of draw down periods. Every time some loses come by the users build up a correction of the logic based on a few trades without a statistically meaningful evaluation. If you find that the systems characteristics are changed every now and then, you should move on.
I hope that the above information will be useful if you have been looking for a reliable system to use on some of the forums available online or on the internet in general. It is easy to see why the above criteria isnt met by most of the systems found online. It takes a long time to do 5 year evaluations, figure out profit and draw down targets come up with a robust money management system and a robust overall logic, however by doing this you ensure that you KNOW and understand how the system performs and this will be your ONLY weapons against the draw down periods that will certainly come. Having an understanding that bring confidence into your trading is what separates most successful traders from those who fail.
If you would like to learn about automated trading systems and how you can develop your own with a true understanding of their logic and their risk and profit characteristics please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
If you go into any of the currently available forums with a section on forex trading systems you will find people using some trading setups that experienced traders would never use. Often these threads will continue until the system faces a draw down period, time after which the rules are changed and the cycle is repeated. This often continues until the general users loose interest and the thread dies, moving onto the next "new technique". How could you know which systems have the possibility to succeed and which ones dont ? Keep reading if you want to learn the FIVE main reasons why you should run AWAY from a trading system.
1. Lack of Statistically meaningful testing. Any system worth using must be evaluated through a statistically meaningful period. The length of this period - if you want a system that has a fighting chance against future market conditions - is of AT LEAST 5 years. This doesnt mean that the system has to be automated and backtested but that the system needs to be evaluated, even if only visually and a record of these simulations MUST be kept. I have seen HUNDREDS of systems on forums that have just been evaluated for a few months or a year and the result is obvious, they simply fail as the market changes.
2. Lack of risk and profit targets. This is perhaps one of the main reasons why I consider people fail with the thousands of systems proposed in forums. There is simply NO clear idea of what the risk and profit targets of the strategy are. What is the longest expected draw down period ? What is the average yearly profitability ? If you go to any forum and ask these questions about a system you will - most of the time - get no answer. This makes people use a system whose risk characteristics they dont understand, usually leading them to failure. If you want to succeed with ANY system, you need to know its risk and profit targets and these targets must be inferred from periods of at LEAST 5 years.
3. Lack of adequate money management. This aspect is very important as money management includes both the exit criteria plus the lot sizing technique. Money management is not simply "only risk x% per trade" it is the lot sizing plus its complex interaction with exit logic mechanisms that allows you to achieve a profitable outcome over long periods of time. If the system you are trading does not have CLEAR exit rules and CLEAR evaluation that shows over a period of at least 5 years of simulations how the closing logic benefits the system and how the overall money management reduces risk then you are not going to succeed with this strategy. Generally systems on the internet developed my inexperienced traders are filled with very complex entries and a vague and unevaluated money management concept. A weak money management strategy that has not been evaluated adequately is definitely something you should RUN away from.
4. Lack of reproducibility. A trading system cannot succeed for everyone who uses it if it cannot be reproduced accurately. Often you will see that systems proposed or shared online fail to have clear exit and entry rules that allow you to follow or evaluate them accurately. It is fairly common to find very vague descriptions of exits like "exit at the next significant support or resistance or Fibonacci level". What does the author interpret as significant ? How does he plot the Fibonacci levels ? This excessive level of discretion is very bad and it usually leads to systems that are extremely hard to evaluate or use successfully. If the systems lack reproducibility it is a definitive signal to run away.
5. Changes every 5 minutes. Perhaps the thing I dont like the most about many forums where systems are shared is the fact that changes are suggested and made very frequently. You will often find that the first post suggests a 50 pip TP only to find 30 posts later that they changed it to a 20 pip TL and then 50 posts later to a 100 pip TP. This is usually the consequence of LACK of confidence, lack of adequate evaluation, lack of adaptability and a general lack of understanding of draw down periods. Every time some loses come by the users build up a correction of the logic based on a few trades without a statistically meaningful evaluation. If you find that the systems characteristics are changed every now and then, you should move on.
I hope that the above information will be useful if you have been looking for a reliable system to use on some of the forums available online or on the internet in general. It is easy to see why the above criteria isnt met by most of the systems found online. It takes a long time to do 5 year evaluations, figure out profit and draw down targets come up with a robust money management system and a robust overall logic, however by doing this you ensure that you KNOW and understand how the system performs and this will be your ONLY weapons against the draw down periods that will certainly come. Having an understanding that bring confidence into your trading is what separates most successful traders from those who fail.
If you would like to learn about automated trading systems and how you can develop your own with a true understanding of their logic and their risk and profit characteristics please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
forex trading in usa
Indicators: 100Ema applied to close and 28 smooth moving average applied to close.
Time frame: 1hr and 4hr
Currency: Any, but i guess Eur/usd would be preferable.
Entry: the 100ema shows the trend. So if we were in a down trend as given by the 100ema and a candle closes above the 100ema, we enter a buy, you would stay in that buy until a candle closes below the 28 and re-entriesare made using the 28 once price touches it or closes above it when it has first closed below it. The reverse is for a sell trade.
For 1hr, stop loss should be 50-60pips while take profit should be 70-120pips, for 4hr stop loss should be 100pips while take profit should be 100-500pips.
Source: forex-strategies-revealed
forex trading easy
Saturday, March 26, 2016
Yesterday we talked about the use of a likely long term profitable system that takes only five minutes to trade everyday. The system is based on the following of momentum using the 10 period moving average inclination allowing us to get in early on long term trends and get profits in the long term on the EUR/USD. We discussed the systems rules including entries, exits, position sizing and accumulation of positions in favor of the trend if favorable movements happen. Another great aspect of the system we discussed - especially for busy people - is the fact that the system can be traded at the same time every single day, requiring very little time from the trader to actually execute the system.
In order to find out if this system actually has an edge and achieved long term profitability during the past 10 years of trading I carried out a simulation of this strategy by hand using Umaki and the metatrader 4 backtester. This showed me that the decision to entry/exit positions can be taken in a very small amount of time and that anyone trading this system would be able to do so every single day with just a few minutes available (I then performed a back test with the strategy coded mechanically to confirm that my results were accurate). Please take into account that the simulations were done on the EUR/USD daily charts - based only on past closed candles - making sure that backtesting interpolation errors remain to the absolute minimum. Daily simulations are most certainly back/live testing consistent due to the high reliability of this data.
-
-So does the strategy achieve profit ? The above graph shows you the performance from January 05 2000 to June 05 2010. As you can see the system achieved profits quite consistently over the past ten years, capturing almost every major trend that developed on the EUR/USD during this whole trading period. The system took 170 positions during the past 10 years, averaging about 2 positions every three months. The average compounded yearly profit of the system is 15.85% and the standard deviation of the yearly profits is 13.41%. The best year during the test gave a profit of 35.51% while the worst one was -6.94%.
-
-The draw down characteristics of the strategy are also very important to discuss with a maximum historical draw down of 13.81% and a maximum draw down period length equal to 554 days with an average draw down and draw down period length of 8.15% and 242 days. This gives the system a pain index value of 4.92 meaning that it will be easier to trade than the Turtle Trading system from a psychological stand point given the fact that its draw down characteristics are easier to handle.
-
-Another very important aspect to evaluate is the distribution of monthly returns which is shown above. Months were divided into classes grouping months within a 1% profit/draw down range ((-8)-(-7)%.... 1-2%, etc) giving the final distribution shown. This analysis gives us invaluable information about the system which will help us understand how the system trades and what we can expect from it. We can see that the system took trades through only 48 of the 120 months of the test and that the probability of one of those months to come out as a winner was 45% while the probability to have losing month was higher, at 55%. However the losing months were much smaller than the winning months with the average winning month being 11.7% while the average losing month loses only -3.7%. This reflects the risk to reward ratio of this system which along the ten year testing period was a little bit above 1:3.
So what we have here is a system that will only give you trades for about 50% of the months in which you trade it, there is a higher probability that one of those months will come out as a loser but any winning month you may have will be in average three times higher than your average losing month. This behavior is classic of daily trend following systems that aim to profit from long term trends that develop on the forex market.
After this analysis I think that there are simply no excuses. The above is the first manual system - to the best of my knowledge - which only requires 5 minutes to trade everyday, is offered absolutely for free and has a full 10 year historical analysis showing you exactly what you can expect and how your performance is likely going to be in the longer term. Sure, it wont be easy to trade and you are bound to have a few losing years within a ten year period but the system will allow you to develop your trading skills and most importantly your discipline and your ability to execute a trading plan. Finally trading this will become even easier during the following months as an indicator I developed for this system will be shared in a magazine Ill be writing for from October... Stay tuned to find out more !
-
-If you would like to learn more about other trading systems and how you too can design and trade your own mechanical trading systems knowing exactly what the average compounded yearly profit and maximum draw down figures are please consider joining Asirikuy.com, a website filled with educational videos, trading systems, development and a sound, honest and transparent approach automated trading in general . I hope you enjoyed this article ! :o)
forex trading education pdf
Subscribe to:
Posts (Atom)
