Forex Currency Trading Systems ~ forex king kong trading system review
by: Andrew Daigle
While the market is swamped with websites and books offering advice on the ‘best and ‘newest forex currency trading systems, it is important to do a thorough check of the system to ensure that it really works. There are a large number of such forex trading systems that are completely fraudulent or simply do not work, and have been created with the sole intention of making a quick buck. But despite this, there are plenty of forex currency trading systems out there that do work and can be quite reliable if used in a disciplined and consistent manner.
Everyone is looking for a forex trading system that works and gives them high and continuous profitability over a period of time. One must be realistic in searching for a good system, and keep in mind some essential factors when selecting a forex trading system. Firstly, it is critical to fully understand the logic on which the trading system is based. Only a complete understanding will enable you to use the system effectively over a long period of time. Not only grasping the basic logic, but also agreeing with the forex trading system it is important. The forex trading system of your choice must seem logical and intuitive to you or else you will find it impossible to stick with it.
Secondly, you should embrace a good forex currency trading system for the long term, and put in the appropriate amount of research and trial based on this idea. A solid system will tap in to long term patterns and the potential for sustained success of any system in the short term is negligible. Thirdly, be ready for a hit. Be financially prepared for a downturn and based on the assumption that at some point you will face this event, plan for your staying-afloat strategy. Emotionally and money-wise, be ready for the big one when it comes.
When you commit to a forex currency trading system, ensure that you give the system adequate time to start showing profitability. This may be not be months, but possibly years, since every system experiences a time when it produces losses or lowered returns. Give your selected system a fair trial and try to trade consistently and logically. Additionally, some systems will not offer real trading data, but will be simulations that are based on a particular logic and work with historical data. As long as the logic is solid, there is no reason to reject these systems outright.
The simplest forex trading systems tend to work most effectively in a rapidly shifting market place. Just because a system seems complicated, there is no reason to think that it will perform better. Pick something user friendly and intuitive that appeals to you. Identify the major trends that affect a currency and select a forex trading system that works in tandem with it. Finally, a cardinal rule of the trade: Always use on a trading system that is disciplined and rational. Do not be swayed by emotions. This has spelled the downfall of some of the most influential and successful forex traders, including the pros, and must be avoided at all costs. While it may seem unlikely to you now, once you are in the midst of your forex trading experience, you will find it easy to be moved by your emotions.
The biggest advantage of a forex trading system is that it works completely without emotions and if it can be followed mechanically, it will be the key towards a long term profitable career in forex trading. More info for Forex Currency Trading Systems ~ forex king kong trading system review:
A readers comment on quant funds losses ~ bank forex trading system
A reader of mine (who wish to remain anonymous) pointed out that most of the losses seem to come from low-frequency trading models, while high frequency models continue to perform superbly. This also confirms my own experience. My enthusiasm for high frequency trading was expressed previously here and here. More info for A readers comment on quant funds losses ~ bank forex trading system:
Forex Market 3 Powerful Strategies Big Money ~ highest rated forex trading system
If you want to catch the serious profit in forex trading you need to w the forex trends which are medium term. Here we are going to give you a 3 step simple methods which if you use it correctly, will help you catch most forex trend sand lead you to long-term term currency trading success.
Most beginner traders dont bother trying to follow the trend that has come about long term - instead they try to trade by forex scalping or day trading. These methods focus the trader on small moves and they hope to catch small profit however as most short term moves are random, this leads to equity eliminate and sending the trader broke.
Also make sure you are using the Best Forex Broker when trading, which a good broker should have great charts so that you can look at the short term movements as well as long term trend lines.
The other alternatives are swing trading and long term forex trend following and this article is all about the latter method. If you look at any forex chart, you will see long-term term trends that last for months or years. These moves can and do yield serious profit - present we will outline a simple method to get them.
Breakouts- Trading on Confirmation of Break outs
By far the best way of catching the serious moves is to use a forex trading strategy based around breakouts. A breakout is simply a move on a forex chart where a new high or low is made and resistance or support is broken.
Its a fact that most leading moves start from new highs or lows. Right this an sit it next to your computer so that you dont forget it.
While it might appear that you are not buying or selling at the greatest level, you are in terms of the odds of the trend continuing. Most forex traders make the mistake of waiting for the breakout to come back and get in at a better price but these traders never get on board. The grounds for this is if a breakout occurs, then you have a new strong trend and a pullback is not very likely to occur. So you will the boat and therefore profits.
Most traders dont buy or sell breakouts and thats exactly why its such a powerful method.
The only point to keep in mind is a support or resistance which is ruined, should be valid and that means at least 3 points in at least 2 different times frames. The more tests and the greater the spacing between the tests the more valid the level is.
Confirmation- Dont Guess it, Confirm IT
Of course not every breakout keeps and some reverse, these are false and can cause losses. You therefore need to confirm each move. All you need to do to achieve this is to put a few momentum indicators in your forex trading system to confirm your dealing signal.
These indicators give you an estimation of the strength and velocity of price and there are many to choose from. We dont have time to discuss them here (simply look up our other articles) but two of the greatest are - the stochastic and Relative Strength Index RSI
Stops and Targets
Stop points are easy with breakouts - Simply behind the breakout point.
If you have a serious trend then you need to be careful but you can milk it, so dont move your stop to soon and keep it outside of normal volatility. If it is a huge move, trailing stops should be held a long-term way back and the 40 day moving average is a good level to use.
You have to keep in mind that when the trend does eventually turn you are going to give some profit back. You dont know when the trend is going to end, so dont predict it.
Its ok to give a little bit back, as thats the nature of trading forex. Keep in mind if you got 50% of all leading trend you would be very rich. When you are long-term term trend following you have accept giving a bit back and taking dips in open equity as the trend develops - this is noise and does not affect the long term trend.
The above is a simple way to trade forex and catch the high odds moves that yield the serious profit. If you are learning forex dealing and want a simple method that is robust and will help you get every major move, then you should base your dealing on the above method.
Now that you have all the winning strategies, you now need to have a winning broker, recently the CFD FX Report has reviewed these brokers and have come up with Best Forex Broker to find out this visit the website or email us support@cfdfxreport.com
By forex broker More info for Forex Market 3 Powerful Strategies Big Money ~ highest rated forex trading system:
The Seven Top Secrets To Trading Futures Successfully ~ 1 hour forex trading system
The most successful floor traders are those that have the most experiance, this is no coincidence at all and should be a pointer for those who aspire to become a good trader. Trading can be likened to being a sportsman, such as a golf pro or tennis champion, you need to be trained and in good physical shape. Skills are needed which must be developed over time and practiced until they become 2nd nature. Here are some of the key skills that you must develop as a trader.
1. Technical analysis can be used for futures as well as the more standard stocks, options and bonds that most people trade. This can give you a large edge over other traders who have not taken the time to study the charts support and resistence areas, trendline and patterns. learning technical analysis is really a must do if you want to trade futures successfully.
2. This is a very basic point but is very important, always have your trading plan prepared before you enter a trade, never try and create it on the fly, you will be musch too emotional. make sure that you have both an entry and exit point in your plan.
3. Keep your losses small!, this is the one thing that every trader must do if they want to stay in the game for a long time. By doing this you will preserve your capital allowing you to trade another day. Your small wins will compensate your small losses allowing your big wins to give you an overall profit
4. Professional traders tend to be more patient than amateurs and wait for the market to come to them, amateurs on the other hand tend to over trade, which is a big mistake. Learn to be patient and cherry the best opportunities, this requires both patience and discipline but they are skills that can be easily mastered.
5. It is important that you track all your trades and review them to see where you are making the mistakes. This is hard work, but this is what separates the professionals from the amateurs. Unless you do this you will keep on making the same mistakes. The best way to do this is to keep both a daily and weekly log.
6. Only trade when you are both physically and mentally prepared. This is often overlooked but is very important. Do you think a tennis star can win a game when they are tired and mentally not focused?, its unlikely. Being prepared means getting a good nights sleep, having your trading station and charts well prepared before the market opens, taking the time each and every day to review your trading plan and rules. Finally you must have the mental frame of mind and confidence that you are going to be successful today in your trading.
7. If you are new to trading futures take the time to paper trade until you are very confident that you are going to make money. You will know when you are ready because you will start to hate paper trading knowing that you could be making real cash profits on a consistent basis.
By James J. Dehoiver More info for The Seven Top Secrets To Trading Futures Successfully ~ 1 hour forex trading system:
MATLAB as an Automated Execution System ~ forex trading weekly strategy
I just published an article "MATLAB as an Automated Execution System". (It is available to readers of my book and subscribers to my Premium Content website.) It comes with example MATLAB codes executing a simple Bollinger-band high-frequency E-mini trading strategy.
As I mentioned before, I now find MATLAB to be a good platform not just for backtesting, but for automated execution as well. Of course, not all brokerages have APIs that connect to MATLAB. My example codes are for submitting orders automatically to an Interactive Brokers account.
In general, I find that writing execution programs in MATLAB is a breeze compared to C++, Java or even C#. It takes about 1/5 the development time of a C++ program. Any performance limitations will probably not be due to MATLAB, but to the latency of your brokerage in updating positions and order status. More info for MATLAB as an Automated Execution System ~ forex trading weekly strategy:
3 Wave Rule Denies Traders Sharp Gains on GBP CAD ~ oracle forex trading system
After starting what appeared to be a strong Bearish breakout from its Consolidation setup this week, this pair has now started to pull back sharply Bullish, much to the chagrin of Currency Traders. As surprising as this may have been to some, there was a key Technical Factor at work that was always going to have a hand in this reversal that my traders were aware of - the 3-Wave Rule of trends in the Currency Market. There are generally two types of trends that are seen in this market. They will either be sharp and fast with very few pullbacks or slow and steady with waves of U-Turns along the way. Whenever they take the form of waves as was the case in this Range breakout, they will usually pullback and reverse after 3 of these waves are completed. Following this, the pair will either take a break before resuming the trend or start a new trend in the opposite direction (Section 9 - “Consolidation Trading on the Forex Market - A Complete System for Illiquid Market Conditions”). As we see in the chart below, this is exactly what has taken place following the start of the downtrend at Resistance.
DAILY CHART - GBP CAD
The size of the Range, the three strong waves of bearish signals and the breakout at Support, should have meant the start of large Pip gains for short traders in the days that followed. However, as with the other Technical Factors that lead to False Breakouts in this market (Section 6), the 3-Wave Rule would not be denied. After a few days, the currency pair started to pullback with Bullish Candles to deny me and my clients valuable additions to our growing trade results.
DAILY CHART- GBP CAD
Spotting these pullback areas is key to choosing the currencies that can be traded successfully and side-stepping those that will lead to losses. From this point, we could have two alternate scenarios playing out in the days ahead. In the first, this pullback could only be temporary, giving way to a strong U-Turn after testing the Support of the Range. DAILY CHART- TEST OF SUPPORT
In the second scenario, this pullback could actually be the start of a Bullish reversal, supported by what would be the formation of Double Bottoms below this Range. DAILY CHART- DOUBLE BOTTOMS & BULLISH REVERSAL
We would then see the pair rally sharply back inside the Range to the Resistance boundary, over 300 Pips away. Setups and scenarios like these can be seen across the currency market on all pairs and on all time frames with Japanese Candlesticks. False Breakouts are a common occurrence and the 3-Wave Rule is one of the main reasons that they take place to surprise the unprepared trader. Once these and other important factors are incorporated into a comprehensive trading plan, more gains than losses will be realized, providing you with profitable trading results each month.
SEVEN KEYS TO AN EFFECTIVE FOREX TRADING STRATEGIES ~ forex channel trading system download
Do not start trading without a proper strategy. Unless you acquire proper knowledge regarding the forex market your success maybe sporadic at best and tragic at worst! Without an effective trading strategy you are simply speculating on a market that can wipe you out in no time. If you are looking to invest in the currency markets long term then it is important to treat this as business rather than a poker game. In this article we will look at some simple forex strategies. To begin with we have to stress the fact that unless you make out the market or have in-depth knowledge about it success is not always guaranteed. 1 - You need to understand who all the players are in relation to the forex market including the banks, bankers, the brokers and every other thing in relation with forex. Its important to figure out who does what and how they will impact your trading efforts. 2 - You have to be acquainted with the language of trading and know what things like pips, volume, buying or selling, going long or shorting means. 3 - Also become familiar with the terms Technical and Fundamental which are the two most popular means of analyzing charts. Smaller or private traders tend to prefer technical analysis methods for their trading strategy. This means that they examine price structure and trends. On the other hand institutional investors tend to trust the fundamental examination method more. 4 - The choice of forex strategy is driven by the traders personality and the class of trader he is. So you have to identify the type of dealer you are and based on that you can select a strategy that you feel most comfortable with. A lot of this is to do with your appetite for risk and reward. 5 - A good forex strategy must at reducing your losses. Always try to deal in a higher volume of transactions rather than depending on any single transaction of a huge size. Waiting for the big one could wipe out your profits before you even get started. 6 - You must learn how to keep your finances under control and keep yourself focused and disciplined. This is very important because most people tend to leave this business very quickly as the rate of failure is quite high in forex trading. 7 - Once you have identified and selected a strategy, its now time to put things into practice. Start with paper dealing through brokers who allow such practice and this will let you gain good experience of the trade and your strategy without burning any of your capital. Bonus tip - Make sure that you find a reputable and trustworthy broker so that your trading is executed safely. Following these simple tips in selecting a forex trading strategy will make sure that you get off to a flying start in your forex career. More info for SEVEN KEYS TO AN EFFECTIVE FOREX TRADING STRATEGIES ~ forex channel trading system download:
A good book for quantitative traders ~ forex trading winning strategies
Larry Connors and Cesar Alvarez (the guys behind tradingmarkets.com) recently published Short Term Trading Strategies That Work, a nice collection of simple technical trading strategies that you can easily backtest and verify.
As I have argued in my own book, simple strategies are often the ones that work best. As with any published strategies, you may find that their backtest performance may not be as high as advertised if you test them on a different time period or a different security, or with different transaction cost assumptions; but the main value of these strategies is that they serve as an inspiration to trigger your own imagination and motivate you to refine them further.
(For e.g., though the book mainly covers long-only strategies, you can easily imagine the accompanying short strategies.)
To be quite honest, this is one of the few books on trading strategies that I actually manage to finish reading from cover to cover. More info for A good book for quantitative traders ~ forex trading winning strategies:
The Traders Fallacy is one of the most familiar yet treacherous ways a Forex traders can go wrong. This is a huge pitfall when using any manual Forex trading system. Commonly called the "gamblers fallacy" or "Monte Carlo fallacy" from gaming theory and also called the "maturity of chances fallacy".
The Traders Fallacy is a powerful temptation that takes many different forms for the Forex trader. Any experienced gambler or Forex trader will recognize this feeling. It is that absolute conviction that because the roulette table has just had 5 red wins in a row that the next spin is more likely to come up black. The way traders fallacy really sucks in a trader or gambler is when the trader starts believing that because the "table is ripe" for a black, the trader then also raises his bet to take advantage of the "increased odds" of success. This is a leap into the black hole of "negative expectancy" and a step down the road to "Traders Ruin".
"Expectancy" is a technical statistics term for a relatively simple concept. For Forex traders it is basically whether or not any given trade or series of trades is likely to make a profit. Positive expectancy defined in its most simple form for Forex traders, is that on the average, over time and many trades, for any give Forex trading system there is a probability that you will make more money than you will lose.
"Traders Ruin" is the statistical certainty in gambling or the Forex market that the player with the larger bankroll is more likely to end up with ALL the money! Since the Forex market has a functionally infinite bankroll the mathematical certainty is that over time the Trader will inevitably lose all his money to the market, EVEN IF THE ODDS ARE IN THE TRADERS FAVOR! Luckily there are steps the Forex trader can take to prevent this! You can read my other articles on Positive Expectancy and Traders Ruin to get more information on these concepts.
Back To The Traders Fallacy
If some random or chaotic process, like a roll of dice, the flip of a coin, or the Forex market appears to depart from normal random behavior over a series of normal cycles -- for example if a coin flip comes up 7 heads in a row - the gamblers fallacy is that irresistible feeling that the next flip has a higher chance of coming up tails. In a truly random process, like a coin flip, the odds are always the same. In the case of the coin flip, even after 7 heads in a row, the chances that the next flip will come up heads again are still 50%. The gambler might win the next toss or he might lose, but the odds are still only 50-50.
What often happens is the gambler will compound his error by raising his bet in the expectation that there is a better chance that the next flip will be tails. HE IS WRONG. If a gambler bets consistently like this over time, the statistical probability that he will lose all his money is near certain.The only thing that can save this turkey is an even less probable run of incredible luck.
The Forex market is not really random, but it is chaotic and there are so many variables in the market that true prediction is beyond current technology. What traders can do is stick to the probabilities of known situations. This is where technical analysis of charts and patterns in the market come into play along with studies of other factors that affect the market. Many traders spend thousands of hours and thousands of dollars studying market patterns and charts trying to predict market movements.
Most traders know of the various patterns that are used to help predict Forex market moves. These chart patterns or formations come with often colorful descriptive names like "head and shoulders," "flag," "gap," and other patterns associated with candlestick charts like "engulfing," or "hanging man" formations. Keeping track of these patterns over long periods of time may result in being able to predict a "probable" direction and sometimes even a value that the market will move. A Forex trading system can be devised to take advantage of this situation.
The trick is to use these patterns with strict mathematical discipline, something few traders can do on their own.
A greatly simplified example; after watching the market and its chart patterns for a long period of time, a trader might figure out that a "bull flag" pattern will end with an upward move in the market 7 out of 10 times (these are "made up numbers" just for this example). So the trader knows that over many trades, he can expect a trade to be profitable 70% of the time if he goes long on a bull flag. This is his Forex trading signal. If he then calculates his expectancy, he can establish an account size, a trade size, and stop loss value that will ensure positive expectancy for this trade.If the trader starts trading this system and follows the rules, over time he will make a profit.
Winning 70% of the time does not mean the trader will win 7 out of every 10 trades. It may happen that the trader gets 10 or more consecutive losses. This where the Forex trader can really get into trouble -- when the system seems to stop working. It doesnt take too many losses to induce frustration or even a little desperation in the average small trader; after all, we are only human and taking losses hurts! Especially if we follow our rules and get stopped out of trades that later would have been profitable.
If the Forex trading signal shows again after a series of losses, a trader can react one of several ways. Bad ways to react: The trader can think that the win is "due" because of the repeated failure and make a larger trade than normal hoping to recover losses from the losing trades on the feeling that his luck is "due for a change." The trader can place the trade and then hold onto the trade even if it moves against him, taking on larger losses hoping that the situation will turn around. These are just two ways of falling for the Traders Fallacy and they will most likely result in the trader losing money.
There are two correct ways to respond, and both require that "iron willed discipline" that is so rare in traders. One correct response is to "trust the numbers" and merely place the trade on the signal as normal and if it turns against the trader, once again immediately quit the trade and take another small loss, or the trader can merely decided not to trade this pattern and watch the pattern long enough to ensure that with statistical certainty that the pattern has changed probability. These last two Forex trading strategies are the only moves that will over time fill the traders account with winnings.
Forex Trading Robots - A Way To Beat Traders Fallacy
The Forex market is chaotic and influenced by many factors that also affect the traders feelings and decisions. One of the easiest ways to avoid the temptation and aggravation of trying to integrate the thousands of variable factors in Forex trading is to adopt a mechanical Forex trading system. Forex trading software systems based on Forex trading signals and currency trading systems with carefully researched automated FX trading rules can take much of the frustration and guesswork out of Forex trading. These automatic Forex trading programs introduce the "discipline" necessary to actually achieve positive expectancy and avoid the pitfalls of Traders Ruin and the temptations of Traders Fallacy.
Automated Forex trading systems and mechanical trading software enforce trading discipline. This keeps losses small, and lets winning positions run with built in positive expectancy. It is Forex made easy. There are many excellent Online Forex Reviews of automated Forex trading systems that can do simulated Forex trading online, using Forex demo accounts, where the average trader can test them for up to 60 days without risk. The best of these programs also have 100% money back guarantees. Many will help the trader pick the best Forex broker compatible with their online Forex trading platform. Most offer full support setting up Forex demo accounts. Both beginning and experienced traders, can learn a tremendous amount just from the running the automated Forex trading software on the demo accounts. This experience will help you decide which is the best Forex system trading software for your goals. Let the experts develop winning systems while you just test their work for profitable results. Then relax and watch the Forex autotrading robots make money while you rake in the profits. More info for Forex Trade Strategy Forex Trading Guide ~ forex channel trading system free download:
Amass Amazing Profits with Global Forex Trading ~ ift forex trading system
The global forex trading market never rests. No matter where you are in the world, in brightest noon of darkest night, you can go online and make engage in some global Forex trading. In this, the global Forex trading market is unique. Business hours are always in effect somewhere in the world; government and bank employees are always active somewhere in the world, and the currency markets need to be in operation to facilitate global commerce.
Global forex trading serves over 100 countries, using its DealBrook FX2 software and 24 hour market access with one of the highest levels of customer service available in the forex trading industry. With Global forex trading forex brokers have access to pricing for more than 60 currency pair and excellent analytical services from renowned experts.
The forex market is completely separate from the stock market. Not only that, but there is always a bull market in forex trading. One currency is always falling or rising against another currency.
The forex trading market is open 24 hours a day and is today the most liquid market in the world. With forex and the available leverage strategy you can use 100 to 1 leverage which in turn reduces the need for large amounts of capital to be placed in your account. Forex trading is also commission free and trading is available on more than 60 currencies worldwide.
Another advantage of forex trading is of course the fact that it is global and there are not restrictions placed on shorting which means that you can enjoy your profit opportunities no matter what the market condition.
Global Forex trading in exceeds 1.9 trillion US dollars on a daily basis, three-hundred-and-sixty-five days a year. The total amount of all the stock and bond transactions in the world on a single day is less that one-third of that. The thirty billion dollars which flows through the New York Stock Exchange is a mere drop in the Global Forex trading bucket. And the enormous liquidity of the global Forex trading market, when combined with the low margin requirements offered by most Forex brokers, mean that most trades are filled almost instantaneously, with very small transaction fees.
By Ray Lam More info for Amass Amazing Profits with Global Forex Trading ~ ift forex trading system:
Are quant strategies in trouble yet again ~ acb forex trading system
There were reports that quant strategies have been suffering again in January, given the market turmoil generated partly by the Societe Generale scandal. Mr. Matthew Rothman of Lehman Brothers pinned the blame on momentum strategies (Hat tip: 1440 Wall Street). I partly agree with that assessment, but the full picture is more nuanced.
As I have written in my previous post, December has been a disastrous month for value (or mean-reverting) strategies, based on both public commentaries and personal experience. Yet, as always, mean-reverting strategies bounced back in January and all the pain is gone. In fact, the Societe Generale scandal and the subsequent 1/22 Fed bailout has been a huge bonanza to mean-reversion traders, just like the August disaster had been. (Remember: mean-reversion traders profit from providing liquidity during market panic.) Meanwhile, though December has been a good month for momentum strategies, January has become increasingly inhospitable to them. But one should not be surprised at all. As I have explained before, momentum strategies generally tend to be more unstable and have lower Sharpe ratios than reversal strategies. Any wise quantitative portfolio managers would always allocate a lower proportion of capital to momentum strategies than to reversal strategies. Hence it is no excuse at all to say that a quant portfolio has been hurt by losses in momentum trading -- they are to be expected quite frequently! More info for Are quant strategies in trouble yet again ~ acb forex trading system:
SHARP REVERSALS AVOIDED WITH ACCURATE TARGETS ~ forex trading pro system review
One of the most important aspects of profitable Currency Trading is to always establish accurate trading targets. The market can provide traders with hundreds of pips in movements on a weekly basis for consistent returns across the major currency pairs. In order to avoid unexpected reversals that could affect this success, however, these targets must strike a balance between short-term gains and long-term market uncertainty.
Many of the Currency Pairs have been aggressively breaking out of Consolidations after months of low market volatility, providing profitable breakouts in a very short period. Most of these Consolidations have also been very large which means that in general, their breakouts are expected to be significant over weeks and months. Nevertheless, there a major short-term targets that most of these pairs obey where they either pause before continuing to the long-run targets or reverse unexpectedly.
In order to avoid the dilemma of this crossroads, my Methodology dictates that traders aim for 100-200 Pips per trade which tends to be in line with these short-term price points. The rules for these targets depend partly on the size of the Consolidation as well as the average weekly trading range of each Currency Pair. The breakout on the GBP AUD was from a large Pennant that was formed between April and August this year. There was also a simultaneous breakout from a Range which would have added extra momentum to the trend. Given the size of the Pennant, one would have also expected the breakout to last for at least a few weeks to targets 1000 Pips away.
DAILY CHART
Instead of this large breakout, the pair only declined by a few hundred pips before U-turning sharply back above the Resistance of the Pennant.
DAILY CHART
This unexpected reversal coincided with one of these important short-term targets. Those who traded this pair to that area would have been able to keep their profits without being surprised to see the profits suddenly eroded.
A similar reversal took place with the AUD NZD that also started to breakout from a very large Consolidation setup.
DAILY CHART
Once again, the breakout only last a few days before reversing sharply, breaking Uptrend Lines and returning to the Resistance of the Pennant. Fortunately, we were able to exit from this trade successfully ahead of this pullback. The target was originally supposed to capture over 100 Pips but the criteria of the strategy identified the start of slow down in the trend.
DAILY CHART
DAILY CHART
Given the prevalence of these reversals and a recent Consolidation breakout on the AUD USD, the exit at the short-term target may have been another good decision.
DAILY CHART
DAILY CHART
The reality of this market is that it has the power to both reward and to punish. Most persons who trade this market tend to make good entry decisions, but the choice of targets is one of the most difficult decisions to make. In order to be able to consistently generate long-term gains from this market, the criteria for targets need to be in line with the actual cycle of the market. This will help to curtail our emotions which will always want more from the market especially after a successful trade.
Without even reading the Trading Manual, you can become a Subscriber with the code at the end of the book and benefit from these setups sent 30 Minutes before entry. In addition to this, you will also be able to receive;
Daily Analysis of Currency Pairs;
Weekly Technical Analysis on Specific Topics;
Detailed Explanations of Trade Results;
A Currency Trading Experience focused entirely on Making Money;
How to Develop a Profitable Bitcoin Altcoins Daytrading Strategy Fundamental Technical Analysis An Intermediate Tutorial ~ the ultimate forex trading system review
Fundamental Analysis
I believe that for an Altcoin to be worth anything at all, it MUST first have technical aspects which are built with the future in mind. This is what solely determines if a cryptocurrency has the potential for the mid to long term. Even with 5 new altcoins launching everyday, you barely see 1 a month that can last even the mid-term.
Then, after that I judge the coins based on 7 mediating factors; developers, community, branding/marketing, popularity/virality, novelty, infrastructure, and liquidity. For more about fundamental analysis and an explanation of these factors, read up on the first few sections in my previous post about picking and trading the next profitable altcoin. In this post, I will focus more on technical analysis and trading strategies instead.
With so many coins out there, I like to use these above factors to weed out all the weaker shitcoins, and focus on altcoins which are substantially different from others, and more importantly, provide more value than other cryptocurrencies. After which, I use Technical Analysis to judge entry/exit positions for trading them.
What else do you think makes a cryptocurrency fundamentally better than another, and more sustainable as a currency?
#FoodForThought: What makes a cryptocurrency better than another? What purpose does Money serve? #Bitcoin #Altcoins pic.twitter.com/kdv5i072UM — Alvin Lee (@onemanatatime) March 10, 2014
Technical Analysis
Many will probably agree when I say that the Altcoins market is akin to the "penny stocks" of cryptocurrencies. In this sense, most altcoin markets have much lower liquidity, but have much higher volatility. Since there are over 200 different cryptocurrency markets to date, I prefer to narrow down my list of altcoins to a small handful, and buy under-valued coins or trade the breakouts. Youre going to find it really tough to be watching more than 5 altcoins at the same time, so I highly suggest keeping your list small, and adapt your watchlist to the fast changing markets.
If youre new to technical analysis, heres a really good beginners video on daytrading Penny Stocks, which also explains the basics of chart reading and an introduction to basic trading jargon that Ill be using throughout this post. The important concepts to take note of are resistances & supports, breakouts that coincide with high volume, and the general idea that "what goes up must come down".
How To Trade Penny Stocks (Part 1): http://www.youtube.com/watch?v=HYK2a77TjvU
So after you get the basics sorted out, you should be ready to learn how to trade! Im gonna break this intermediate technical analysis tutorial down into five main portions, and have compiled videos from other trading experts to give even beginners a better overall idea, and teach you all you need to know to devise your own Bitcoin & Altcoins trading strategy.
1. Top Down Analysis
Firstly, lets look at the top down analysis method of reading charts. I always begin by trying to understand the market from a bird eyes view. Compare both charts from a long term period (e.g. 1d) against one from a shorter period (e.g. 15m) to get a holistic view of the market. This will help give you a general perspective of market trends, while peaks & troughs give you an idea of market resistances & supports.
Use these basic resistance & support levels to judge entry/exit prices. In general, previous high and low points are new resistances or support depending on where the price is, and points where u can see big breakouts will be the new short term resistance/support. To get a better idea of what I mean, watch these videos by Jason Stapleton who explains top down analysis, resistances & supports, and structure.
Forex Trading: Higher Time Frames and Top Down Analysis: http://www.youtube.com/watch?v=M9yCc7lD21Q
Learn to Understand Structure: https://www.youtube.com/watch?v=tJmMU-8yicM
Heres another video which points out some keys to being a successful trader; namely to learn the set-ups, and to learn risk-management. Watch it here: "3 Keys to Day Trading Success: http://www.youtube.com/watch?v=TzsVTvA9DoE".
2. Retracements
The concept of retracements is, in my opinion, the most important one that any trading enthusiast must grasp in order to understand how the markets flow. In essence, a retracement is a temporary price movement against the established trend, and helps us understand that the markets move in wave patterns as highlighted by the Elliott Wave Theory. One way to look at it, as highlighted by this video below, is that most price-actions follow a pullback rule to fibonacci retracement levels (38%, 50%, 62%).
The 50% Rule: http://www.youtube.com/watch?v=7VSWqM0jfIQ
The most important concept to take away from this is "what goes up must come down"; that price movements in one direction are always followed by retracements in the opposite direction. Of course, not all movements will follow the same pullbacks, and these levels should only be used as a guide. Heres another video: "Understanding Fibonacci retracement lines: https://www.youtube.com/watch?v=KzHjxPxGzMw".
So the question then is, how will we know if this counter-movement price action is a retracement or a reversal? There is no way to say for certain, but there are several patterns that have a high probability in indicating a reversal; such as double tops/bottoms & head-and-shoulder patterns, and large selling volume after periods of bounded movement. Keep in mind that trading is a game of probability, consistency, risk-management and profitability over the long-term; not about making the right trade every single time.
3. Trading on Volume
Another important concept you need to understand is that large price movements almost always coincide with high trading volume. Take the recent spike in Bitcoin price on 3rd March 2014 for example:
Bitcoin price spike coincides with high trading volume: 3rd March 2014. (Bitcoinwisdom.com)
With this in mind, this is where the liquidity of an altcoin also comes into play; the higher the trade volume of an altcoin, the lower the spreads, and the more likely you will be able to make some profitable trades from it. In general, the trade volume is a good indicator of, and is proportional to the popularity of the altcoin at the current time.
Apart from the actual trading volume itself, another good indicator is the change in volume over time; if you realize that the trading volume of an altcoin has been steadily increasing over the last few days, it could be an indication that a big price movement is coming up. "24 Hour Volume" data is usually shown on the exchanges, such as MintPal or Cryptsy, while another good website to use is Cryptocoincharts Market Comparison Chart, Coinmarketcap, and Crypto Coins Table.
Do also check out these 2 videos about trading on volume, that Im sure will be useful for your altcoins and bitcoins daytrading:
Trading Volume Indicator on Your Day Trading and Swing Trading Charts: http://www.youtube.com/watch?v=byrjmP7DQJc
How to Analyze Stocks Trading on Volume: http://www.youtube.com/watch?v=lzfo-mh1Zv0
4. Breakout Patterns
The last concept I want to share is breakout patterns. Although most people are familiar with this concept, many do not know how to profit from them. This is one of the best tools to use for planning your entry positions, while there are various ways to do so, which are highlighted by these first two videos below:
How I Trade Breakouts: https://www.youtube.com/watch?v=6YZ4ORz-UJ0
Phil Newtons Break out Strategy | Price Action Forex Trading: http://www.youtube.com/watch?v=3gN-6D8nH0E
On hindsight, these breakout patterns always look like the perfect indicator for entry positions. But how do we really pull it off? How can we enter positions pre-formation of a chart pattern? Watch these videos to further refine your entry & exits on your altcoin trades.
Do You Trade Breakouts ? Trade Chart Patterns Simple Indicators: https://www.youtube.com/watch?v=XyR-m8aUY3I
Breakouts on Triangle patterns:
Ascending triangle - Trade long
Descending triangle - Trade short
Symmetrical triangle - Prior to forming triangle: only take long trades on the way up, and short on the way down
High Profit Trades found with Candlestick Breakout Patterns" - Stephen Bigalow http://www.youtube.com/watch?v=1fB3EF7XeXU
5. Advanced Trading Strategies
Learning #Bitcoin #Altcoins trading by watching Forex & Stocks trading videos on YouTube is like learning to skateboard w a bicycle manual. — Alvin Lee (@onemanatatime) March 26, 2014
Now comes the fun part: how can we take all that weve learnt so far and put into good use for trading Bitcoin/Altcoins? Here are some pointers for you:
What weve learnt is more of a tool to make better entry and exit positions.
Keep in mind trading the bitcoin & altcoin markets as you watch the rest of these more advanced videos, and I hope youll be able to gain some insights to build up your Bitcoins & Altcoins trading strategy.
Granted, forex & equities trading is much different from bitcoin or altcoin markets. However, the fundamentals are the same, and you should learn to draw lessons from the strategies talked about in the videos to supplement your bitcoin/altcoins trading strategy.
In the next videos, more advanced trading strategies and chart patterns will be shared. These strategies may seem very specific, but my goal is to give you better understanding of how these analysis tools are used, and to give you an idea of how different tools can be used to develop a single trading setup. The specifics are not important; what I hope to achieve is to open up your minds to new ideas, expand your trading knowledge, and ultimately encourage you to explore a diverse variety of trading strategies.
Read up more on some of the main ideas discussed:
Fibonacci Analysis
Fibonacci Extensions vs Retracements
Elliott Wave Theory
Harmonic moves/pattern
Trading a Breakout: http://www.youtube.com/watch?v=cB-M_0ZqxG4
How The Pros Trade Using Fibonacci Retracements/Extension Technical Analysis: https://www.youtube.com/watch?v=c9faCD9V838
Ratio Trading: How to Predict Market Moves: https://www.youtube.com/watch?v=i8sO3buv7sU
If you have more time to spare, watch these 2 very good (but lengthy) videos by Steve Nison for more trading strategies:
Profiting in Forex Disc 1: https://www.youtube.com/watch?v=RCTr8WGQDIw
Secrets To Becoming A Samurai Trader, Steve Nison [1/2]: https://www.youtube.com/watch?v=VKtGeZUjLWo
What other trading strategies and chart patterns do you use for Bitcoin & Altcoins trading? Share it with me! Im always up for a discussion and would love to learn more & improve my trading strategy. Leave a comment below or tweet me at @onemanatatime.
Cryptocurrency Portfolio
Although Ive been talking about conslidating my portfolio into a largely BTC/LTC one since January, I didnt really do it until earlier this month. For me, its back to basics: use technical specifications as the basis & utmost important factor for long-term sustainability.
Hence, my cryptocurrency portfolio now consists of a largely Bitcoin one, with a large portion of the other half in longer term altcoins such as Peercoin, Litecoin, Vertcoin, and Dogecoin. Lastly, I also leave about 10-20% of my portfolio to daytrade altcoins. I have listed my cryptoportfolio on the right column of this blog, and will continue to update it as the markets evolve.
Also, keep a lookout for my Cryptocoincharts Investment Club profile, where I share new altcoin trades.
Trading strategy
There are many available trading strategies to choose from to suit your own needs, such as daytrading, position trading, swing trading, fundamental trading, momentum trading, or scalping, just to name a few.
Although the Bitcoin and Altcoins markets are very similar, I trade them very differently. With Bitcoin and trading on Bitfinex, I would say my trading strategy is mainly a position or momentum trading one, and largely technical. On the other hand, my Altcoins trading strategy is largely fundamental although technical aspects play a role in selecting altcoins, and consists of a combination of swing and momentum trading.
In general, I use simple technical analysis concepts like a top down analysis, resistance/support, and structure to read charts and find entry/exit positions. On Bitfinex, I typically trade using resistance/support levels, coupled with breakouts on high volume. While for most altcoin markets, I first look for rising trading volume, and typically try to predict breakouts with fundamental analysis, or buy on retracements when momemtum kicks in.
Timing is everything in trading, and I typically keep my watchlist to 5 or less cryptocoins at any one time, and only spend about a day or two trading each one. In fact, I was only looking at 5 different altcoins throughout the whole month of March, but thats more than enough if each one made profits of 100-1000%. The altcoins that I were watching this month include: Heavycoin, Blackcoin, Digibyte, Fluttercoin, and Hirocoin.
Lastly, I just want to share some of the tools I use for trading these dynamic Bitcoin & Altcoins markets. If you have a useful tool I didnt list here, share it with me!
Charts - Bitcoinwisdom.com, Cryptocoincharts.info
Exchanges - Bitfinex, Cryptsy, Mintpal
I try to keep off other exchanges. Although i do also use them on occasion, I keep my coins in there for a minimal amount of time, and withdraw it into a local wallet as soon as Ive completed my trade.
Charting - Tradingview.com
Other resources for altcoin data (e.g. volume) - Cryptocoincharts Market Comparison Chart, Coinmarketcap, and Crypto Coins Table.
More trading Tips With that, let me just leave you with a few wise words and trading tips from @TraderHMS on Twitter.
1. What goes up must come down Again, I just want to emphasize this, because I constantly get asked about chasing bubbles and if an altcoin is a good buy after rallying 500%. Every big price movement is followed by a big retracement, and the next retracements will gradually become smaller and less volatile; until new movement breaks the sideways momentum & starts a new cycle. 2. Money in the pocket is always better than potential profits I typically dont hold a short-term altcoin for more than a week. In fact, I usually only spend 1 or 2 days trading a particular cryptocurrency. For now, my rule for trading shitcoins is "fast in fast out", and to always "sell too early and never buy at the bottom".
3. Trading is 99% watching and 1% trading And another 1000% planning/learning/preparing. It is important not only to know "how" to trade, which I hope this post has helped you with, but also to know "when" to trade!
Trading Card 268: You need good technique and also good tactics pic.twitter.com/vBQqm56ceV — Trading Cards (@TraderHMS) March 11, 2014
4. A good balance is essential Do not be blinded by one particular type of analysis technique. Always try to couple a few different indicators in your trade setups, to improve the profit probability of your strategy. Finding a profitable strategy is easier said than done, but keep in mind that trading is a long term game where consistency is key. Think of profiting over the next 100 trades, and not just about the next 5 trades; and make sure to consider various types of analysis in your trading strategy, namely fundamental analysis, technical analysis, and market tone.
Think in terms of the next 1,000 trades you are going to make: Trading Card 165 pic.twitter.com/jjljUNeUn6 — Trading Cards (@TraderHMS) March 25, 2014
The Best Trades: Trading Card 266 by Michael Marcus (hedge fund manager profiled in Market Wizards) #investing pic.twitter.com/t6IhrEY7Km — Trading Cards (@TraderHMS) March 5, 2014
5. What is your trading strategy? A trading plan is essential if youre thinking about becoming a profitable trader! But what constitutes a good trading plan? Firstly, fundamentals; you need a basic plan for SELECTING the coins, you dont want to be trading any old shit coin. Secondly comes the technicals to help you pick an entry/exit; devise a holistic trade setup which considers a variety of factors. And lastly, consider the market tone; is there enough liqudity in the market, or is there growing interest from the community?
So, can you answer this last question?
Can you answer this trading question? : Trading Card 267 $SPY $FB $ES_F $QQQ pic.twitter.com/rwEPnvn99N — Trading Cards (@TraderHMS) March 10, 2014
I hope this post has helped you on your cryptocurrency daytrading journey, and that you continue to learn and improve your strategy. Combine different analysis techniques, such as the ones mentioned above, and find a style that suits you; and you should be well on your way to developing your own profitable Bitcoin & Altcoins trading strategy!
If you have any questions at all, feel free to tweet me at @onemanatatime, or leave a question on ask.fm.
All the best & good luck!
P.S. If youre new here, make sure to check out my previous posts about Bitcoin & Altcoins daytrading:
Reddit discussion about this post in /r/CryptoMarkets
How to Pick & Trade the Next Profitable Altcoin: An Insight into What Goes Through my Mind
A Beginners Guide to Margin Trading on Bitfinex: Why you Shouldnt be Trading on Exchanges
Embarking on my Bitcoin Trading Journey: Learn Basic Technical Analysis
More info for How to Develop a Profitable Bitcoin Altcoins Daytrading Strategy Fundamental Technical Analysis An Intermediate Tutorial ~ the ultimate forex trading system review:
More on automated trading platforms ~ forex trading strategies singapore
The ideal software platform for automating backtesting and executing your algorithmic trading strategies depends mainly on your level of programming expertise and your budget. If you are a competent programmer in, say, Java or C#, there is nothing to prevent you from utilizing the API offered (usually for free) by many brokerages to automate execution. And of course, it is also easy for you to write a separate backtesting program utilizing historical data. However, even for programmer-traders, there are a couple of inconveniences in developing these programs from scratch:
A) Every time we change brokerages, we have to re-write parts of the low-level functions that utilize the brokerages API;
B) The automated trading program cannot be used to backtest unless a simulator is built to feed the historical data into the program as if they were live. To reduce bugs, it is better to have the same code that both backtests and trades live.
This is where a number of open-source algorithmic trading development platforms come in. These platforms all assume that the user is a Java programmer. But they eliminate the hassles A) and B) above as they serve as the layer that shield you from the details of the brokerages API, and let you go from backtesting to live trading mode with a figurative turn of a key. I have taken a tour of one such platforms Marketcetera, and will highlight some features here:
1) It has a trading GUI with features similar to that of IBs TWS. This will be useful if your own brokerages GUI is dysfunctional.
2) Complex Event Processing (CEP) is available as a module. CEP is essentially a way for you to easily specify what kind of market/pricing events should trigger a trading action. For e.g., "BUY if ask price is below 20-min moving average." Of course, you could have written this trading rule in a callback function, but to retrieve the 20-min MA on-demand could be quite messy. CEP solves that data retrieval problem for you by storing only those data that is needed by your registered trading rules.
3) It can use either FIX or a brokerages API for connection. Available brokerage connectors include Interactive Brokers and Lime Brokerage.
4) It offers a news feed, which can be used by your trading algorithms to trigger trading actions if you use Javas string processing utilities to parse the stories properly.
5) The monthly cost ranges from $3,500 - $4,500.
If Marketcera is beyond your budget, you can check out AlgoTrader. It has advantages 1)-3) but not 4) listed above, and is completely free. I invite readers who have tried these or other similar automated trading platforms to comment their user experience here.
P.S. For those of us who use Matlab to automate our executions, a reader pointed out there is a new product MATTICK that allows you to send order via the FIX protocol which should let us trade with a great variety of brokerages. More info for More on automated trading platforms ~ forex trading strategies singapore:
Forex Trading Golden Tips On Forex Trading ~ icad forex trading system
By Ray Lam
One should bear in mind that, before starting on Forex trading, one should have proper Forex training. This is because the Forex trading market is a very competitive one. In order to remain competitive and ensure profitability, one should have proper Forex training to familiarise with the Forex trading market. One must not rush into Forex trading.
Forex training brings the knowledge of professionals into your personal trading. Forex training helps you know where to enter a currency based on the direction it is taking and how to forecast that direction. Forex Training allows you to learn how to trade currencies with a live coach. As you trade, your Forex training can truly help you become the master of your money.
Practice forex trading accounts are great for learning how a particular trading account works - but theyre not the real world. Many experienced traders recommend starting off with a mini forex account to minimize your losses while you get acclimated.
Having a proper training in currency trading is always an essential part in every step of daily life. Training and practice in Forex can mean the difference between success and failure and indeed between modest success and turbocharged success.
Keep an accurate and detailed log of all your good and bad trades. Analyze where you went wrong and what you could hav done better. If youre not going to take Forex trading seriously then dont even start! There are many fundamentals that successful Forex traders follow to ensure they reach and stay in the select group of 10 percent of Forex traders who are consistently Forex winning traders. More info for Forex Trading Golden Tips On Forex Trading ~ icad forex trading system:
Trader tax proposal will be the death knell for statistical arbitrage ~ forex trading system- laurentiu damir
U.S. Congressman Peter DeFazio, introduced H.R. 1068: “Let Wall Street Pay for Wall Streets Bailout Act of 2009”, which aims to impose a 0.25% transaction tax on the “sale and purchase of financial instruments such as stock, options, and futures.
Ladies and gentlemen, 0.25% is 50 basis points round-trip. Few if any statistical arbitrage strategies can survive this transaction tax.
And no, this is not "Wall Street paying for Wall Streets Bailout". This is small-time independent trader-entrepreneur like ourselves paying for Wall Streets Bailout.
Furthermore, this tax will drain the US market of liquidity, and ultimately will cost every investor, long or short term, a far greater transaction cost than 0.25%.
If you want to stop this insanity, please sign this online petition. More info for Trader tax proposal will be the death knell for statistical arbitrage ~ forex trading system- laurentiu damir:
, a nice collection of simple technical trading strategies that you can easily backtest and verify.
, simple strategies are often the ones that work best. As with any published strategies, you may find that their backtest performance may not be as high as advertised if you test them on a different time period or a different security, or with different transaction cost assumptions; but the main value of these strategies is that they serve as an inspiration to trigger your own imagination and motivate you to refine them further.
