Forex Trading Strategy 66 - forex trading terms

Forex Trading Strategy 66 ~ forex trading terms

Market Analysis of the 27th of April 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.

Daily charts: No direction for the paires, wave 4 or ewave coming back to the zero line

EUR/USD: Its end of wave 3 and we enter into wave 4, prudence
GBP/USD: End of the wave 5 with price now breaking the box,maybe a new wave 3 up
USD/JPY: No trend following a cycle of 5 waves, sleeping alligator, wait for the break of the box
USD/CHF: Wave 4, sleeping alligator, wait for the break of the box
AUD/USD:  End of the wave 5 with, no trend, prudence
EUR/JPY: This is still wave 3 down but price in the alligator and ewave coming back to the zero line, prudence.
USD/CAD: New wave 3 down starting,look for short
NZD/USD: No clear trend, be patient
XAU/USD: Maybe start of the wave 5 down, look for short on lower time frames

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Position Size - forex trading times london

Position Size ~ forex trading times london

A position sizing rule determines the number of contracts or shares that are committed to each trade.

It is very easy to see the impact of position sizing at either extreme.

If we trade a position size that is too small—for example, one S&P con- tract per $1,000,000—our trading equity is not being used at optimal levels. Conversely, a position size that is too large—for example, 100 S&P per $100,000—for our capital can increase our risk of ruin to certainty.

Only the most naive and inexperienced of traders will be ensnared by either of these extremes. It is in the area between these two opposite ends of the spectrum, however, where a sizing rule will have the most impact on strategy performance, whether positive or negative.

The best and most efficient sizing principle will be the one that applies our trading capital in an optimal manner so as to achieve maximum returns with an affordable risk.

We will look at four position sizing examples:

1. Volatility adjusted

2. Martingale

3. Anti-Martingale

4. The Kelly method

A volatility adjusted sizing rule uses the size of the account and the size of the risk assumed per contract per trade.

Definition: Volatility adjustedposition sizing determines the number of contracts or shares per trade as a fixed percentage of trading equity divided by the trade risk.

For example, assume:

1. A risk size of 3 percent of equity

2. A risk per contract of $1,000

3. An account size of $250,000

The trade unit would be seven contracts and is calculated as follows:

Total Equity to Risk = $7,500($250,000 × .03)

Number of Contracts = 7($7,500/$1,000 = 7.5 rounded down = 7)

An example of a well-known money management rule is the Martingale strategy. It is derived from a gambling money-management method.

Definition:The Martingale sizing rule doubles the trade size after each loss and starts at one unit after each win.

There are a number of variations on this theme. One such variation is anti-Martingale.

Definition: The anti-Martingale sizing rule doubles the number of trading units after each win, and starts at one unit after each loss.

Optimal f (fixed fractional trading) was introduced by Ralph Vince in 1990. It is based on a formula derived from the Kelly method, which was, in turn, applied by Professor Edward Thorpe to gambling and trading.

Let us look at one implementation of the Kelly formula.

Kelly% = (Win% ? Loss%)/(Average Profit/Average Loss).

Position size

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Forex Trading Strategy 100 - forex trading vs binary options

Forex Trading Strategy 100 ~ forex trading vs binary options

Trade of the Week: XAU/USD H1: 20-21 January: +2.75% Profit (+164 pips)

For more details, click "Examples of Trade" in the menu

On the 20th of January, the H4 alligator is open, it is an uptrend. We look for a setup on H1, there we have a sleeping alligator and a tight box . We place the pending order above the box. The price breaks the box and moves up and we exit when it break the box in the opposite side for +164 pips (+2.75%)

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Forex Trading Strategy 64 - forex trading taxes usa

Forex Trading Strategy 64 ~ forex trading taxes usa

Review of the week 20 -24 April on 9 pairs H1: +5.5% Profit

A pretty good week with a couple of good trades on friday 24th for a total of the week of +5.5% profit

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Fading false breakout - forex market hours in gmt

Fading false breakout ~ forex market hours in gmt

This strategy is specifically designed for the euro/U.S. dollar (EUR/USD) currency pair. The plan is to enter a sell order above the market, in order to fade a move higher, and at the same time enter a buy order beneath the market, to trade against a move lower. In both cases we are assuming

that any directional movement is false, and the exchange rate is likely to retrace.

Such a directional move is likely to be caused by a large order, which would not have the power to move the market under normal circumstances. Since the volume is extremely low at this time of day, these orders now have the ability to create market movement under “thin” trading

conditions.

Setting

The sell order will be located 15 pips above the “opening” price, and the buy order 15 pips below. Our stops will be located 15 pips away, creating a risk/reward ratio of 1:1 for the trade (one pip of risk per one pip of potential reward).

Since this trade is only designed for only one currency pair, the EUR/USD pair, we can set fixed-pip parameters. If this technique were at tempted with any other currency pair, the parameters would have to be adjusted to account for the difference in volatility.

The trader would also have to consider that the spread for most currency pairs is wider than EUR/USD. Because the “playing field” for this trade will be small, every pip takes on added importance.

This is a brief, “slingshot”-style trade that is designed for quick profits, perfect for EUR/USD. This pair tends to have a very narrow spread, making it ideal for a short-term trade.

Entire the trade: fading false breakout

Let’s take a look at this concept in action. At 17:00 Eastern U.S. time, the openingpriceonthefive-minuteEUR/USDchartis1.2583(seeFigure1).

We’ll place a sell order 15 pips above the opening price at 1.2598, and a buy order 15 pips below the open at 1.2568.

If we do not have a trade execution within two hours, we will cancel both the buy and sell orders. At that point, the reason for placing the trade is no longer valid, because the Asian markets are beginning to stir, and volume and volatility are about to increase. When real volume enters the market, the moves are more likely to be real, so a strategy that fades breakouts would be inappropriate under these circumstances.

After initially drifting higher, the exchange rate drops, and the buy order is executed at 1.2568 (see Figure 2). Our stop is located 15 pips below the entry point, at 1.2553. This is very important we immediately cancel the sell order at 1.2598. Our target will be a modest return to the

opening price, or 1.2583.

Within a few hours, the exchange rate aimlessly drifts toward the exit point of 1.2583, and the trade is completed (see Figure 3). The trader has the option of exiting the entire position, or closing a portion of the trade and moving the stop to the breakeven point.

The EUR/USD “opens” at 1.2583; the buy order is executed at

1.2568

The entry point of 1.2583 is also the exit point.

The exchange rate reaches the exit point of 1.2583.

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Profit target - forex trading hours malaysia time

Profit target ~ forex trading hours malaysia time

The other way to protect open equity profit is to take profits when a predetermined price level or profit threshold has been reached. There are many ways to calculate such profit target thresholds. Profit target orders are set with price or better or price limit orders.

Definition: A profit target is an unconditional exit of a trade with a locked-in profit at some predetermined price or profit level. The incorporation of a profit target into a trading system is a more proactive and aggressive method of profit management. The most positive aspect of a profit target is that once the desired profit is realized, it is captured immediately. It therefore cannot be lost like it can be with a trailing stop. The negative aspect occurs when a profit is taken and the market continues to move well beyond this target level. These potential additional gains are lost because our profit target has closed out the position.

There are trade-offs with the use of profit targets. Some traders cannot live without them just as some cannot live with them. Trading systems that use profit targets, in contrast to those that do not, can be less profitable overall but can produce a higher percentage of winning trades and a smoother equity curve. Sometimes profit targets reduce per trade, and total risk and overall performance can be more stable.

Not all systems are improved by th euse of profit targets.Whether profit targets are beneficial or not very much depends on the style and pace of the trading strategy. In general, active, countertrend trading strategies that trade from overbought and oversold conditions benefit the most from profit target orders. Conversely, slower, trend-following trading strategies generally benefit the least from profit targets.

Profit Target

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Forex Trading Strategy 147 - forex trading mac os x

Forex Trading Strategy 147 ~ forex trading mac os x

Trade of the week: Fantastic +9.5% Profit (+250 pips) trade campaign on EUR/JPY H1 on 17-19 September 2014
For more details, click "Examples of Trade" in the menu

This is a classical trade in the direction of H4 with a double break H1-H4

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