Posted on October 27th, 2008 by admin, under online forex trading.

Forex trading strategies example (part 2)

Let’s continue our discussion of Forex trading strategies that can be used as an independent system. Today we will discuss two more Forex trading strategies.

Trading strategy using Stochastic

Though there is an opinion that it is bad to determine the turning points, stochastic index at large intervals does it quite fairly. I do not recommend to use it for 5-60 minutes, or it is necessary to increase the number of periods (Stoch (35), Stoch (55), etc.) I tried stohastik with the period 14 (by default). According to this system entrance is made after a level crossing signal in the direction of the crossing. The levels are determined by trader since a week-long trend is descending, the lower lath is taken (8) and the upper (75) (by the way it can be slightly higher, input will be even sooner, but not more than 78-80!) Stop must be set rather flat, on percent from the deposit (such as 1.5 from 100K i.e. by 150 pips). Profit can be taken off either at target a*stop where a is coefficientfrom 1 up to 4 (your choice) or on by any other signals (parabola) or the target levels, or sliding stop. On adjustment you can play with signal levels, stochastic period, and also include a short while crossing moving (it is usually always built together) behind the signal level.

Trading strategy of game using Fibo-levels

This is one of the most wide-spreaded systems based on the fact that the price, being corrected, will be a distance equal to the movement multiplied by the coefficient 0.236 0.382 0.5 and 0.618. I Can add that 0.5 and 0.618 meet more often than the rest ones… The signal “get ready” occurs when, after a lengthy movement the price was corrected not less than 0.2-0.3 part of this movement. Fibo-levels are drawn, and warrants on sale/purchase about them, with stop above a following fibo-level are established.

For example: After yen’s falling from 107.15 to 105.20 we draw fibo-levels. (Also we will draw level after falling from 106.70 to 105.20). After correction beginning we set a warrant for the sale of nearly 0,382 correction from a large falling (of almost exactly the same as the 50% correction smaller falling). So Sell USDJPY 105.95, Stop is above 0.5 from a large falling, by 106.30 …

The level has appeared punched and following order is selling about 0.5 from a large drop (note that the level is almost coincided again with a fall of 0.618 less) So, Sell is USDJPY 106.15, S/L 106.50 At this time, level of 50% correction sustained (in this case match of 2 levels in one place has given strong support to bears.)

That is what we have in the future:

The first red arrow indicates the point of entry. Almost 2-day consolidation has followed then. After that, accordingtoo all laws of a genre, falling has continued. The second arrow is indicates re-entry into the market after the correction, which ended precisely about the previous low.

Good luck to you!

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Forex trading strategies example (part 1)

Posted on October 22nd, 2008 by admin, under online forex trading.

Forex trading strategies example (part 1)

We want to present you Forex trading strategies that can be used as an independent system, and in combination with other trade policies, or as the basis for a strategy. In any case all represented is a purely subjective opinion and cannot be treated as the “philosophers’ stone” for Forex.

Forex trading strategy using Bollinger Bands (35,2)

The idea is that once the prices will cross one of BB lines, tracking begins, and as soon as next candlestick being closed, will not punch the BB line, entrance in the direction opposite to breakdown.

Depending on desire, may vary period BB (in our case it was equal to 35), time scale (in our case - 4h) as well as confirmation from other indicators. For example RSI.

Forex trading strategy using game on levels

Here the idea is that the price having once reflecting from some point, will reflect from it again, and if it will pass it, the acceleration will be enough to play in the direction of the breakdown. The figure shows the level of yen, arrows show the direction of the game, the lines around them — a lath stop loss, at whose breakdown position automatically deploys.

As acknowledgement of breakdown or rebound from levels it is possible to use: rebound — if the price was a long way to the top without a correction, on the other movements. Breakdown — the price often “poke” in the level, gradually approaching low rebound (see figure).

Forex trading strategy using Moving Average

Even at the simplest indicators it is possible to build a profitable system. This example has 2 movings with periods of 21 and 70. After the breakdown one of movings by the price standby begins. If prices turned, without having reach the 2nd (older) moving, the entrance is carried out at crossing (or a little earlier), MA (21). Stop-loss is places below a recent bottom (peak). The system has drawbacks - one of them is the false signal at the trend end. However, incomparable advantage is that it always follows trend, contrary to the wishes of inexperienced players to play against him.

Forex trading strategy using MACD

One of the easiest ways to play with a trend. On the graph MACD 12/26 with a signal line 7 is used. The entrance is carried out: For Sale — at movement MACD from a maximum downwards, at care of MACD below a signal line.

Pose closing occurs at MACD the crossing signal line upwards. At achievement of low bottom by MACD, with the closure of the next “Short” a long (turn) opens and now pose will close at crossing MACD signal from the top to down, and will open at crossing from below upwards. And again, until formation of top by MACD… Stop is at a price slightly above recent high (low). The system works well in bright trend on 4-hour or daily, but majority advises to abandon MACD on Flat. Nevertheless, it is possible to play for MACD in range also. To do this you need a 15-30 min interval, and slightly other parameters of signal linesand MACD. I suggest you to play with coefficients and see what will be after. This tool has several hidden features starting from the divergence method finishing to usage of ostsilators over the MACD itself. Everything depends on the willingness of the trader to find his own weapon…

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Automated Forex trading system

Posted on October 10th, 2008 by admin, under online forex trading.

Only effective Forex trading system with successful money management strategy can help to make stable revenues on Forex market. This is because only good Forex trading system explains what and when should be done on the market in any trading situation.

When traders use Forex trading system and have to take a decision: they save time and efforts only when they know what actions will prevent them from risking the traded capital and what actions must be done for maximizing trading income. This is what a good Forex trading system gives - set of effective rules to make more money on Forex market.

Such comprehensive set of rules making complex algorithms can be used in autotrading system i.e. system that allows you to trade on your account automatically by means of computer software. Automated Forex trading systems are pre-programmed strategies that automatically execute trades on your account based on the rules of one of the Forex trading strategies. Automated trading systems can run on your home computer, on hosted servers, through autotrading platforms or as managed accounts.

SLP Trading Group

http://shop.profxtools.com

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Standard exit strategy (SES)

Posted on June 26th, 2008 by admin, under online forex trading.

The standard exit strategy (SES) was used throughout the tests of entry methods. Basically, the SES employs a money management stop, a profit target limit, and a market order for exit after a specified amount of time. The examination of this strategy provides a baseline against which variations and more complex exit strategies may be judged.

WHAT IS THE STANDARD EXIT STRATEGY?

Although the standard exit strategy is basic and minimal, it does incorporate elements that are essential to any exit strategy: profit taking, risk control, and time exposure restraint. The profit-taking aspect of the SES is done through a profit target limit order that closes out a trade when it has become sufficiently profitable. The risk control aspect of the SES is accomplished using a simple money management stop that serves to close out a losing position with a manageable loss. The time exposure restraint is achieved with a market order, posted after a certain amount of time has elapsed. It closes out a languishing trade that has hit neither the money management stop nor the profit target.

CHARACTERISTICS OF THE STANDARD EXIT

The standard exit was intended to be simply a minimal exit for use when testing various entry strategies. As such it is not necessarily a very good exit. Unlike an optimal exit strategy, the standard exit is unable to hold onto sustained trends and ride them to the end. In addition, a profit can be developed and then lost. The reason is that the SES has no way of locking in any proportion of paper profit that may develop. A good exit strategy would, almost certainly, have some method of doing this. After having made a substantial paper profit, who would want to find it quickly vanish as the market reverses its course? The fixed time limit also contributes to the inability of the SES to hold onto long, sustained moves, but it was a desirable feature when testing entry strategies. Finally, the SES lacks any means of attempting to exit a languishing trade at the best possible price, as might be done, e.g., by using a shrinking profit target.

On the positive side, the SES does have the basics required of any exit strategy. Through its money management stop, the SES has a means of getting out of a bad trade with a limited loss. The limit order or profit target allows the SES to close a trade that turned substantially profitable. Using the time limit exit, the SES can exit a trade that simply does not move. These three features make the standard exit definitely better than a random exit or a simple exit after a fixed number of bars.

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