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Making Sense of CFD Trading

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Contracts for Difference a.k.a. CFDs are derivatives trading instruments between two parties. There are thousands of global markets which can be traded in a CFD format. With CFD trading, you’re essentially speculating on the price movements of financial instruments. These could be bonds, FX pairs, 商品, 索引, or stocks. It doesn’t matter whether the asset prices are rising or falling – all that matters is that you call it correctly. With CFDs, you’re not taking ownership of the underlying asset – you’re simply speculating on price movements. たとえそうでも, understanding your risk vs. reward in any transaction is essential. In the United Kingdom, there is no stamp duty on profits generated through CFD trading, making this an attractive option for traders and investors.

CFD chart

Other benefits to CFD trading include the fact that it is a terrific hedging tool against losses that you suffer in physical investments. With CFDs, you don’t need to have all the money available upfront to purchase the contract – leverage and margin are used. This is a double-edged sword however since you must assume the pros and cons of leverage. If trades go your way, you will profit from leverage, and if they go against you, you stand to lose more than your initial investment. それにもかかわらず, many UK traders and European traders enjoy CFD trading since it is a flexible alternative to conventional investments.

CFDs in Action

The concept of a CFD is best understood by way of an example. At inception, you decide the number of CFDs you wish to trade. Every point movement is associated with a specific profit or loss. If markets move in your favour, you will profit off every point. If they don’t, you will incur a loss. CFDs allow traders to go long if they are bullish on the market, or short if they are bearish on the market. It is entirely possible to profit in either direction. One of the most popular uses of CFD trading is hedging. 簡単に言えば, this means that you can use CFDs to prop up your other investments that aren’t doing so well. たとえば, if you purchased Google stock through your broker and the price started decreasing, you could open a CFD trade on Google and go short on it to generate profits accordingly. その方法, you’re minimizing any potential losses through your Google stock. This is true of any asset category – indices, 商品, 外国為替, 株式, or bonds.

Any product that you trade on margin opens you up to potentially larger profits or losses. Since you are only paying a fraction of the overall cost of the trade (the contract), you don’t need all of the money upfront. Therefore it is inherently attractive to many traders. Popular CFD trading markets include the Dow Jones, the NASDAQ 100, S&P 500, the FTSE 250, the FTSE 100, the Nikkei 225, thousands of stocks, 通貨ペア, commodities like oil, copper, ゴールド, sugar, platinum, natural gas, and bond markets. According to leading CFD provider, Wilkins Finance the best CFD definition is one which explains what a CFD is, how it works, what advantages are involved, and what the current risks are. It must be borne in mind that CFD trading is a high-risk activity and is not suited to all types of traders. If you have a keen grasp of the risks of this type of trading activity, it is certainly an option worth considering.

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How to Back Test if a Forex EA is Profitable

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だから, you believe you have found a sound forex trading system or Expert Advisor (EA) and you are feeling ready to dip your toe in the water. It’s important not to rush in and instead take a step back to thoroughly test the strategy or EA through back testing.

Before we look at how to test if an Expert Advisor is profitable, first let’s look at what forex back testing actually is?

Forex back testing allows you to test the EA in order to see whether it actually does what it should do. Any forex trading system is completely useless if it doesn’t do what you expected it to do. Back testing uses historical data to enable you to see how the EA would have performed. By entering the historical data, you would be able to see which trades your EA would have recommended to you. This way you can check whether the EA is going to work for your chosen trading style and individual goals. Furthermore, this process allows you to understand in more depth how your EA works and to identify flaws in the system.

メタト レーダー 4

バックテストします。 is time consuming but it is worth it. It is important to back test in both a bull and bear market and to collect sufficient data so that you know how your EA will perform regardless of whether the market is rising or falling. Another point, is the more accurate the data you use, the more precise your back testing will be. したがって, it is preferential to use accurate historical data rather than indicative data and also use a realistic level for slippage.

Forex back testing is an essential part of developing and using a forex trading system. しかし, it is important to keep in mind that the results your back testing give you are based on past performance, which is not necessarily indicative of future performance. Back testing will help you feel more confident about the ability of an EA, but it is important to remember that no amount of back testing can guarantee future profits.

Where can I back test?

メタト レーダー 4 offers its users a Strategy Tester feature. This is simple to use and enables you to select the EA you installed from the Expert Advisor choices. For this you would need to have the MT4 platform. The most capable brokers offer their clients the MT4 platform. One such broker is Vantage FX, they are an award-winning forex ECN broker. Not only do they offer their clients MT4, but also some of the tightest spreads in the industry and unparalleled execution.

The Secret for Trading a Double Top

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The double top pattern is no doubt among the simplest and most familiar price patterns in technical analysis. 通常, a double top pattern is followed by a sell off. 理論的には, this rather simple pattern should be easy for traders to pounce on and yet, too often, it’s a cause for frustration. That’s because the realization that a pattern has formed comes too late and, as a result, there’s little room for profit. But before you become discouraged there is an effective strategy – a tactic, if you will – that will allow a trader to recognize a double top and, at least most of the time, ride on the trend reversal, just in time to profit.

Spotting a Double Top

The first part in trading a double top is spotting the double top on time. I like to call it the two-step verification.

As we can see in the chart below, the second wave has reached a climax in Point A. Seemingly, that is still a bullish sign because Point A is higher than the previous peak. But there is more to the picture than meets the eye. If we stretch a trend line from the previous top we can see that Point A signals some sort of slowdown; it is lower than Point X where the trendline indicates it すべきです be. That is the first confirmation. If the top of the wave is lower than the trendline indicates, it is the first cue that a double top might be forming.

The second sign emerges in Point B, where the wave, rather than ending in the supporting bullish trendline below it, ends much lower. That is our second confirmation.

So why do those two occurrences signify that a double top is coming? Because when the top of the wave is lower than what the trend warrants, it suggests that the price range is shifting lower. Because the wave bounced back at Point Z, it confirmed that a double top is coming and that the price range is shifting lower.

Double Top

Entry and Stop Loss

After you recognized that the double top is, 確かに, coming, the next phase would, もちろんです, be to place your entry and stop loss.

The ideal place to open a short under a double top would be just above the shoulder of the wave that signalled the double top; in the chart below this is wave one. Notice, しかし, that the actual entry comes at wave number two. This requires discipline; if the following wave does not hit our sell point just above the shoulder of wave number one, we do not enter.

The reason? We want to minimize our stop loss risk. Our stop loss should be placed slightly above the top of wave one; if we enter too early we will be forced to take more risk in our stop loss and we could end up profiting much less.

Double Top

Setting Your Target

When setting a target for your short the most important aspect to consider is the timeframe you are trading. The longer the timeframe, the higher the likelihood that the double top will lead to a significant sell off. But the shorter the duration, the higher the likelihood that what you are witnessing is part of a correction within a bigger trend.

In the above example, we are witnessing a macro trend that lasted years and thus the likelihood that a major correction will follow this double top is high. Under such a case, the trader might set his target for a full reversal.

There is one noticeable trade off in trading a double top on a long-term trend; at times, there may be several failed (single top) attempts to break higher rather than a single double top before the correction begins. That means that while the potential gain is higher it may take longer to materialize.

それゆえ, if the double top you are trading belongs to a trend that lasts several days, or even several weeks, the prudent target should be at the lowest point of wave one in the double top. This will usually correspond with the 50% Fibonacci retracement level. Since our entry has been above the shoulder of wave one, it should provide a fair gain potential relative to the risk.

結論としては, it should be noted that it does not mean that if you’re trading a trend with a shorter time horizon that you cannot expect an utter trend change and a bigger potential. What it does mean is that you are just taking the risk that it might be part of a bigger bullish trend. If that is the case, then your stop loss could be hit before the limit is reached. But once again, this is just a risk you must decide if you are willing to take for a potentially bigger profit.

もちろんです, as I always like to stress, there is no perfect strategy. It is always advisable to use indications to get some contrast on the trade you are about to take, regardless of the strategy. But if performed with discipline, and considering that a double top pattern is so common, this strategy could come in handy.

Lessons from a Decade of Trading the JPY

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The past decade has been a turbulent one for the Japanese Yen, or the JPY as it’s familiarly known. The Yen’s multi-year bullish trend which started in the 1990s ended and it flipped into a brutal bearish correction. さらに, the Bank of Japan embarked on an unprecedented journey of more and more Quantitative Easing, effectively printing trillions of Yens to revive its stagnant economy. そして最後に, let us not forget the tsunami that hit Japan’s coastline in 2011 which tragically took a very hefty toll in human lives and which sent jitters across Yen pairs.

だから, why am I dwelling on this? Because this decade of Yen turbulence has provided us with some very important trading lessons on the JPY, specifically, and on trading, in general. この記事で, I will elaborate on two important lessons for both the novice and experienced traders that I’ve learned through trading which may not be immediately intuitive.

JPY Lesson on Natural Disasters

In the period that preceded the 2011 tsunami, I was expecting a major turnaround specifically in the trend of the USD/JPY, and in the Japanese Yen, 一般的に. As I’ve often said, the longer the duration of your trade the more fundamentals will have an impact on the trend. Back in 2010-2011, I was focusing on the Japanese Yen which was in a multi-year bullish trend and so fundamentals were critical. Japan’s economy was suffering from persistent deflation and weak economic performance and that warranted a massive stimulus. もちろんです, any form of stimulus, either monetarily from the central bank or fiscally from the government, usually means a weaker currency. And so, that meant the end of the Yen’s strength and the start of a bullish trend in the USD/JPY (which moves in reverse). That meant that the bearish trend of 13 years would finally come to an end. もちろんです, that is provided stimulus would be forthcoming, which I thought was very likely.

その後、, 2007 年 3 月 11, 2011, the tsunami hit the coast of Japan. And as hysteria hit the markets, the USD/JPY plunged. Investors were crowding in to safety and speculation grew that the Yen’s long-term trend of appreciation would intensify as investors sought shelter.

The USD/JPY tested the 76 level and bounced back after a concerted effort by central banks across the world. Several months later, the pair finally bottomed out at a slightly lower level of 75. And the bullish rebound, aka weaker JPY, started in 2012.

What is the lesson? The lesson is that natural disasters in large economies, even severe ones, generally cannot change the long-term economic fundamentals and, therefore, cannot change a currency’s long-term trajectory. The JPY eventually had its trajectory to playout, すなわち. the bottom, and the rebound took place only a few months later.

That means that even a disaster of this magnitude should not change your long-term strategy. Since a natural disaster can create short-term volatility it could present an opportunity to ride a long-term trend or a long-term turnaround at a more convenient entry.

円: Leg Down Vs Double Bottom

When we look at the USD/JPY bottoming out during 2012, we can see a rather interesting pattern. Rather than a double bottom warranted after a multi-year bearish trend (bullish JPY), what we see is a bullish wave right after the last bearish wave. The intermediate zone between is uncharacteristically short and the range uncharacteristically narrow. One common mistake is just to assume we had a swift bottoming out process, but the real answer is that that is a leg down and not a double bottom.

円

The key difference between a leg down and a double bottom is highly practical from a trading standpoint. On a double bottom the rebound takes much longer, with the pair fluctuating at lower levels for longer. Once the short sellers are shaken off, the rebound begins. 反対に, in a leg down scenario the rebound is much quicker. But there is a price for that quick rebound. Because a leg down does not validate a change of trend, our prudent assumption should be that the bearish trend line should be respected and we should target Point X rather than Point M, at the peak of the last wave. 最後に, a leg down would mean another leg down is required over the long run and that means that we should be alert to a potential change over the very long run.

円

What is the lesson? A leg down means a quicker rebound but with a lower potential while a double bottom means a slower rebound but one that lasts much longer. と, もちろんです, we should always be on alert for another leg down. It should be noted, しかし, that that might take a long while especially in the case in which Point M is broken, which would signal a much wider rebound.

Using Dow Theory in Forex

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There’s hardly a trader, whether short term or long term, who doesn’t rely, in some form or another, on technical analysis. Yet many don’t know that the backstory behind what we today refer to as technical analysis is actually a collection of ideas on trading stocks. Some of those ideas are, 実際, more than a hundred years old; they are referred to collectively as Dow Theory. Going into the source, the so-called genesis of technical analysis can provide valuable lessons for a trader, even today and even in Forex. In this article I will go into some basic concepts of Dow Theory and offer my personal takeaways from it.

最初, しかし, the backstory. The Dow Theory is named after Charles Dow, a financial journalist and one of the founders of the world-renowned Wall Street Journal. Dow had written a series of articles on his theories and concepts on market behavior, pricing and patterns for the Wall Street Journal. Those ideas were later developed further, refined and enhanced by followers such as William P. Hamilton, Robert Rhea and Richard Russell. The collection of ideas known as the Dow Theory therefor, encompasses concepts from Dow and his followers.

Dow Theory Concepts

With that brief history of the Dow Theory behind us, it’s time to get into the meat and focus on some key concepts and how they could be implemented when trading Forex.

I like to think of the Dow Theory as having two pillars—one theoretical, the other practical. The theoretical concepts focus on how to approach the market, the so-called theory behind trading.

The practical ideas are focused on things such as rising tops and bottoms, which confirm a bullish trend, and/or rising volumes, which confirms a trend’s strength. Since most practical ideas belong to basic technical analysis such as stretching a trend line, I will focus on the theoretical side which is often overlooked by traders.

Combining the two pillars should give the trader the proper approach and the necessary tools to beat the market.

Concept

The Dow theoretical side focuses on the benefits of the bigger picture. 他の言葉で, it focuses on what the broad market is doing rather than a specific asset or security or, in our case, a specific pair. なぜ?

Over the longer term, the broad market cannot be manipulated by any one player. It is true that over short durations, the broad market can be manipulated, but unlike a stock or a security, over the long haul there is no one factor with enough liquidity to manipulate the long term trend. That means that in order to profit one must first gauge the long term trend of the broad market, and only then can one make a decision on the next trade.

さらに, according to the Dow Theory, the broad market prices all the knowns and even the potential unknowns that have a higher probability of occurring. 他の言葉で, the broad market is so big and diversified that the current trend and price behavior prices all the known positive and negative information as well as all that market participants believe could happen.

Dow in Forex

Although the Dow Theory was initially designed for analyzing stocks, the concepts stated above can provide some powerful insights into the Forex markets. If we refine the two concepts we get one clear idea; that is the best way to predict markets is to focus on the big picture and that means focusing on the long term and focusing on the broad market rather than a signal pair.

That means that focusing on the long term trend over months, and even years, can yield much better results than focusing on shorter durations. さらに, in a more practical sense, longer duration charts tend to be easier to analyze with support, resistance and trends much easier to define. 自ら, it is one of the key reasons that I prefer long term trades. もちろんです, short term traders can be highly lucrative and successful as well, but focusing on the long term trend is essential for crafting a strategy that could work over the long run. It allows you to identify areas of high volatility, areas where a pair is destined to have resistance, or areas where short term support can be broken.

Another important takeaway is focusing on the broad market. How does that come to play in Forex? It means that you should always aspire to analyze the big trend. In practical terms, it means, たとえば, that you should always analyze the Dollar Index before trading a dollar pair, to figure out the long term trend on the dollar. It also means that, if you trade a low liquidity pair such as the USD/BRL, you should first identify the overall trend in the FX market, risk on or risk off.

As seen in the sample below, the EURUSD is trending higher which means a bearish Dollar. But on the other hand in the second chart , the Dollar Index which represents the Dollar against a basket of currencies, is trending higher as well suggesting the exact opposite, a bullish dollar. Since Dollar index represents the big picture for the Dollar it is the one we should relate to when determining the long term trend.

Dow Theory

Dow Theory

ボトムライン

もちろんです, there are many more takeaways and more layers to the Dow Theory and it is always a good idea to go over the original books and learn from the source, whether it’s the articles by Charles Dow himself or The Stock Market Barometer written by William P. Hamilton and The Dow Theory by Robert Rhea. しかし, as an experienced trader, through the years I have found that the best takeaway from the Dow Theory is that its emphasis on the big picture improves your chances to avoid manipulation and areas of unexpected market reactions which, in turn, makes a strategy more successful. It doesn’t mean that you have to trade only over the long term but it does mean that you have to first figure out the long term before anything else.

 

Trading the Symmetrical Triangle

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I always like to say, that in any trading strategy, you should only be exposed to the market when absolutely necessary. それです, whether it’s a strategy running on daily intervals or on monthly intervals, a trader should not stay in the market longer than needed because it leaves room for the unexpected. This is especially true when it comes to momentum strategies and it can be the difference between gain and pain. The Symmetrical Triangle strategy is one that is simple and effective enough to let you gain from momentum, without staying a second longer than necessary. The strategy relies on a pattern that, no surprise, is called the Symmetrical Triangle.

Symmetrical Triangle Pattern

So what is the symmetrical triangle pattern? 簡単に言えば, it is a pattern that enables you to buy into a correction and sell before the pair peaks again.

In order to identify a symmetrical triangle pattern, we have to watch for four unique yet symbiotic conditions.

  • The pair has to be in a long term bullish trend.
  • The pair has to be in the midst of a temporary correction.
  • The correction has to be in the shape of a triangle with lower highs.
  • The momentum of the correction has to converge with the oscillator, as seen in the MACD chart below.

Symmetrical Triangle

The buy signal comes at a very specific time. That is after the pair breaks the correction pattern and oscillator (in this case, the MACD) moves back above zero and ascends into buy territory.

The symmetry of the triangle is what helps us determine our limit. The symmetry does not have to come in the shape of a symmetrical triangle on the upward move. 実際, only one element should be symmetrical—the highs. The highs from where the pair breaks the correction pattern (see point A) should be identical to the highs of the triangle.

Using the grid to measure the height, if the height of our triangle is three and a half squares we should stretch point A three and a half squares to point B.

The Idea Behind the Strategy

So what is the idea behind the Symmetrical Triangle?

To get the answer, we need to start with the end result.

The chart shows that the pair has continued above point B (which was our target), yet the symmetry rule made us exit the trade early. なぜ? The idea is that when you have a triangle break that fulfilled the aforementioned conditions it tends to generate a move higher, at least the same height as the triangle from the point of the break. 場合, たとえば, the bullish trend would have been over, the pair would have topped out a little above point B. But if we were targeting G, a higher point, and stayed too long, we could have ended up with pain rather than gain. But the symmetry method allows us to take a profit even if the pair was about to top out and reverse.

When we add the entry methodology that allowed us to enter the trade early with minimal risk the picture become clear. The symmetrical triangle is an “in and out quick” strategy that minimizes risk in both directions. The entry is right at the bottom of the correction and the exit point is distant enough to make it a worthwhile trade and quick enough to avoid a potential trend reversal.

Before You Start

もちろんです, as with any strategy, including the Symmetrical Triangle, there is no singular perfect strategy that can always guarantee profit. The major downside to the Symmetrical Triangle strategy is that the pattern does not occur every time. たとえば, in the waves that followed we can see there were no lower tops when the pair corrected, just a steep descent towards the support line. That means that the Symmetrical Triangle is a low frequency strategy—it provides an entry signal only every once in a while.

当然のことながら, that means you cannot rely on this strategy alone for profits because it may take time between each opportunity. しかし, when balanced with other strategies, the Symmetrical Triangle can certainly spice up your results and allow you to improve your trading performance each time it produces a burst of momentum.

金価格のピボットをスポッティング

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金は予測するは難しい. 多くの場合, 弱気の勢いを進めてみたいと思うとき, それは停止し、反転. また、多くの場合のみメルトダウンとそれに雄牛を運ぶために非常に強気に見えます. もちろんです, 不確実性のこの種は、取引に内在している部分であります, それは金に来る場合は特に. これは、あなたが私たちの取引を計画するために私たちを可能にすることが可能吹き出物やピボットをスポッティングに多くの労力を投資しなければならないことを意味. この記事で, 我々は、デリバティブを使用して、金の価格の正確なピボットを発見するのに役立つことができる方法に焦点を当てます.

デリバティブを通じて金価格

金で本当の問題は、それが落ちるか、急速に上昇することができますということです, 警告なしに. つまり、外国為替のペアだかのように、それは難しい、それを交換する人のための機会を発見することができます. しかし, これらのアウト・オブ・ブルーの急速な動きがあります, 多くの場合, 密接にデリバティブ市場に結びつい, 金取引のほとんどは、他の商品と同様に行われる場所. インプライド・ボラティリティについての私の以前の記事の一つで, 私は、誘導体は、比較的容易にあなたがボラティリティを監視助けることができる方法を説明しました. しかし、どのようなピボットについて? ご想像の通り: デリバティブ - または, すなわち, CMEのオプション価格は - その点でかなり便利かもしれません, あまりにも. どのように? どのような価格で私達を示すことで、ほとんどの賭けが集中しています.

ゴールドにオプションAnalyticsを使用して

CME以下 オプション解析 プットを示しています (短い) そして、呼び出し (長い) 任意の価格で金のオープンオプション. オレンジ色の列がプットされています, そして、青いものは呼び出しです - 他の言葉で, 買い手対販売. 真ん中の縦の赤い線は、現在の価格であります. 今のところ, この平均値とどのように地獄、それは私たちを助けることができるスポットピボット何をします? 非常にシンプルな. すべてのオレンジ色の列 (プット) 赤い線の左側に (現行価格) 価格が下落するのショートベットが待っています, すべての青の列しばらく (呼び出し) 価格が下落するのを待つ長いベットがあります.

見られるように 1,100 価格, ショートベットは長いベットよりも圧倒的に高くなっています. これはかなり単純な結論につながります: 金の価格は、下に交差している場合 1,100 レベル, それはすぐに短いオプションの山を誘発し、強い弱気の波をトリガーします, 私たちはから見なければならない非常に重要なピボットをマーキング. あなたは金に長い場合, 以下にブレーク 1,100 救済するための記号であるかもしれません, あなたが短い販売されている場合、一方, あなたは以下の交差して金を待つことをお勧めします 1,100 弱気の勢いは加速するために.

もちろんです, これは私達の価格の右側に何が起こるかの鏡です, どこで 1,150 上記上昇する金のために待機しているコール・オプションの山があります. あなたが見ることができます。, これは、以下のプットの山よりずっと低いです 1,100 しかし、それはまだかなりのだと私たちの上部のピボットを作ります.

赤線の左側に (私たちの現在の価格以下のオプション), 強気の賭けの多くで - コール・オプションの数がプットよりもはるかに高かった場合 1,100 - それは突き止めることになります 1,100 強力なサポートゾーンとして. もちろんです, 左側にもう一度ダイナミクス (現在の価格以上) このミラーになります. このいわゆる画面は、基本的にCMEのための本です - あなたが購入し、販売注文に自分のアカウントを見たときに同じように, これは、金の上、私たちのために全体のCMEの為替の売買のオプションを示しています. これは、より広範な市場がその賭けを配置し、ピボットを見てどこに私たちが見ることができることを意味, そして、はるかに良い私たちの次の金の貿易を計画.

 

売られ過ぎの理解

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If you are cooking something and you check on it and you see that it is “overdone” または “overcooked”, what is your immediate reaction? まさに. You take the dish out of the oven. Remove it from what caused its current overdone state and the sooner the better.

Too late for our chicken dinner below…

burned

 

What if your car’s engine is “overheated”? Same deal…you do what it takes to get the engine cooled down. Immediately stop doing what caused the engine to become overheated in the first place.

overheat

 

Given these natural reactions, it is easy to see why the initial and almost immediate move by many newer traders to an “overbought” または “売られ過ぎ” trading scenario is to do the opposite in that case as well.

They reason that since many buy (長い) orders moved price up and pushed the indicator into overbought territory, we must do the opposite and take a short (販売) 位置. 逆に, if many sell orders caused the price to drop and move into oversold territory we much begin to take long positions. It’s almost as though they expect price to snap back like a rubber band when it reaches these overextended zones.

まあ…what is instinctively the proper reaction for chicken dinners and car engines is not necessarily the proper reaction when trading.

It is important to remember that when an indicator goes into the Overbought/Oversold areas, it can remain there for quite some time. Just because the RSI or Stochastics indicator reads overbought for example, does not mean that price action on the pair is like a tightly compressed spring that is going to immediately snap back toward the Oversold area.

Let’s take a look at a historical Daily chart of the NZDJPY pair below for an example of this…

overbought chart

Notice on this chart that when Slow Stochastics went above 80 (in the red rectangle) into the overbought area, price continued to go up for another 780+ pips and Stochastics stayed overbought the entire time. Clearly a trader who went short when it first when into overbought territory would have missed out on a great move. They also would have gotten stopped out of their short position very quickly.

To see an example of where price retreats when Slow Stochastics goes into overbought territory we need to look no further than the area labeled “A” on the chart. In this case the candlesticks around “A”, dojis, spinning tops, shooting star and a hammer, indicate the potential for a pullback.

The point to be made is that いずれか scenario can play out so don’t have a knee jerk reaction to the overbought and oversold areas of an indicator.

覚えています。…

Only take entry signals from an indicator that are in the direction of the longer term trend.

たとえば, if the trend has been strong and prolonged to the upside, it stands to reason that the indicator will be in overbought territory since it reflects the bullish push of price action. To take a short position at that point would to trade に対して the trend and that would be introducing more risk into the trade.

良い取引,

リチャード ・ Krivo

RKrivoFX@gmail.com

@RKrivoFX

最大レバレッジを使用して利益を成長し、リスクを軽減

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The gains can accumulate quickly when a prop trader is using a strategy based on maximum leverage with limited account size. In order to preserve and build those gains, it’s important to remove them from the trading account according to a good plan.

As described in previous articles in this series, the high-leverage, low-balance strategies used by leading prop traders can be applied to multiple trading accounts using different systems, with each account capitalized by not more than a couple thousand dollars.

The amount in the account typically ranges between $1,000 to several thousand dollars. その方法, there’s no psychological obstacle to using the max leverage on each trade.

Reduce the risks from drawdowns

When you have a winning system, profits pile up. It’s tempting to “let it ride” by using the same system to trade ever-bigger position sizes in the growing account.

しかし, when the entire capital is available in the trading account, it means that the capital is exposed to the inevitable system “blow up,” which typically causes a steep drawdown. Even if the trader escapes financial catastrophe, he or she may become so risk-averse afterward as to become indecisive and ineffective.

Pull money out each month

The smart way to avoid excessive drawdowns due to trading system “blow ups” is to pull money out of the account at the end of each successful month. その方法, when a major drawdown occurs, it won’t take all your money, just the couple thousand dollars that you can afford to lose.

Successful prop traders like Shaun sweep the profits out of each winning trading account monthly and move them into a non-trading account, where they remain safe. だから, each month the trading accounts open with their individual capitalization set at a given amount.

Pull out at least enough to cover one “blow up”

Once you’ve launched your forex system, you’ll want to think about earmarking enough money to cover at least one trading system failure. After you’ve secured that amount to be used for a recapitalization of your trading account, every subsequent gain is “free money,” at least in a psychological sense.

The first milestone is to pull enough money out of the trading account to cover at least one catastrophe. If you’ve been enjoying mostly winning months, next you should allocate 50% of your profits for high-risk systems.

You can’t lose what’s not at risk

覚えておいてください: When a prop trader is using maximum leverage, the only money that’s safe is the money already pulled out of the trading account. Profits should be pulled from each winning trading account, each month.

When a prop trader wins consistently using high leverage with a limited-size account, the gains from relatively small individual trades may compound quickly. Profits gathered from the overflowing small trading accounts can compound into large sums, and it’s important to manage those profits effectively.

If you’d like to learn more about using maximum leverage to pull profits each month, just contact Shaun.

極性発振器で封鎖

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The forex blockade trading strategy is one of the simplest ways for disciplined independent traders to profit from currency price moves. It’s a great strategy for mechanical trading systems because it relies on a polarity oscillator and only a few other indicators and parameters, which can easily be programmed. It’s well suited for trading on 5-minute time frames.

すべてのベスト, when the blockade strategy is traded in combination with the related reversal strategy, experienced traders can profit by “scalping” the polarity oscillator.

The forex blockade strategies use the twenty-day exponential moving average (20 EMA) by itself or in combination with the middle Bollinger Band, as a polarity oscillator to indicate likely test and retest price levels. Depending on the market, this combination usually provides the mechanical trading system with the most accurate assessment of forex blockade points.

polarity

Traders should also look for confirmation of signals from nearby round-number price levels, ピボット ポイント, and support and resistance.

This strategy is called a “blockade” because the 20 EMA or polarity oscillator acts as a price barrier on either side. If the price is over the EMA and staying above it, and then the price retests the EMA, it will probably bounce off and continue higher.

同様に, if the price is under the 20 EMA and then retests it, the trading system’s bias is “short” and the price will probably reject and move lower.

Trading blockades using the polarity oscillator

A typical polarity oscillator combines the EMA and the Bollinger middle band together. On the charts accompanying this article, the 20-EMA is shown as a solid yellow line, while the combined polarity oscillator appears as yellow streaming. たとえば, on the chart below, the circle shows a bullish signal at the polarity oscillator.

Blockade example

もちろんです, the retest of the 20-day EMA is the meat of the signal. Using the polarity oscillator as a combined EMA-Bolly Band indicator increases reliability of the signals, and gives forex traders a clearer picture of the market.

Below are more sample charts showing the forex blockade strategy:

Blockade strategy example 2

Blockade 3 example

Blockade example 4

Changes in polarity and bias

At the far right side of the chart above, if the currency pair price convincingly closes above the 20 EMA, this means it has switched polarity and the trading system now changes to a long bias.

Going forward, the mechanical trading system will be prepared to sell when the currency price drops down and touches the 20 EMA.

When to trade the blockade

The forex blockade strategy can be applied to any currency pair. It can be traded on any of several time intervals, yet some of the most-successful blockade traders work on 5-minute time frames.

と, this strategy can be traded anytime during the trading session, but some time ranges offer more reliable trades. 例として, there may be a good breakout and retest, so the forex trader enters the trade.

まだ, the afternoon session in Asia may be very slow. その後、, at the opening in London prices may be too volatile for entry. 最後に, after the initial flurry of volatility from news announcements, the price may settle so that it’s once again tradable.

だから, the trader must adjust the forex blockade strategy to fit each market and session.

Time of day

For best success, the forex blockade strategy should be traded during the optimal liquidity times. The time-of-day in a particular currency market is critically important: The blockade requires liquidity, so it’s best applied when the major trading centers are most active.

In Asia, the best times to trade the forex blockade are after Tokyo and Singapore begin trading currencies. と, when trading during the European session, both London and Frankfurt should be open before entering any trades.

Basic trading rules for the blockade forex strategy

• Establish trend or bias using the 20 EMA or other polarity oscillator

• When price is comfortably higher than the polarity oscillator indicator, the trend is bullish

• When price is trading lower than the indicator, then the trend is bearish

• The price tests the polarity indicator, then rejects it and moves away

• Once further confirmation is shown through nearby round-number price levels, ピボット ポイント, or support and resistance, 取引が入力されます

• Enter trades by using buy-stop or sell-stop orders set one or two pips in front of the price

• It’s best to set the stop-loss order above the polarity indicator for sell-stops, and below the polarity indicator for buy-stops

• Set the profit target at twice the amount at risk on the trade

• Once the price reaches a profit amount equal to the initial risk, move the trailing stop to break-even

How to quantify a successful retest?

If the currency price is over the 20 EMA it must rebound from and remain above it. と, when the price is under the EMA, it must bounce off and remain below it.

For programming mechanical forex trading systems, the signal rule is: The first candlestick to touch the 20 EMA is expected to close on whichever same side that it originally approached from.

This first candlestick is the trading signal. Once the price has rejected away from the 20 EMA, the trading system waits for a possible confirmation by the next candlestick. If the candlestick of the next time period shows a continuing move away from the 20 EMA, the trade signal is confirmed.

The more confirmations of a forex blockade, 良い

The mechanical forex trading system should use multiple confirmations before entering any trade. Beyond relying on the retest and rejection at the 20 EMA to show blockade, this strategy is more reliable when several other indicators and parameters are used. These include confirmations such as nearby round-number price levels, ピボット ポイント, and support and resistance levels.

It’s important that the mechanical forex trading system never take a trade based purely on a price rejection from the 20 EMA. 理想的には, nearby support and resistance levels, round-number price levels, and any other significant price point should also confirm the direction and timing of the trade.

Forex traders should also be careful to filter out the effects of pending business announcements and news. Successful forex blockade traders often decline trades within thirty or forty-five minutes before a scheduled press conference or news announcement, and wait at least fifteen minutes after the announcement before considering whether to accept trades.

同様に, the reliability of a winning outcome is enhanced if the forex blockade trade is in the same direction as the current trend. This can be determined according to which side of the 20 EMA or polarity oscillator the currency price is currently located on.

Entry qualifications and orders

Qualifications

• The price is trending – It breaks out of a range or consolidation before the entry signal

• The price successfully retests the 20 EMA

Orders

Some forex traders divide their entries across two or more orders so they’ll have more flexibility, while others simply place a single entry order.

For long entries, using multiple entry points:

• Place 2 buy-stop orders at an entry point 2 pips above the high of the confirmation candle;

• Set orders to expire at the beginning of each new candle. だから, たとえば, when trading based on a five-minute charting time frame, if limit orders are set they will expire at the beginning of the next five-minute candlestick unless triggered by price action during the current five-minute candlestick;

• Place the stop-loss orders 2 pips under the signal candlestick, which was the one that touched the 20-day EMA;

• The stop-loss orders can also be placed just behind a nearby swing point or support-resistance level;

• When trading multiple orders at the same entry price, set the profit target for the first order at the equivalent amount of the risk in pips. だから, たとえば, if the forex trader’s total risk in the trade is 20 ピップ, the profit target for the first order is set at the same 20 ピップ;

• The profit target set for the second order is calculated at double the risk in pips. 上記の例を続行, the profit target for a second order would be 40 ピップ;

For short entries, with multiple entry points:

• Place 2 sell-stop orders at an entry point 2 pips below the low of the confirmation candle;

• As with long trades, for short entries forex traders should set the sell-stop orders to expire at the beginning of each new candle;

• Place the stop-loss orders 2 pips over the signal candlestick, which was the one that touched the 20-day EMA;

• The stop-loss orders can also be placed just behind a nearby swing point or support-resistance level;

• As with long entries, profit targets are set at an amount equal to the total risk of the trade expressed in pips. だから, if the forex trader’s total risk in the trade is 20 ピップ, the profit target for the first order is set at the same 20 ピップ; と, the profit target for the second order is set at double the total risk in pips;

Trailing stops to achieve profit targets

Once the currency price has moved favorably by a total amount equal to the initial risk, the first position has reached its profit target and is closed out. 同時に, the mechanical trading system changes the stop-loss order on the remaining position to the break-even level.

Continuing the same example above, once the price has moved 20 pips in the favorable direction, the first position is closed and the stop-loss on the remaining position is set at the next increment.

The remaining position’s trailing stop is left at the break-even point until the marketplace closes out the trade, either by achieving the next profit target or by triggering the stop at break-even level. Regardless of the performance of the second position, the first position’s gains are a significant prize.

Blockade reversal

The blockade reversal is a variant of the forex blockade trading strategy. It likewise uses a polarity indicator such as the EMA or a combined 20 EMA and Bollinger middle band. The variant trades currencies based on crossovers of the two indicators combined in the polarity oscillator. On the charts here, the oscillator is shown as a contracting or expanding yellow band.

In a blockade reversal, the price will stall, reverse its direction, and pass through the polarity oscillator before finally returning to retest the oscillator from the other side.

On the chart below, the Asian session (shown in blue) experienced a gradual price drop below a fairly narrow band, after failing at the day’s central pivot (the yellow line) earlier in the trading session.

The price then continued downward, slicing through the weekly pivot (ブルーライン) before stalling and reversing at a nearby round-number price level (the gray line).

Blockade reversal

Blockade Reversal

次, the price moved indecisively until the end of the Asian session, when a final surge from below the polarity oscillator pushed the price toward the round-number level. This represents the level at which the 20-day EMA and Bollinger middle band would cross over.

On the chart above, the left-side circle shows a bullish entry signal. The right-side circle shows another bullish entry signal with a close above the current price range, indicated by the white line.

Differences between forex blockade and blockade reversal

The forex blockade strategy involves waiting for the trend confirmation, then trading price bounces off the polarity oscillator in the same direction as the trend.

The blockade reversal strategy comes into play once this trend finishes, and the price reverses and closes on the opposite site of the polarity oscillator.

Both of these two related strategies are traded in the same direction as the current trend, which is determined when the currency price closes on the particular side of the polarity oscillator.

Blockade bearish reversal

Bearish Reversal

The previous example showed a forex blockade reversal traded with a bullish expectation. The above chart shows the opposite scenario – A bearish trade entered from below the polarity oscillator.

現在の例では, the upward move has ended and the price has broken down and closed repeatedly under the polarity oscillator. A bearish technical signal (circled) occurred below the polarity oscillator.

Scalping the polarity oscillator

Deploying both the forex blockade and blockade reversal strategies together during the same trading session can help bring trading success during long periods of time when prices are range-bound. Savvy traders use both strategies together as an EMA-scalping strategy.

Forex blockade crossover strategies

As with the basic forex blockade strategy and the reversal variant, a variety of related blockade crossover strategy can also be developed with the power of expert advisors (EA) and mechanical trading systems programmed to watch for currency prices to break out of channels and trend strongly. Because of versatility, forex blockade trading provides a profitable opportunity to “scalp” the EMA and other polarity oscillators.

Do you use similar strategies in your own trading?