Month: May 2018

Things You Must Know Before You Start Trading and use forex trading strategies

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Business opportunities in the financial market are risky, and some are better than others because use the best forex strategies. The forex market represents the largest global marketplace for trading currency. Check out the following advice if you’d like to get started trading on the Forex market.

Forex completely depends on the economy, more than any other trading. Learn about monetary and fiscal policies, account deficits, trade imbalances and more before going into forex. If you begin trading blindly without educating yourself, you could lose a lot of money.

When analyzing forex charts, you should be aware that the direction of the market will be in both an up and down pattern; however, one of these patterns will generally be more apparent. It is easier to sell signals when the market is up. Use the trends you observe to set your trading pace and base important decision making factors on.

Don’t trade in a thin market if you’re a new trader. This is a market that does not hold lots of interest to the public.

People who start making some extra money become more vulnerable to recklessness and end up making bad decisions that result in an overall loss. Letting fear and panic disrupt your trading can yield similar devastating effects. It’s important to use knowledge as the basis for your choices, not the way you’re feeling in that moment.

On the foreign exchange market, a great tool that you can use in order to limit your risks is the order called the equity stop. Using this stop means that trading activity will be halted once an investment has decreased below a stated level.

Don’t try to get back at the market when you lose money on a trade. Likewise, don’t go overboard when the trades are going your way. You need to keep a cool head when you are trading with Forex, you can lose a lot of money if you make rash decisions.

Forex traders who try to go it alone and avoid following trends can usually expect to see a loss. Financial experts have had years of study when it comes to forex. You most likely will not find success if you do not follow already proven strategies. Becoming more knowledgeable about trading, and then developing a strategy, is really in your best interest.

If you allow the system to work for you completely, you may be inclined to turn your entire account over to the software. This could unfortunately lead to very significant losses for you.

Products such as Forex eBooks or robots that promise to imbue you with wealth are only a waste of your money. Virtually none of these products offer Forex trading methods that have actually been tested or proven. Usually the only people who make money from these sorts products are the people who are selling them. You will get the most bang for your buck by purchasing lessons from professional Forex traders.

Enjoy the following tips from people who have success in trading forex. Of course, there are no guarantees in any trading arena, but hopefully the tips you learn will increase the chances of your individual success. Use the best forex trading strategies you have just learned, and you may very well find yourself bringing in a profit.

My name is Maik Richman.

See the best forex trading strategies

The truth and risk involved in the proprietary trading jobs

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In all kinds of both living and non-living organisms in this world, there is said to be two sides, good or bad and/ good and bad. In the same way, the proprietary trading jobs encounter both success and failure or good or bad concept in it. This involves the understanding of risks in which the proprietary trading jobs provide and at the same time, the unimaginable profit it creates. Reason to face the risks in proprietary trading All know the risk of proprietary trading jobs. The main reason to face this kind of issue is the involvement of different kinds of assets and raw currency of the company directly in the trading to increase its own financial stature in the market. So when the company’s market trade increases, automatically company’s financial stature also increases. But at the same time when the company’s market decreases or falls down the financial status of the company demolishes which leads to very less market price. The techniques involved in the proprietary trading job In these kinds of trading jobs the following techniques are being followed. Arbitraging is the concept which is followed by many proprietary trading workers to evaluate it in the market. There are many kinds of methods; each follows the concept of one basic principal. It involves the pricing strategy of both selling and buying materials. Most of the time this kind of concept involved in the financial institutions or in the banks, which are liable to sell and buy shares in the company. Statistical arbitrage, index and merger arbitrage are the other kinds of techniques followed extensively. Steps to be considered for the job In recent years, the vast involvement of money leads to the involvement of proprietary trading. Among them, monetary contribution to the joining company by the trader or the broker is much which in turn will be added as the capital amount of the consignee of the money. In the concept of the trading, the traders have the benefit to earn brokerage or the Commission for which the trading involved previously. As to know that, proprietary trading jobs involve in the high risk of success which shows the truth of its concept. Read more at http://fivepercentcapital.com

Forex Robot Trading And Martingale Theory

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Forex Robot Trading and Martingale Theory.

A winning combination or sheer madness?

Martingale is a theory which is often mentioned on the various Forex trading forums.

Firstly a detailed explanation of the history of Martingale and what is pertains to do is required.

Let us use a brief definition here

Originally, martingale referred to a class of betting strategies popular in 18th-century France… The simplest of these strategies was designed for a game in which the gambler wins his stake if a coin comes up heads and loses it if the coin comes up tails. The strategy had the gambler double his bet after every loss, so that the first win would recover all previous losses plus win a profit equal to the original stake. Since a gambler with infinite wealth will with probability eventually flip heads, the Martingale betting strategy was seen as a sure thing by those who practised it.

I realise that the above is an overly longwinded description but the basic synopsis is that in gambling every time there is a loss, then you double the next bet. The assumption is that ultimately your luck will change.

Can we as rational, unemotional and experienced Forex traders allow ourselves to utilise this technique in our trading. Various Forex trading systems and Forex trading robots claim to use this system.

In reality, those Forex trading systems and Robots invariably do not hold to the true tenet of the Martingale definition, and they should not.

Let us expand on this.

Assuming that we entered a trade with Stop Loss and Take Profit levels equidistant from the entry price. If we take profit then no issues arise.

If we lose then doubling the bet each time gives us the following situation.

1st loss 2 times original lot size

2nd loss 4 times original lot size

3rd loss 8 times original lot size

4th loss 16 times original lot size and so on.

At the 8th loss we are now at 256 times our original lot size.

What does this mean is actual money. Assuming we originally placed a Stop Loss/ Take Profit at $10, we would at our 4th loss be down $150.

At our 8th level our original $10 risk would be down $2550.

Do we pull the plug here or wait for the 9th level. This is gambling. Rational and successful Forex Traders would abhor this definition of their trading style.

This defies all our trading rules about conservative trading with good risk and money management.

One of the most widely mentioned Forex Robots utilising Martingale, does in fact use a variation, which deserves further observation.

Namely, it will allow up to an 11th level, i.e., 11 consecutive losses before exiting the trade. How they do this is, after entering the trade, if it goes if the direction of the trade they will stay with 1 trade.

If the trade goes against them by a certain percentage,( they set up a grid pattern for this), they will add another increased lot and so on, and the price continues to go against them up to the 11th level.

What this means is if the original trade is for 0.10 lots, then the subsequent is for 0.11 or 0.12 depending on the multiplier used.

At the 11th level up to 50% of original capital is at risk.

How does this work in practice.

My work on this has shown that it will maintain a good and impressive profitability for a month or two and then Shoot itself in the foot literally.

If you utilise this approach, and have 2 months of good profitability and take a percentage of the profits out of the increasing capital then it is fine, and you would consider yourself a truly accomplished trader, balancing a sensible trading manner with an entrepreneurial approach to the Forex market.

If on the other hand you hit the 11th level loss early in your trading history with this style then you would consider yourself quite rightly in error for not following the trading style required.

I have looked long and hard at this style, but must now reject it totally.

Please visit my website/blog for further comment and updates re. The subject of Forex Robot Trading

http://archwood1/wordpress.com

http://www.forexrobotwiz.com

E-mini Trading Is Market Profile Even Worth Bothering With

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There are legions of dedicated Market Profile users who are hopelessly dedicated to this market-driven information tool. Though I dont usually write about Market Profile (MP), for reasons I dont completely understand, MP is a great tool to understand the overall structure during the course of the trading day. To clarify, I am a scalper so I dont utilize MP in the longer term, but there are great applications using the system if your trading horizon is longer than 15 minutes.

What is Market Profile about?

The system has its roots at the Chicago Board of Trade (CBOT) and was initially developed by J. Peter Steidlmayer and was released in various incarnations in 1985 and later years. The purpose of Steidlmayers research was to gauge market value as it develops throughout the course of the trading day. In strict MP theory, various market participants are identified; locals, commercials, members filling orders for other members, and members filling orders for the public. Recent MP theory can be more easily understood in a popular book by James F. Dalton, Eric T. Jones and Robert B. Dalton entitled Mind Over Markets, 2013 edition. While the book is certainly not easy reading, careful study of the book can be very helpful in understanding daily market structure and helps identify the participants driving e-mini trading price movement.

So who cares who is driving market movement and of what use is this knowledge?

As I mentioned earlier, I dont specifically initiate trades based on Market Profile, but use the profile to identify specific areas that potential e-mini trading may develop. Areas like values areas, developing value areas, auction actions and reactions, and bracketed markets are all very useful in alerting e-mini trading opportunities to traders. At this point you might wonder, if I dont use the system to identify specific trading opportunities, how do I integrate MP into my trading system?

Order flow, is the wild card in this equation. I currently use tradetheeminis and sceeto order systems. If I can determine specific areas, using the MP system, where trades are likely to develop, then order flow can pinpoint (in real time) the direction of trade at these general areas where trades can be initiated with startling accuracy. Further, by using confirming real time indicators, like tape reading and analysis, in tandem with MP and order flow, you can initiate some extremely accurate trade set-ups.

Because of the complexity of understanding MP theory and applying it to your trading it is often glossed over as being too technical or time consuming for the retail e-mini trader. I can tell you that time spent understanding market structure, order flow, tape reading, and correlated markets is well spent and will greatly increase your trading accuracy. Is it tough stuff? Yep, it isnt exactly a walk down in the park when you embark on the task of integrating these systems together; but the rewards are manifold.

The trading system I have described is in sharp contrast to the status quo of correlating lagging indicators and hope the market continues in the direction of your tardy entry trade point. I dont fully understand the current crop of retail traders lack of acceptance of the real-time indicators and data that are emerging in recent years. I have noticed a great number of traders who desire to sit in a trading room and take calls from a lead trader. The key give away is wanting to see some sort of brokerage statement to decide whether a room is a good one. What ever happened to learning to trade without specific calls in a trading room? In my opinion, a trading room should be a laboratory where traders interact and educate themselves, with the ultimate goal of trading independence. Is it laziness on the part of retail traders? I cant tell you how many traders expect to sit in a trading room and absorb, through osmosis, what is transpiring in the market, but the numbers of these types of inquiries are a daily part of my trading life. As the saying goes, give a man a fish and he will be satisfied today, teach a man to fish and he will be satisfied for life. I am interested in education and technique, not spitting out trades that participants blindly initiate. Its no way to run a business, and your personal trading is a business. Taking blind trade calls is like owning an auto parts store and not knowing the function of a brake rotor or alternator. Like I said, its no way to run a business.

In summary, I urge you to learn and master the techniques of real time trading, as the tools to accomplish this end are emerging and being refined on a daily basis. The lack of more widespread acceptance of these tools, which were once the exclusive domain of professional and institutional traders, continues to even the playing field against the once dominant role large trading firms enjoyed.

The Relativity Trading System

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I would like to thank you for your interest in the Relativity Trading System. After reviewing the piece below, I’m absolutely certain you’ll agree that we have created something unique.

Allow me to start out by introducing myself. My name is Dean Hoffman. I have been in the commodity business for over twenty-three years, the last seventeen of which I have spent researching and developing specialized commodity trading systems.

In 2001, I created a financial software company dedicated to commercial trading systems. One of those systems has done so well that the Futures Truth Company, an independent trading systems evaluator, has decorated us with their illustrious Top 10 Trading Systems Ever award not once, but twice.

My experience ranges from running my own futures brokerage firm at the Chicago Mercantile Exchange to my latest position as a licensed Commodity Trading Advisor. I’m the founder and owner of two successful trading firms, DH Trading Systems and Hoffman Asset Management. Using my exclusive trading systems, I trade around 15 million dollars in the futures markets daily.

It is from these many years of expertise that I have refined the concepts that I’m about to share with you.

Trading System Basics

In this section, we are going to explore some of the basics of commodity trading. Experienced traders may want to skip ahead to the section on Relativity.

Trends

The first basic idea that must be accepted is trends. Trends are the root of all trading profits. Prices must trend higher from where a trader bought, or they must trend lower from where he sold to earn a profit. Some may argue they’re counter-trend traders, but even these traders need a trend in price ( irrespective of how short term ) to make a profit.

When you think about it, trends can be seen everywhere. Temperatures gradually trend from warm to cold as winter draws near. The demand for gasoline continuously trends higher in the summer driving months. Ground moisture trends from moist to dry when a drought approaches, and interest rates trend from high to low or low to high over the passage of time and so on.

All of these events, whether seemingly natural or unnatural, can create sustained price trends in the commodity market, and it’s from these trends that we are able to try to profit. Systems like these are commonly referred to as trend following systems. Calling them trend following systems is correct because these systems cannot and do not attempt to predict trends. Instead, they jump on board with the trends after they have begun, and there are numerous empirical studies that prove that commodity markets tend to trend well.

The real difference among traders is how they establish the start and end of a trend. A trader may define the starting point of a trend as something as basic as a slight change in the direction of a moving average. As an example, some traders might use a rising moving average of prices as a signal that the market is ready to go even higher. Counter-trend traders, on the other hand, might use this same indicator as a symbol that the market is overbought and making preparations to head lower. Both are potentially correct dependent on their exits. The real question is how we can quantify these trading approaches and code them into profitable trading systems.

Position Sizing and money Management

Along with entry and exit strategies, a trader must likewise have an excellent position sizing and cash management plan. Even if his exit and entry points are 90% accurate, if a trader risks it all on every trade, at some specific point the percentages are substantially in favour of him losing all his money. By the same token, a system that’s only correct 10% of the time but has correct money management could do well.

The final analysis is that traders need to know precisely what proportion of their account to put at risk in any given trade. It is also required to find out how many positions to sell or purchase whenever there’s a signal. An expert system should provide traders with all this info.

Definition of a System

A system can be outlined as a combination of entry and exit methods with a correct money management plan. Some individuals are content to trade one system while others may blend many different systems.

Trading Psychology

The final piece of the puzzle is proper trading psychology. It does not matter how brilliant a trader’s systems are, if he is unable to take the heat in the inescapable drawdown periods, he will fail. By the same token, if he gets too ecstatic during winning periods, he will also tend to fail.

The key is emotional consistency and the ability to stick to a system through thick and thin. A trader must have complete confidence in his approach. Here is where in depth ( and correct ) testing can be useful. Testing may help to build up solid proof that what a trader is doing works over the longer term.

Summary

In summation, traders have to have an edge. This edge should consist of :

1. Proved entry and exit techniques

2. A proven position sizing and money management plan

3. Proper trading psychology

Bear in mind that, although it’d be simple to grow each one of those three points into an entire book of its own, my purpose here is just to give traders a high-level overview.

The Relativity Trading Method

Now that we have laid the basic groundwork, let’s get into the specifics of the Relativity Trading System .

Relativity is a mixture of five different trading systems. Trading five systems simultaneously will give a trader much larger diversification than trading only one. All of these systems are basically trend followers, yet they also incorporate parts that are more inclined toward counter-trend following. Once more, even this helps add to diversification.

These five different systems also communicate with each other and trade together as one integrated unit. As an example, if one system has made significant investments in Japanese Yen, the other 4 systems know not to take any more trades in that market. Doing so would not help to diversify but only raise the risk in the same trading idea.

The Relativity Trading Program uses more than simply the basics of price direction as its system to generate signals. Relativity starts by using complex pattern recognition methodologies that enable it to more accurately identify the best risk-to-reward entry points. It then uses a series of different exits to limit risk and lock in profits. Many traders find this exit methodology pleasing, the explanation being that, unlike many other trend following systems, the Relativity Trading Program tends not to give much profit back after a large move in its favour.

Dynamic Portfolio

One unique aspect about the Relativity Trading System is its dynamic portfolio logic. Unlike most systems that predefine a smaller portfolio to trade, Relativity trades almost every commodity market, and it does this while still maintaining low minimum account size requirements.

The explanation for why it can do this is this systems programme ranks almost all the markets into percentiles on a day-to-day basis. It then narrows its list down to only those few markets that have the highest relative trending potential. The net result of this practice is that, while not so many markets may be on its radar at any specific time, that small list is consistently changing dependent on where the best opportunities lie, and the best benefit is that traders don’t have to worry that the best trends will happen in markets that they do not trade!

Money Management and Position Sizing

The Relativity Trading Program also comprehensively handles position sizing and money management. It in particular manages how many contracts to enter when a trader gets a trading signal. This is essential because different futures contracts have different volatilities and trading them all in equal numbers wouldn’t be properly diversifying. If a contract, as an example, tends to have high-volatility, a trader should trade fewer of those than another whose volatility is lower. The Relativity Trading Program uses a trader’s account size to figure out the correct position size for each trade he makes. Frequently the right position size is simply 0, and there are four reasons for this :

First, if the trade occurs in a market that’s not robust enough in rank to be in the dynamic portfolio. Second, if, given the account size, the risk in the trade is just too high. Third, if there’s already enough or too much risk held in that given sector. And fourth, if there’s already enough or too much risk across all of the current positions in the portfolio.

Relativity does not try to risk more than 1.5% of a traders account size in any specific trade. It will also not risk more than five percent of his account in any specific sector. Let’s suppose, for instance, a trader purchases crude oil for his account. If the risk in that trade amounts to 5% or even more, Relativity won’t take new trades in any markets that are highly associated like unleaded gas.

Relativity also won’t try to risk more than 10% of a trader’s complete account at any given time. Meaning, if each trade a trader is in were to hit its stop price concurrently, the total should represent no more than about ten percent of the whole equity of the trader’s account. Once the risk level either reaches or goes past this ten percent level, Relativity will reject all new trades and return a position size of 0.

( * see risk disclosure on limiting risk )

Summary

In summing up, the Relativity Trading Technique mixes all of the parts that I believe are critical to a trader achieving success at trading commodities. Relativity diversifies not only across many successful systems but also across almost each commodity market. This, mixed with its conservative position sizing and money management, creates a system that shouldn’t only meet but far surpass traders’ expectancies.

For an exhaustive historical performance report, please visit our site at : www.RelativityTradingSystem.com

Dean Hoffman

DH Trading Systems

IMPORTANT RISK DISCLOSURES

*Risk percentages cannot be guaranteed, occasional market conditions could cause a traders stop loss orders not to be filled at the specified prices

Futures based investments are often complex and can carry the risk of substantial losses. They are intended for sophisticated investors and are not suitable for everyone. The ability to withstand losses and to adhere to a particular trading program in spite of trading losses are material points which can adversely affect investor returns.

Past performance is not necessarily indicative of future results.

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN; IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK OF ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL WHICH CAN ADVERSELY AFFECT TRADING RESULTS.

Relativity Trading System

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