forex trading strategy

10/28/09

Trend Following System - Building a System For Triple Digit Annual Gains

Forex markets trend long term, they always have and they always will as long as we have a free market and the big trends which reflect the underlying economic cycle can last for many weeks, months or even years. If you learn to trend follow correctly you can make huge long term profits in around 30 minutes a day...

Many traders like to trade the market noise and trade short term but this is doomed to failure, as all short term volatility is random. If you trade the big trends you get better odds, more profits and spend less time on your trading. Lets look at trend following in more detail.

If you want to succeed at Forex trend following, you should keep the key points in mind below when formulating your Forex trading strategy.

Simple and Robust

The best trend following systems are simple and it's a fact that in Forex simple systems work better than complex ones, as they have fewer elements to break than complex ones. A graphic example of this is the free one we have on this site which has only one rule yet, test it and you will see how much money it makes. A Successful trend following system can be based on just looking at support and resistance and have a few indictors to confirm your view and that will work just fine.

Use Breakouts

All big trends start and continue from breakouts to new market highs or lows so if you are considering trend following, breakout methodology should be used in your Trading strategy. Breakouts are simple to understand and simply trade the reality of price change and trading breakouts is a highs odds way of trading Forex.

Trade Infrequently

I know traders that trade maybe once or twice a month and make triple digit gains and that's because they focus on the best high odds trades. You get nothing for effort in Forex trading, you're judged purely on results and if you are patient and wait for the best set ups you will increase your odds of success and reduce your work rate

Acceptance of Short Term Volatility

If you are tend following in Forex you are after trends that last for weeks, months or even years and you have to accept that you cannot predict tops or bottoms, you always have to give a bit back at the end of a trend and you also have to accept short term drawdown in equity against you as you follow the trend.

Long term trend following, requires patience and discipline but if you caught just 60% of every major trend, you would make a lot of money.

10/25/09

Knowing the Ins and Outs of Chandelier Exit

Have you ever heard of a stop placement strategy that trails stop based on previous 'high' points? It is called Chandelier exit as it hangs down from the high point or the ceiling of our trade, just as a chandelier hangs from a room ceiling. The distance, which is usually calculated from the high point to the trailing stop; could also be calculated in dollars or in contract based points. However, the value of this trailing stop moves upward very promptly as higher highs is reached.

The Chandelier Exit, which has a trailing stop from either the highest high of the trade or the highest close of the trade, is best measured in units of Average True Range (ATR). One of the many factors leading to use ATR for measuring the distance from the high to our stop is that, it is pertinent across markets and is adaptive to changes in unpredictability.

The essence of this calculative measure is that, even on expansion and contraction of trading ranges, our stop will automatically adjust and move to the apt level, thereby, constantly staying in tune with changing market conditions. Chandelier Exit is one of the most tried exit methodology used across a varied portfolio of futures markets to generate profitable test results.

It is imperative that the changes in unpredictability can curtail or stretch the distance to the actual stop, since the highs used to hang the Chandelier move only upward. However, in order to witness less fluctuation in the stop distance, you can use a longer moving average to calculate Average True Range. In other ways, shorter moving average is required, in case you want the stop placement to be more adaptive to fluctuating market conditions.

When short averages for the ATR is used; brief periods of small ranges can bring the stops too close, abnormally resulting in premature exit. To avoid this, you can have a short and highly adaptive ATR while calculating a short average and a longer average and using the average that produces the widest stop.

Although Chandelier Exit differs from Channel Exit (which trails a stop based on previous 'low' points), the combination of both, where the trade is initialized by the trailing Channel Exit and then adding the Chandelier Exit, after the price has moved away from the entrance point, will help in making the open trade lucrative. Here the Channel Exit is fastened at a low point and does not move up as new profits are accomplished. At the same time, it is necessary to have the Chandelier Exit at the right position so that the exits are never too far away from the high point of the trade.

The fundamentals behind combining the exit techniques, Channel and Chandelier exit is that, while Channel Exit as a suitable stop that very steadily rises at the commencement of the trade, switching over to Chandelier Exit is necessary to ensure better exit that protects more of our profit. This feature makes Chandelier Exit one of the most sought after rational exits from the profitable trades.

10/24/09

lookup this, dedicated to my friends

10/22/09

How to develop a profitable forex trading stratey

Before you plunge into one of the most liquid, unpredictable and profitable markets in the world, there are some things that you should know about before putting your money in the hands of a forex broker. When money is involved, there are a lot of things you should consider, and these are the key to developing the best Forex strategy, for you to start making a profit. For instance, there is a great deal of money management that must be put in place before you run off with a lot of hope in your pocket. Hope is not going to pay the bills. Your money is and you need to know when and how much of your money you are going to use.

Always set yourself some realistic targets and limits to ensure that you do not spend too much money. Also, do not fall prey to the gambling endemic that is afflicting many Forex traders - this means they simply cannot stop trading no matter how much they loose and they often make irrational decisions in order to 'win' back the money that they have lost. Set yourself some parameters and stick to them, you will regret the fact that you account has run dry and you start to owe the brokerage a sum of money. Also, always have some risk capital on hand so that when things do go wrong, you will be able to bail yourself out. The total sum of your investment and risk capital should be an amount that you are able to afford.

Nobody should go into trading with their life savings in tow. The capital you put into the commodities market should be capital you can spend and if you do lose, will not have an adverse affect on your life style. That said, Forex trading is all about watching market patterns and market psychology. Unlike normal and traditional commodities trading, many people would say that the Forex market falls into a pattern when it comes to either a crisis or an upheaval within currencies. Issues like inflation, political violence and economic decisions can adversely affect the performance of the currency pair you have chosen. But there is always a pattern and this pattern is the structure of many trading strategies of experienced investors. For example, you must learn that there are many 'safe' currencies in the market that investors flock to when there is wind of a calamity in global economies. This is just one aspect.

Market psychology is ruled by major decisions my collective moves in the market. Because of the fact that huge multicontinental banks are the biggest driving forces within the FX market, they have pre planned moves when situations come up. Your job as an investor is to read the signs and react accordingly. The good thing about Forex is that is a very liquid market, so you can pull out any time you want - or on the flip side can invest in a click of a mouse. With these in mind when investing, you will have the key to developing the best Forex trading strategy.

10/20/09

15 Major Day Trading Hints

However you can make immeasurable gains in day trading,you are also expected to expend huge money.On the other hand, if you want to do day trading the following tips and guidelines are here to make you succeed:

Who is day trader?

A person who actively associate within stock market and buys and sells frequently in a day to make quick income is called a day trader.

What are the following tips to succeed in day trading? Here are the 15 list of tips to guide you to succeed:

1. Study the fundamentals of the system like the functioning of the market, schedule to buy and sell, which way the stocks will be operate, and the long and short calls.You consider also learn to take care of the profits while cutting down the losses.

2. In view of excel in day trading is a time consuming process, apply the trading platform available on the trading websites before you actually start.

3. Avoid the thought of making losses let you to scare. Use strategies like stop orders to reduce your losses.

4. Do not worry, If you suffer some loss, as it is a portion of the process.

5. Stop trading, once you have earned your expected profit. Do not hunger after more money and throw away your profit.

6. Assuming that the market does not meet your expectations on each and every particular day, do not trade.

7. During the time that your experience in day trading increases, you gain the ability to foreknow the direction in which the stock price moves. But avoid to go for the lowermost or the topmost stocks.

8. If you find it crucial to decide in which way the market is going, do not trade but just paused and wait.

9. Keep up a record of the results of the day trading. It give permission you to learn the things which are effective, as well as ineffective.

10. Acquire some information about buying and selling tactics of successful day traders. These traders commonly sell when there is good news and buy when there is bad news.

11. Being aloof and professional is the main characteristics of being trader and don't be emotional.

12. Have confidence on your instincts as rely upon excessively on the analysis means skipping some good trading chances.

13. Be trained and use most important strategies to trade.

14. Concentrate and/or focus yourself only on a selected stocks. Sharpen your attention on various stocks will make it difficult for you to track the movement of each stock.

15. Educate yourself in a new trading strategies daily and use them to your benefit.

10/19/09

SECRETS THAT GENERATED 992 PIPS NET PROFIT IN 15 FOREX TRADING DAYS

There is no hype in this headline. This is the absolute truth. The following 13 secrets generated 992 pips net profits for me in 15 trading days.
1 do not over expose your account .maintain an account exposure of between 10% and 30%.

2 Always trust god to find and join the trend early. Always learn to test the strength of the trend with the ADX.

3 Understand your best entry and exit points using pivot points and/or fibonnacci retracements

4 Understand the key japanese candlesticks Reversal patterns.

5 Know when the market is down or when the trend is weak and trade accordingly or stay away.

6 Only use take profit according to predetermined market potential.

7 Buy in oversold markets: stochastic oscilliator and RSI can be used in determining this

8 sell in overbought market: stochastic oscilliator and RSI can be used in determining this.

9 Never entertain fear even when the market moves against you. If you have a good trading system., it will surely come back in your favour.

10 Do not be greedy: Show contentment in all things and this demon will be far from you.

11 Do not over trade: Learn to draw a line between over trading and fear.

12 Always pray before making a trading decision: There is always a guiding light from god if only you will trust him.

!3 Rely on the holy spirit for guidance. He is very dependable and will never leave noy forsake you if you surrender the battle to him.

10/6/09

The Most Important Deal of Your Life

When considering selling, it is vital that you establish a clear cut succession plan to ensure that you receive the correct financial reward for your career's work. It will take time and careful consideration to find the option that works best for you and there are plenty of questions to be raised before you choose which path is best for you.

In practice there are six main options for those looking to pass on or sell their business. Of course each situation is different and often a compromise between these will be required. However as a general rule at least one of the following scenarios will fit with most acquisitions within the broking sector.

Possibly the simplest option is to persuade your fellow directors to buy you out. This can often be agreed quickly and without too many problems as you are dealing with people whose trust and understanding you have gained over the years. The integrity of the business remaining unaffected and the lack of disturbance on your client base and staff are also great advantages. However, this form of buy out is dependant on finance being readily available to the remaining members of the board so it is not always viable.

Alternately an individual could sell their shares to an external third party. There is some risk in this as the wrong person coming in could cause difficulties with the remaining shareholders. The flip side however, is that if the right person comes on board then they can add an injection of new ideas and fresh life into the business propelling it forwards.

A long term strategy is to train an existing employee with a view to taking over the reins. This offers the prospect of instilling your existing values into the next generation of your company and goes some way to ensuring a legacy; however the obvious pitfall is the realisation of capital. Unless your protege has substantial personal wealth or you are a very generous employer, will they have the funds necessary to step in and buy you out when the time comes?

If all shareholders are in agreement then selling up to another firm is a common choice, but how will working under a new regime impact upon those that stay on? Can those members of the board that stay adapt to less business-critical roles so easily? Without the full backing of all the shareholders a successful deal cannot be agreed so negotiations need to reflect the needs of those who will remain as much as those who are looking to leave.

The final option is to face up to facts that liquidation may bring in more revenue than selling the company as a going concern. If the business is turning over just enough to stay afloat but retention rates are not sufficient enough to attract a The Most Important Deal of Your Life reasonable offer, it may be that the equity tied up in assets such as cars or property may be more profitable sold on their own. Again the decision to wind the company down is one not to be taken lightly as the welfare of your staff also enters the equation once again.

The Most Important Deal of Your Life

When considering selling, it is vital that you establish a clear cut succession plan to ensure that you receive the correct financial reward for your career's work. It will take time and careful consideration to find the option that works best for you and there are plenty of questions to be raised before you choose which path is best for you.

In practice there are six main options for those looking to pass on or sell their business. Of course each situation is different and often a compromise between these will be required. However as a general rule at least one of the following scenarios will fit with most acquisitions within the broking sector.

Possibly the simplest option is to persuade your fellow directors to buy you out. This can often be agreed quickly and without too many problems as you are dealing with people whose trust and understanding you have gained over the years. The integrity of the business remaining unaffected and the lack of disturbance on your client base and staff are also great advantages. However, this form of buy out is dependant on finance being readily available to the remaining members of the board so it is not always viable.

Alternately an individual could sell their shares to an external third party. There is some risk in this as the wrong person coming in could cause difficulties with the remaining shareholders. The flip side however, is that if the right person comes on board then they can add an injection of new ideas and fresh life into the business propelling it forwards.

A long term strategy is to train an existing employee with a view to taking over the reins. This offers the prospect of instilling your existing values into the next generation of your company and goes some way to ensuring a legacy; however the obvious pitfall is the realisation of capital. Unless your protege has substantial personal wealth or you are a very generous employer, will they have the funds necessary to step in and buy you out when the time comes?

If all shareholders are in agreement then selling up to another firm is a common choice, but how will working under a new regime impact upon those that stay on? Can those members of the board that stay adapt to less business-critical roles so easily? Without the full backing of all the shareholders a successful deal cannot be agreed so negotiations need to reflect the needs of those who will remain as much as those who are looking to leave.

The final option is to face up to facts that liquidation may bring in more revenue than selling the company as a going concern. If the business is turning over just enough to stay afloat but retention rates are not sufficient enough to attract a reasonable offer, it may be that the equity tied up in assets such as cars or property may be more profitable sold on their own. Again the decision to wind the company down is one not to be taken lightly as the welfare of your staff also enters the equation once again.

9/18/09

Cashing In On Discounted Loans

Generally, the cash advance is provided upon verifying employment. Initial loans, for new borrowers, can be discounted payday loans in that they waive the $30 fee associated with the loan. Your credit history will not be checked. The initial loans are sometimes limited to smaller amounts like $300. After you understand the process, you can take out loans for a greater amount, however, it will still be a small loan of up to $600. These types of loans are perfect for emergencies like broken refrigerators and unforeseen medical expenses. They are not recommended for continuous use and there are even limits to how many loans you can withdraw in a year, in some cases.

The loan information given in your agreement will specify repayment terms. Ideally, you should repay the payday loan on the first paycheck cycle after you're taken the loan. This will keep fees down to a minimum. You can then get another loan later, after you're repaid the first. There may be limits on the number of loans you can withdraw in one year. If you want to get another free cash advance (no fee), then some programs will allow you to refer other people to the service and offer you a free loan for the referral. This is another way you can tap discounted loans for future use.

Knowing the Ins and Outs of Chandelier Exit

The Chandelier Exit, which has a trailing stop from either the highest high of the trade or the highest close of the trade, is best measured in units of Average True Range (ATR). One of the many factors leading to use ATR for measuring the distance from the high to our stop is that, it is pertinent across markets and is adaptive to changes in unpredictability.

The essence of this calculative measure is that, even on expansion and contraction of trading ranges, our stop will automatically adjust and move to the apt level, thereby, constantly staying in tune with changing market conditions. Chandelier Exit is one of the most tried exit methodology used across a varied portfolio of futures markets to generate profitable test results.

It is imperative that the changes in unpredictability can curtail or stretch the distance to the actual stop, since the highs used to hang the Chandelier move only upward. However, in order to witness less fluctuation in the stop distance, you can use a longer moving average to calculate Average True Range. In other ways, shorter moving average is required, in case you want the stop placement to be more adaptive to fluctuating market conditions.

When short averages for the ATR is used; brief periods of small ranges can bring the stops too close, abnormally resulting in premature exit. To avoid this, you can have a short and highly adaptive ATR while calculating a short average and a longer average and using the average that produces the widest stop.

Although Chandelier Exit differs from Channel Exit (which trails a stop based on previous 'low' points), the combination of both, where the trade is initialized by the trailing Channel Exit and then adding the Chandelier Exit, after the price has moved away from the entrance point, will help in making the open trade lucrative. Here the Channel Exit is fastened at a low point and does not move up as new profits are accomplished. At the same time, it is necessary to have the Chandelier Exit at the right position so that the exits are never too far away from the high point of the trade.

The fundamentals behind combining the exit techniques, Channel and Chandelier exit is that, while Channel Exit as a suitable stop that very steadily rises at the commencement of the trade, switching over to Chandelier Exit is necessary to ensure better exit that protects more of our profit. This feature makes Chandelier Exit one of the most sought after rational exits from the profitable trades.

8/5/09

Forex Information: How To Draw DeMark Trendlines

When searching for Forex information on the Internet, you will find articles about the trend lines and trend line analysis.

Tom DeMark is a specialist in the field of technical market analysis and his best-selling book "The New Science of Technical Analysis" released in 1994 indicated some innovative practices in the use of trend lines.

Very Forex information on the Internet is of a general nature, and many articles have been written about Forex by individuals who are not traders themselves. Tom DeMark On the other hand, has had a long career with institutions trading stocks, futures, currencies and options.

His guidelines for the use of trend lines are very specific and can be helpful for the newer player who is searching for reliable Forex information on the use of standard indicators.

Here is a short step-by-step description of how to draw DeMark trend lines:

Note: The term swing high and swing low (also called cycle high and low cycle) refers to the following:

In an Uptrend: A swing high is the wick of a candle that is higher than the wick of the light to the left and right.

In A decreased steadily: A swing low is the wick of a candle that is lower than the wick of the light to the left and right.

Obviously, more light to the left and right, which is higher in a swing low or lower in a swing high makes swing or cycle more significant.

An uptrend is where price is making higher highs and higher lows. A downtrend, where the price makes lower highs and lower lows.

Drawing DeMark trend lines

Draw trend lines in an Uptrend

1. Examine the bottom of the candles on the chart and identify the last light wick which is lower than light wicks to the immediate right and left of it.
2. Look to the left on the chart and identify the previous low light such as light wicks higher to immediate left and right if it is lower than the current low light.
3. Now drag a line from the current minimum light to the previous minimum light (drawing from right to left).
4. Now the end of the newly drawn line which stops at the current low light and extend it forward some distance (drawing from the current location to the right).

Draw trend lines In A decreased steadily

1. Examine the tops of the candles on the chart and identify the last light wick which is higher than light wicks to the immediate right and left of it.
2. Look to the left on the chart and identify the previous high light candles wicks lower to immediately to the right and left if it is higher than the current high light.
3. Now drag a line from the current maximum light to the previous maximum light (drawing from right to left).
4. Now the end of the newly drawn line which stops at the current high light and extend it forward some distance (drawing from the current location to the right).

You have made a Tom DeMark trend line.

This can now become a benchmark for future price action. It will often be pointed out that the price will come and check this level. If it breaks through, it may mean a change in direction, meaning depends on the time frame used.

Trend lines drawn at 5 minutes or 15 minutes charts are much less important than the trend lines drawn on the higher time frames such as 1 hours, 4 hours, or daily.

Caution Required

Very Forex information extols the benefits of the trend lines as an indicator of future price action.

Mr. DeMark certainly has made this a science and his detailed strategy to draw trend lines are certainly more accurate than simply draw general trend lines along the bottoms and tops of trends depends on how the eye sees.

But the trend lines do not in themselves indicate where high probability trades can be taken.

It is important to use a range of indicators before it starts. Examining previous levels of support and resistance is probably much larger in order to determine if the price is likely to hesitate to watch trend lines.

But they may be useful. If you find an important support or resistance level also coincides with a Fibonacci retracement or extension level which is also at a crossroads with a trend line, then you have built up a somewhat lunda solid case for a trade.

Use this Forex information on DeMark trend lines wisely, with caution, and there may be another useful addition to the days Forex trader's toolkit!

8/3/09

Discover Some Magic to Beat The Forex: The Elliott Wave Theory for Forex Markets

One of the best known and least understood theories of technical analysis in forex trading is the Elliot Wave Theory. Developed in the 1920s by Ralph Nelson Elliot as a method to predict the development of the stock market, the Elliot Wave theory applies fractal mathematics to movements in the market to make predictions based on crowd behavior. In essence, the Elliot Wave theory the market - in this case, the forex market - a step in a series of 5 swings upward and 3 swings back repeated constantly. But if it were so easy, everyone would make a killing by catching the wave and riding until just before the crash on the beach. Obviously there is much more on it.

One of the things that makes riding the Elliot Wave so tricky is timing - of all the major wave theories, it is the only one who does not set a time limit on the reactions and states of the market. A single fact is that the theories of fractal mathematics makes it clear that there are several rounds in the wave of waves. Interpretation of data and to find the right curves and the crest is a difficult process, giving rise to the claim that you can put 20 experts on the Elliot Wave theory in one room and they will never reach an agreement on how a stock - or in this case, a currency - is headed.

Elliot Wave Basics

* All measures are followed by a reaction. It is a common rule of physics that apply crowd behavior Elliot Wave theory is based. If prices fall, people will buy. When people buy, the demand increases and supply decreases driving prices again. Almost everyone who uses trend analysis to predict movements in the currency market is based on determining when those actions will cause reactions that make a trade profitable.

* There are five waves in the direction of the main trend followed by three corrective waves (a "5-3" move). The Elliot Wave theory is that market activity can be predicted in a series of five waves that move in one direction (trend), followed by three "right" waves that move the market back to its starting point.

* A 5-3 move completes a cycle. And here, where the theory starts to get really complicated. Like the mirror reflecting a mirror reflecting a mirror reflecting a mirror, it was 5-3 wave is not only complete in itself, it is one involving a smaller series of waves, and a subset of a larger set of 5-3 waves - the next principle.

* This 5-3 move then becomes two sections of the next higher 5-3 wave. In Elliot Wave notation, the 5 waves that fit the trend are labeled 1, 2, 3, 4 and 5 (impulses). The three correcting waves are called A, B and C (corrections). Each of these waves consists of a 5-3 series of waves, and each of them consisting of a 5-3 series of waves. The 5-3 cycle that you are studying is an impulse and correction in the next ascending 5-3 series.

* The underlying 5-3 pattern remains constant, but the time span of each may vary. A 5-3 wave may take decades to complete - or it may be over in minutes. Traders who are successful in using the Elliot Wavy theory to trade in the currency market say that the trick is timing trades coincide with the beginning and end of impulse capacity 3 to minimize the risk and maximize your profits.

Since the time of each sequence of waves varies so much, with the Elliot Wave theory is a matter of interpretation. Identify the best time to enter and leave a trade is dependent on to see and follow the pattern of larger and smaller waves, and know when to trade and when to get out based on the patterns you identify.

The important thing is to interpret the design right - to find the right starting point. When you learn to see the wave patterns and identify them correctly, say those who are experts, you see how they are applied in all aspects of forex trading, and will be able to use these patterns to view your decision if you trade days or in it for a long time.

forex trading strategy

10/28/09

Trend Following System - Building a System For Triple Digit Annual Gains

10/25/09

Knowing the Ins and Outs of Chandelier Exit

10/24/09

lookup this, dedicated to my friends

10/22/09

How to develop a profitable forex trading stratey

10/20/09

15 Major Day Trading Hints

10/19/09

SECRETS THAT GENERATED 992 PIPS NET PROFIT IN 15 FOREX TRADING DAYS

10/6/09

The Most Important Deal of Your Life

The Most Important Deal of Your Life

9/18/09

Cashing In On Discounted Loans

Knowing the Ins and Outs of Chandelier Exit

8/5/09

Forex Information: How To Draw DeMark Trendlines

8/3/09

Discover Some Magic to Beat The Forex: The Elliott Wave Theory for Forex Markets

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