November 2018 – Trading POC

Learning To Trade Overnight Trading Range Breakouts

Posted on November 29, 2018 by blogger

Trading breakouts is one of the most tried and tested methods of trading the forex markets because when the price breaks out of an established trading range, it often continues to move strongly in that direction. Therefore there are some excellent profits to be made.

There are lots of different ways you can trade breakouts. You can wait for a quiet period of the day for instance when the price is barely moving and is confined to a very narrow range, and wait for a breakout to take place, or you can use bollinger bands and wait for them to narrow because this often precedes a strong breakout. However in this article I want to talk about a particular strategy that involves opening ranges.

I’ve been experimenting with this strategy on the GBP/USD and EUR/USD pairs recently and it seems to work very well. What you basically do is to look at the opening hours between 00.00 and 06.00 GMT (or 08.00 if the price is still within this range up until this time) and draw two horizontal lines marking the high and low points for this period.

Then you simply wait for the price to break out and close above (or below) one of these lines and take a corresponding long or short position. This method works well when there is a narrow opening range and the reason it works is simple. Every pair has an average daily range (the GBP/USD is roughly 220 points and the EUR/USD is roughly 180 points according to 2008 figures) so if the opening range is a small fraction of this number, then you know that there are a lot of points to be made either above or below the current opening range.

It’s not a method that can be used every day on a certain currency pair because sometimes the price will move quite substantially in the opening few hours, but it’s well worth putting into practice when the opening range is very narrow.

There are various ways you can actually trade this system. You can either jump in as soon as the breakout bar or candle closes, or if you want to place the odds substantially in your favour, you can wait for an initial breakout followed by a pull-back into this trading range, then trade the subsequent breakout (if there is one) because this continuation pattern is a very profitable signal.

Either way you should find that these strategies (or variants of these strategies) are generally very effective because the price will very often move strongly out of this opening range at some point during the day.

Currency Swing Trading – An Forex Trading Strategy Perfect For Novice Traders And Triple Digit Gains

Posted on November 26, 2018 by blogger

Currency trading is ideal for novice traders because it’s simple to understand, exciting and can make huge rewards. You can learn and put together a currency swing trading strategy quickly and easily and we will show you how in this article.

Swing trading requires far less discipline than long term trend following and profits and losses are taken quickly; because most traders lack discipline this is an ideal method for beginners and also the odds are better than day trading or scalping, because within a day all volatility is random. Let’s look at the logic of swing trading in more detail.

Currency markets move in the long term to the supply and demand situation but humans are emotional and the emotions of greed and fear, push prices to far up or down and then the market returns to more realistic values. The swing trader will aim to sell into these overbought and oversold areas and take profit when the market has corrected but how do you swing trade?

The first point is to keep your strategy simple, you only need to look for short term price spikes, look at some momentum oscillators to see if prices are overbought (or oversold) and look for support or resistance to hold then, wait for momentum to turn up or down into the level and enter your trade.
You should always set a target and take profits quickly – this style of trading is “hit and run” and it’s aim is to bank profits quickly.

What momentum oscillators should you use?

There are plenty to choose from but popular ones are the RSI, Stochastic and MACD.

A Simple Swing Trading Strategy for Big FX Profits

To show you how simple swing trading can be, below find a simple strategy which I use which works and we will look at it in relation to a currency which is overbought and it only uses one indicator – the stochastic:

– Draw a line on a daily chart across the highs of the stochastic.

– Wait for the stochastic to approach this resistance and normally it will normallybe overbought in the 90 area

– Pick a level of resistance above the price and place your stop behind it.

– Watch for stochastic momentum to wane and sell the currency.

– Place a time stop of 1 or 2 days for the stochastic to follow through to the downside with bearish divergence – if it doesn’t liquidate the trade, if it does look for your target.

– Look to take your profit before support – don’t wait for a test of the level in case there is a recoil – get out early when the risk reward is in your favour.

You can do this in the major currencies but also use cross rates which can offer some fantastic swing trading opportunities.

The above is a very simple system and it works well. Of course, there are many swing trading strategies you can use and if you do some research, you will find the right one for you. Keep in mind that simple strategies work best, so use a maximum of 3 indicators and keep your system simple and robust.

Insider Trading 2.0 What It Is And How It Works

Posted on November 23, 2018 by blogger

The traditional definition of insider trading involves the buying and selling of a security while in possession of material, non-public information about that security. A simplified example of this is the following: the CEO of Company A learns from the CEO of Company B, prior to its public announcement, that Company B will be acquired by Company C. Knowing that the share price of Company B will likely rise following the public announcement of its acquisition by Company C, the CEO of Company A buys shares of Company B with the intent to resell the shares for a profit after the acquisition announcement. Insider trading is illegal because it provides an unfair advantage to investors who trade securities based on market-moving information that other investors do not have access to. Insider trading also causes a distortion in market prices since insider trading makes it increasingly difficult for markets to reflect all available information.

Recently, there is a new kind of conduct being scrutinized by the SEC, CFTC, and FBI that is now known as “Insider Trading 2.0.” However, this kind of conduct does not precisely fall into the traditional definition of insider trading described above, and is therefore not currently prohibited by law. Insider Trading 2.0 involves the use of high frequency trading (HFT) to execute trades based on non-public information that investors obtain access to within fractions of a second of such non-public information becoming publicly available. For example, until it agreed to discontinue this practice, Thompson Reuters used to sell investors access to the University of Michigan”s economic surveys, considered to be market-moving information, five minutes before these surveys were publicly disseminated. For a larger fee, customers could even obtain access to these surveys two seconds before those who paid for the five minute early access. Customers who paid for the earliest access to these surveys would trade extensively using HFT within the two second window before the market began to reflect the information in the surveys as they became available to the five minute early access customers and then eventually to the whole public. While this trading practice often involves a lawful sale of information (unlike traditional insider trading, which typically involves a misappropriation of non-public information that is in breach of the insider”s fiduciary duties), it has been condemned by New York Attorney General Eric Schneiderman as an unfair trading practice that distorts the market. New York Attorney General Eric Schneiderman”s remarks on Insider Trading 2.0 have been influential enough to make certain companies take action. Both Two Sigma Investments and BlackRock have agreed to end issuing and collecting certain surveys designed to gather stock information from analysts, which reflected non-public information regarding the analysts” sentiments pertaining to forecasted earnings estimates and other financial information. Similarly, and as alluded to above, Thompson Reuters agreed to suspend its early release of the surveys it receives from the University of Michigan.

There are other HFT practices in addition to the kind described above that have also raised concerns. For example, there is a concern about “latency arbitrage”, which occurs where investors use HFT to step head of other investors in order to have their trades executed first. This practice results in the investors who were cut in line having to buy/sell at a higher/lower price due to the HFT activity that occurs while their orders were still pending. By contrast, the investor using HFT to commit latency arbitrage ultimately profits by buying or selling once the pending orders of other investors are executed and prices adjust. This kind of market manipulation is very similar to front running, which is where brokers trade ahead of their clients” orders. Front running is prohibited under FINRA Rule 5320, however the Rule does not apply to HFT firms that are not acting on behalf of a client and are only trading for its own accounts.

Another HFT practice being investigated is known as “layering” or “spoofing,” in which a trader sends out an extensive amount of orders to create a faade of trading activity in a security in order to stimulate other investors to buy or sell, only for the trader to cancel the orders and profit from trades based on the artificially inflated or depressed prices. Similarly, traders using HFT have tried to gather information about the flow of stock orders by “pinging” different markets with multiple orders to determine whether any will be filled, and using that information to gauge the direction of a stock (most of the orders placed for pinging are canceled). There are concerns over the extent to which these practices constitute an unfair manipulation of the market.

Ultimately, the concerns over HFT practices are manifold. First, the HFT practices described above compromise the competitiveness of the market and distort market prices. Second, by diminishing the competitiveness of the market, investor confidence declines since there is an increasing perception that the market is rigged for HFT firms. Third, HFT practices have the potential to cause substantial market volatility. For example, the term “flash crash” was born on May 6, 2010, when during an already turbulent day for the market, the Dow Jones lost about 600 points in five minutes following a flurry of high frequency trading activity that caused the market to spiral out of control.

While many HFT practices dubbed Insider Trading 2.0 are not yet illegal, the use of HFT is being investigated by the SEC, CFTC, and FBI. Fund managers using HFT practices should be aware of the current scrutiny being placed on such practices and should seek advice on whether such practices may constitute an unlawful manipulation of the market.

How to Overcome Negativity in Trading

Posted on November 19, 2018 by blogger

Trading the Financial Markets can be a roller coaster ride. If you hit a bad patch and find it difficult to recover, then hang in there. But you need to learn to accept that bad trading results are part and parcel of trading and trading development. In can be tiring and once you are drained of your energy, very often, what is left is only a big portion of Negative Energy or what I call Negativity.

In trading and many things in life, Negativity is a dangerous thing to have. It is worse in trading because this is a lonely activity. Family and friends are normally sceptical about this career and, hence,traders lack the support from them.Here are a few examples of the issues that can be cause by Negativity:
Start of a Negative Belief Cycle. Eventually, in a worst case scenario, you might even stop your trading career.
Cause of more negative emotions which leads to negative trading results.
Cause of lack of desire and motivationto excel or recover With that, I hope to share with you some of the lessons that I have learnt in the past to over come negativity. Recalibrate your Emotions Instead of letting your negative emotions go viral (which is the start of the Negativity cycle), you need to (1) accept your emotions (negative AND positive emotions) and be fully aware of what you are going through. Remember that we are supposed to be emotionless? Since that’s often a difficult task, the next level down is to be fully aware of it and to take note of the actions that are churned out of these emotions.

Once, you acknowledge that emotions exist and you are aware of your reaction towards them, you need to (2) let go of them and recalibrate yourself.

For me, I like to read the article by Mark Douglas on the -5 Fundamental Truth about Trading- (see article). I know other traders who would shut down their computers and head to the gym. Meanwhile, others would find their own little way of doing it. For other methods, do read myarticleon “5 Simple Control Mechanisms” (see article).

The biggest problem with having strong emotions (be it over-confident or fear) is that it tricks you into making irrational decisions. Hence, the earlier you recalibrate your emotions, the better. Just do it In the book -Hedge Fund Masters- (see book) by Ari Kiev, he interviews many top traders and analyse them in various ways. One of the conclusions from his interview was this

-Your Own Thinking is the source of you Anxiety- This is absolutely inline with the phrase -Paralysis of Analysis-. Hence, the only other way to overcome this problem is to keep things simple and Just Do It.

For example, when you see a trade, the chances are you know if it meets your rules within 3 minutes of your analysis. However, some traders have a tendency to re-analyse the same trade for 5 times before making a decision.On the contrary, when you over analyse, negative thoughts and images start filtering your mind. In the end, you start becoming emotional and your decisions become irrational. Fine, this might be somewhat of an exaggeration, but I think you get the point.

Note: Do not confuse -Just Do It- with rushing over it. Trading is simple, if the set up meets the rules, take the trade. Done. Find your Mojo Mojo or self-confidence is crucial for your eliminating negativity. When traders are confident about what they are doing, they do not hesitate their actions nor do that worry about their results.

The key to finding your mojo is practice, practice and practice. If you keep practicing, you are indirectly building your positive belief cycle. They more you do it, (1) the more you belief in it, (2) the more effort you will put into it, (3) the bigger the actions will be, (4) the better the result and (5) the more it will reinforce your initial belief.

And that is the how you can continue to build positivity and eliminate negativity. Conclusion A trader once told me that making money from trading is not a question any more. The real question is “How much will I make and how can I be better?”

That is the kind of attitude that all traders should have – Positivity. To get there, the first thing you need to do is to eliminate any possible Negativity.

Thank you for reading and happy trading!!

Acm Your Online Forex Trading Solution

Posted on November 16, 2018 by blogger

ACM: Your Online Forex Trading Solution

If you are actively trading in the New York Stock Exchange, one of the most active exchanges in the world, you should be very thankful. Its total daily transactions are averaging approximately at U.S. $50 billion, making it the largest stock exchange in the United States in terms of dollar volume. There are many individuals who want to get their feet wet on the ground of this New York City-based stock exchange.

Yet, you are luckier if you are actively involved in trading foreign currencies, or commonly known as Forex trading, which is considered to be the largest market on the world. Its average daily trading turnover is approximately U.S. $2 trillion, exceeding the combined magnitude of all other equity markets, including the New York Stock Exchange. Thus, you are luckier since you have the opportunity of getting more profits out of that $2 trillion traded everyday.

If you are not yet involved in Forex trading, then you are currently missing the benefits of trading foreign currencies24 hour trading time, transactions conducted in real time, extreme liquidity, and others. Thus, you should decide to get a Forex trading account and start trading right away.

However, just like other types of investment, you must be aware of what kind of ground you are stepping into. In other words, before getting a live Forex trading account, you must be properly educated first about the background of Forex trading. You must learn how you will maximize your earning potentials as well as decrease the risk that you are into through practicing with free demo accounts. Moreover, you must have a trading system to follow and the necessary tools that will help you analyze varying conditions of the Forex market to position yourself on the profiting aspect of a certain trade.

Once you know what you are getting into, you are now ready to get your live Forex trading account, web-based trading system and platform, and other tools that you will need in your Forex trading career. Most neophyte Forex traders obtain their trading accounts and platforms through a Forex brokerage company or agents. There are many brokerage firms out there and you need to be selective, or else you will suffer the adverse consequences.

If you are still uncertain which Forex trading company you will trust in the early start of your Forex trading career, why dont you try ACM Forex? They probably got what you need and at the same time the key towards the success of your Forex trading career.

ACM Forex stands for Advanced Currency Markets Forex, a Swiss-based online Forex trading company that is founded in the city of Geneva, Switzerland in 2002. Since it was founded on that year, ACM is now one of the major Forex institutions, particularly in online day trading, with an average monthly trade volume of U.S. $70 billion. They offer their clients quick access to the speculative Forex market through online dealing platforms that allows forward and stop trading of 27 pairs of foreign currencies as well as of several precious metals.

If you will open a live Forex trading account with ACM Forex, you will receive several benefits such as the following:

WYCIWYG or what you click is what you get advantage. It means that the price you clicked on at the start of the deal will be the price you are executed at, thus no single movement on the foreign currency price.
NRFQ or no request for quote. You can click on any live streaming price list and there are no requisites even on fast markets. Expect that there will be no dealer intervention and timers.
There will be no commission collected for every transaction that will be completed using the ACM Forex trading platform. All profits will go to your pockets and not to somebody else.
You are allowed to have multiple online trading platforms for maximized trading flexibility.
With ACM Forex, your risk is only limited to deposits or funds. Thus, you will never owe more than what you have invested in your Forex trading account. This means that there are no negative balances, whatsoever.
You can open a live Forex trading account for as low as U.S. $5,000.
There are 27 pairs of foreign currencies that you can trade within several clicks.
You have access to 24-hour foreign currency trading and technical support services even on weekends.
There are no confirmation delaysonly instant and real time trade executions.
Secured online trading platform.
Technical analysis and real time charting tools for your market evaluation tasks.

With ACM Forex, the start of your Forex trading career is as good as a veteran trader. A good jump start and continuous success awaits you in ACM Forex.