Stocks vs. Futures vs. Forex - The Balance

Some trading wisdom, tools and information I picked up along the way that helped me be a better trader. Maybe it can help you too.

Its a bit lengthy and I tried to condense it as much as I can. So take everything at a high level as each subject is has a lot more depth but fundamentally if you distill it down its just taking simple things and applying your experience using them to add nuance and better deploy them.
There are exceptions to everything that you will learn with experience or have already learned. If you know something extra or something to add to it to implement it better or more accurately. Then great! However, my intention of this post is just a high level overview. Trading can be far too nuanced to go into in this post and would take forever to type up every exception (not to mention the traders individual personality). If you take the general information as a starting point, hopefully you will learn the edge cases long the way and learn how to use the more effectively if you end up using them. I apologize in advice for any errors or typos.
Introduction After reflecting on my fun (cough) trading journey that was more akin to rolling around on broken glass and wondering if brown glass will help me predict market direction better than green glass. Buying a $100 indicator at 2 am when I was acting a fool, looking at it and going at and going "This is a piece of lagging crap, I miss out on a large part of the fundamental move and never using it for even one trade". All while struggling with massive over trading and bad habits because I would get bored watching a single well placed trade on fold for the day. Also, I wanted to get rich quick.
On top all of that I had a terminal Stage 4 case of FOMO on every time the price would move up and then down then back up. Just think about all those extra pips I could have trading both directions as it moves across the chart! I can just sell right when it goes down, then buy right before it goes up again. Its so easy right? Well, turns out it was not as easy as I thought and I lost a fair chunk of change and hit my head against the wall a lot until it clicked. Which is how I came up with a mixed bag of things that I now call "Trade the Trade" which helped support how I wanted to trade so I can still trade intra day price action like a rabid money without throwing away all my bananas.
Why Make This Post? - Core Topic of Discussion I wish to share a concept I came up with that helped me become a reliable trader. Support the weakness of how I like to trade. Also, explaining what I do helps reinforce my understanding of the information I share as I have to put words to it and not just use internalized processes. I came up with a method that helped me get my head straight when trading intra day.
I call it "Trade the Trade" as I am making mini trades inside of a trade setup I make from analysis on a higher timeframe that would take multiple days to unfold or longer. I will share information, principles, techniques I used and learned from others I talked to on the internet (mixed bag of folks from armatures to professionals, and random internet people) that helped me form a trading style that worked for me. Even people who are not good at trading can say something that might make it click in your head so I would absorbed all the information I could get.I will share the details of how I approach the methodology and the tools in my trading belt that I picked up by filtering through many tools, indicators strategies and witchcraft. Hopefully you read something that ends up helping you be a better trader. I learned a lot from people who make community posts so I wanted to give back now that I got my ducks in a row.
General Trading Advice If your struggling finding your own trading style, fixing weakness's in it, getting started, being reliably profitable or have no framework to build yourself higher with, hopefully you can use the below advice to help provide some direction or clarity to moving forward to be a better trader.
  1. KEEP IT SIMPLE. Do not throw a million things on your chart from the get go or over analyzing what the market is doing while trying to learn the basics. Tons of stuff on your chart can actually slow your learning by distracting your focus on all your bells and whistles and not the price action.
  2. PRICE ACTION. Learn how to read price action. Not just the common formations, but larger groups of bars that form the market structure. Those formations carry more weight the higher the time frame they form on. If struggle to understand what is going on or what your looking at, move to a higher time frame.
  3. INDICATORS. If you do use them you should try to understand how every indicator you use calculates its values. Many indicators are lagging indicators, understanding how it calculates the values can help you learn how to identify the market structure before the indicator would trigger a signal . This will help you understand why the signal is a lagged signal. If you understand that you can easily learn to look at the price action right before the signal and learn to watch for that price action on top of it almost trigging a signal so you can get in at a better position and assume less downside risk. I recommend using no more than 1-2 indicators for simplicity, but your free to use as many as you think you think you need or works for your strategy/trading style.
  4. PSYCOLOGY. First, FOMO is real, don't feed the beast. When you trade you should always have an entry and exit. If you miss your entry do not chase it, wait for a new entry. At its core trading is gambling and your looking for an edge against the house (the other market participants). With that in mind, treat as such. Do not risk more than you can afford to lose. If you are afraid to lose it will negatively effect your trade decisions. Finally, be honest with your self and bad trading happens. No one is going to play trade cop and keep you in line, that's your job.
  5. TRADE DECISION MARKING: Before you enter any trade you should have an entry and exit area. As you learn price action you will get better entries and better exits. Use a larger zone and stop loss at the start while learning. Then you can tighten it up as you gain experience. If you do not have a area you wish to exit, or you are entering because "the markets looking like its gonna go up". Do not enter the trade. Have a reason for everything you do, if you cannot logically explain why then you probably should not be doing it.
  6. ROBOTS/ALGOS: Loved by some, hated by many who lost it all to one, and surrounded by scams on the internet. If you make your own, find a legit one that works and paid for it or lost it all on a crappy one, more power to ya. I do not use robots because I do not like having a robot in control of my money. There is too many edge cases for me to be ok with it.However, the best piece of advice about algos was that the guy had a algo/robot for each market condition (trending/ranging) and would make personalized versions of each for currency pairs as each one has its own personality and can make the same type of movement along side another currency pair but the price action can look way different or the move can be lagged or leading. So whenever he does his own analysis and he sees a trend, he turns the trend trading robot on. If the trend stops, and it starts to range he turns the range trading robot on. He uses robots to trade the market types that he is bad at trading. For example, I suck at trend trading because I just suck at sitting on my hands and letting my trade do its thing.

Trade the Trade - The Methodology

Base Principles These are the base principles I use behind "Trade the Trade". Its called that because you are technically trading inside your larger high time frame trade as it hopefully goes as you have analyzed with the trade setup. It allows you to scratch that intraday trading itch, while not being blind to the bigger market at play. It can help make sense of why the price respects, rejects or flat out ignores support/resistance/pivots.
  1. Trade Setup: Find a trade setup using high level time frames (daily, 4hr, or 1hr time frames). The trade setup will be used as a base for starting to figure out a bias for the markets direction for that day.
  2. Indicator Data: Check any indicators you use (I use Stochastic RSI and Relative Vigor Index) for any useful information on higher timeframes.
  3. Support Resistance: See if any support/resistance/pivot points are in currently being tested/resisted by the price. Also check for any that are within reach so they might become in play through out the day throughout the day (which can influence your bias at least until the price reaches it if it was already moving that direction from previous days/weeks price action).
  4. Currency Strength/Weakness: I use the TradeVision currency strength/weakness dashboard to see if the strength/weakness supports the narrative of my trade and as an early indicator when to keep a closer eye for signs of the price reversing.Without the tool, the same concept can be someone accomplished with fundamentals and checking for higher level trends and checking cross currency pairs for trends as well to indicate strength/weakness, ranging (and where it is in that range) or try to get some general bias from a higher level chart that may help you out. However, it wont help you intra day unless your monitoring the currency's index or a bunch of charts related to the currency.
  5. Watch For Trading Opportunities: Personally I make a mental short list and alerts on TradingView of currency pairs that are close to key levels and so I get a notification if it reaches there so I can check it out. I am not against trading both directions, I just try to trade my bias before the market tries to commit to a direction. Then if I get out of that trade I will scalp against the trend of the day and hold trades longer that are with it.Then when you see a opportunity assume the directional bias you made up earlier (unless the market solidly confirms with price action the direction while waiting for an entry) by trying to look for additional confirmation via indicators, price action on support/resistances etc on the low level time frame or higher level ones like hourly/4hr as the day goes on when the price reaches key areas or makes new market structures to get a good spot to enter a trade in the direction of your bias.Then enter your trade and use the market structures to determine how much of a stop you need. Once your in the trade just monitor it and watch the price action/indicators/tools you use to see if its at risk of going against you. If you really believe the market wont reach your TP and looks like its going to turn against you, then close the trade. Don't just hold on to it for principle and let it draw down on principle or the hope it does not hit your stop loss.
  6. Trade Duration Hold your trades as long or little as you want that fits your personality and trading style/trade analysis. Personally I do not hold trades past the end of the day (I do in some cases when a strong trend folds) and I do not hold trades over the weekends. My TP targets are always places I think it can reach within the day. Typically I try to be flat before I sleep and trade intra day price movements only. Just depends on the higher level outlook, I have to get in at really good prices for me to want to hold a trade and it has to be going strong. Then I will set a slightly aggressive stop on it before I leave. I do know several people that swing trade and hold trades for a long period of time. That is just not a trading style that works for me.
Enhance Your Success Rate Below is information I picked up over the years that helped me enhance my success rate with not only guessing intra day market bias (even if it has not broken into the trend for the day yet (aka pre London open when the end of Asia likes to act funny sometimes), but also with trading price action intra day.
People always say "When you enter a trade have an entry and exits. I am of the belief that most people do not have problem with the entry, its the exit. They either hold too long, or don't hold long enough. With the below tools, drawings, or instruments, hopefully you can increase your individual probability of a successful trade.
**P.S.*\* Your mileage will vary depending on your ability to correctly draw, implement and interpret the below items. They take time and practice to implement with a high degree of proficiency. If you have any questions about how to do that with anything listed, comment below and I will reply as I can. I don't want to answer the same question a million times in a pm.
Tools and Methods Used This is just a high level overview of what I use. Each one of the actions I could go way more in-depth on but I would be here for a week typing something up of I did that. So take the information as a base level understanding of how I use the method or tool. There is always nuance and edge cases that you learn from experience.
Conclusion
I use the above tools/indicators/resources/philosophy's to trade intra day price action that sometimes ends up as noise in the grand scheme of the markets movement.use that method until the price action for the day proves the bias assumption wrong. Also you can couple that with things like Stoch RSI + Relative Vigor Index to find divergences which can increase the probability of your targeted guesses.

Trade Example from Yesterday This is an example of a trade I took today and why I took it. I used the following core areas to make my trade decision.
It may seem like a lot of stuff to process on the fly while trying to figure out live price action but, for the fundamental bias for a pair should already baked in your mindset for any currency pair you trade. For the currency strength/weakness I stare at the dashboard 12-15 hours a day so I am always trying to keep a pulse on what's going or shifts so that's not really a factor when I want to enter as I would not look to enter if I felt the market was shifting against me. Then the higher timeframe analysis had already happened when I woke up, so it was a game of "Stare at the 5 min chart until the price does something interesting"
Trade Example: Today , I went long EUUSD long bias when I first looked at the chart after waking up around 9-10pm Eastern. Fortunately, the first large drop had already happened so I had a easy baseline price movement to work with. I then used tool for currency strength/weakness monitoring, Pivot Points, and bearish divergence detected using Stochastic RSI and Relative Vigor Index.
I first noticed Bearish Divergence on the 1hr time frame using the Stochastic RSI and got confirmation intra day on the 5 min time frame with the Relative Vigor Index. I ended up buying the second mini dip around midnight Eastern because it was already dancing along the pivot point that the price had been dancing along since the big drop below the pivot point and dipped below it and then shortly closed back above it. I put a stop loss below the first large dip. With a TP goal of the middle point pivot line
Then I waited for confirmation or invalidation of my trade. I ended up getting confirmation with Bearish Divergence from the second large dip so I tightened up my stop to below that smaller drip and waited for the London open. Not only was it not a lower low, I could see the divergence with the Relative Vigor Index.
It then ran into London and kept going with tons of momentum. Blew past my TP target so I let it run to see where the momentum stopped. Ended up TP'ing at the Pivot Point support/resistance above the middle pivot line.
Random Note: The Asian session has its own unique price action characteristics that happen regularly enough that you can easily trade them when they happen with high degrees of success. It takes time to learn them all and confidently trade them as its happening. If you trade Asia you should learn to recognize them as they can fake you out if you do not understand what's going on.

TL;DR At the end of the day there is no magic solution that just works. You have to find out what works for you and then what people say works for them. Test it out and see if it works for you or if you can adapt it to work for you. If it does not work or your just not interested then ignore it.
At the end of the day, you have to use your brain to make correct trading decisions. Blindly following indicators may work sometimes in certain market conditions, but trading with information you don't understand can burn you just as easily as help you. Its like playing with fire. So, get out there and grind it out. It will either click or it wont. Not everyone has the mindset or is capable of changing to be a successful trader. Trading is gambling, you do all this work to get a edge on the house. Trading without the edge or an edge you understand how to use will only leave your broker happy in the end.
submitted by marcusrider to Forex [link] [comments]

Former investment bank FX trader: Risk management part 3/3

Former investment bank FX trader: Risk management part 3/3
Welcome to the third and final part of this chapter.
Thank you all for the 100s of comments and upvotes - maybe this post will take us above 1,000 for this topic!
Keep any feedback or questions coming in the replies below.
Before you read this note, please start with Part I and then Part II so it hangs together and makes sense.
Part III
  • Squeezes and other risks
  • Market positioning
  • Bet correlation
  • Crap trades, timeouts and monthly limits

Squeezes and other risks

We are going to cover three common risks that traders face: events; squeezes, asymmetric bets.

Events

Economic releases can cause large short-term volatility. The most famous is Non Farm Payrolls, which is the most widely watched measure of US employment levels and affects the price of many instruments.On an NFP announcement currencies like EURUSD might jump (or drop) 100 pips no problem.
This is fine and there are trading strategies that one may employ around this but the key thing is to be aware of these releases.You can find economic calendars all over the internet - including on this site - and you need only check if there are any major releases each day or week.
For example, if you are trading off some intraday chart and scalping a few pips here and there it would be highly sensible to go into a known data release flat as it is pure coin-toss and not the reason for your trading. It only takes five minutes each day to plan for the day ahead so do not get caught out by this. Many retail traders get stopped out on such events when price volatility is at its peak.

Squeezes

Short squeezes bring a lot of danger and perhaps some opportunity.
The story of VW and Porsche is the best short squeeze ever. Throughout these articles we've used FX examples wherever possible but in this one instance the concept (which is also highly relevant in FX) is best illustrated with an historical lesson from a different asset class.
A short squeeze is when a participant ends up in a short position they are forced to cover. Especially when the rest of the market knows that this participant can be bullied into stopping out at terrible levels, provided the market can briefly drive the price into their pain zone.

There's a reason for the car, don't worry
Hedge funds had been shorting VW stock. However the amount of VW stock available to buy in the open market was actually quite limited. The local government owned a chunk and Porsche itself had bought and locked away around 30%. Neither of these would sell to the hedge-funds so a good amount of the stock was un-buyable at any price.
If you sell or short a stock you must be prepared to buy it back to go flat at some point.
To cut a long story short, Porsche bought a lot of call options on VW stock. These options gave them the right to purchase VW stock from banks at slightly above market price.
Eventually the banks who had sold these options realised there was no VW stock to go out and buy since the German government wouldn’t sell its allocation and Porsche wouldn’t either. If Porsche called in the options the banks were in trouble.
Porsche called in the options which forced the shorts to buy stock - at whatever price they could get it.
The price squeezed higher as those that were short got massively squeezed and stopped out. For one brief moment in 2008, VW was the world’s most valuable company. Shorts were burned hard.

Incredible event
Porsche apparently made $11.5 billion on the trade. The BBC described Porsche as “a hedge fund with a carmaker attached.”
If this all seems exotic then know that the same thing happens in FX all the time. If everyone in the market is talking about a key level in EURUSD being 1.2050 then you can bet the market will try to push through 1.2050 just to take out any short stops at that level. Whether it then rallies higher or fails and trades back lower is a different matter entirely.
This brings us on to the matter of crowded trades. We will look at positioning in more detail in the next section. Crowded trades are dangerous for PNL. If everyone believes EURUSD is going down and has already sold EURUSD then you run the risk of a short squeeze.
For additional selling to take place you need a very good reason for people to add to their position whereas a move in the other direction could force mass buying to cover their shorts.
A trading mentor when I worked at the investment bank once advised me:
Always think about which move would cause the maximum people the maximum pain. That move is precisely what you should be watching out for at all times.

Asymmetric losses

Also known as picking up pennies in front of a steamroller. This risk has caught out many a retail trader. Sometimes it is referred to as a "negative skew" strategy.
Ideally what you are looking for is asymmetric risk trade set-ups: that is where the downside is clearly defined and smaller than the upside. What you want to avoid is the opposite.
A famous example of this going wrong was the Swiss National Bank de-peg in 2012.
The Swiss National Bank had said they would defend the price of EURCHF so that it did not go below 1.2. Many people believed it could never go below 1.2 due to this. Many retail traders therefore opted for a strategy that some describe as ‘picking up pennies in front of a steam-roller’.
They would would buy EURCHF above the peg level and hope for a tiny rally of several pips before selling them back and keep doing this repeatedly. Often they were highly leveraged at 100:1 so that they could amplify the profit of the tiny 5-10 pip rally.
Then this happened.

Something that changed FX markets forever
The SNB suddenly did the unthinkable. They stopped defending the price. CHF jumped and so EURCHF (the number of CHF per 1 EUR) dropped to new lows very fast. Clearly, this trade had horrific risk : reward asymmetry: you risked 30% to make 0.05%.
Other strategies like naively selling options have the same result. You win a small amount of money each day and then spectacularly blow up at some point down the line.

Market positioning

We have talked about short squeezes. But how do you know what the market position is? And should you care?
Let’s start with the first. You should definitely care.
Let’s imagine the entire market is exceptionally long EURUSD and positioning reaches extreme levels. This makes EURUSD very vulnerable.
To keep the price going higher EURUSD needs to attract fresh buy orders. If everyone is already long and has no room to add, what can incentivise people to keep buying? The news flow might be good. They may believe EURUSD goes higher. But they have already bought and have their maximum position on.
On the flip side, if there’s an unexpected event and EURUSD gaps lower you will have the entire market trying to exit the position at the same time. Like a herd of cows running through a single doorway. Messy.
We are going to look at this in more detail in a later chapter, where we discuss ‘carry’ trades. For now this TRYJPY chart might provide some idea of what a rush to the exits of a crowded position looks like.

A carry trade position clear-out in action
Knowing if the market is currently at extreme levels of long or short can therefore be helpful.
The CFTC makes available a weekly report, which details the overall positions of speculative traders “Non Commercial Traders” in some of the major futures products. This includes futures tied to deliverable FX pairs such as EURUSD as well as products such as gold. The report is called “CFTC Commitments of Traders” ("COT").
This is a great benchmark. It is far more representative of the overall market than the proprietary ones offered by retail brokers as it covers a far larger cross-section of the institutional market.
Generally market participants will not pay a lot of attention to commercial hedgers, which are also detailed in the report. This data is worth tracking but these folks are simply hedging real-world transactions rather than speculating so their activity is far less revealing and far more noisy.
You can find the data online for free and download it directly here.

Raw format is kinda hard to work with

However, many websites will chart this for you free of charge and you may find it more convenient to look at it that way. Just google “CFTC positioning charts”.

But you can easily get visualisations
You can visually spot extreme positioning. It is extremely powerful.
Bear in mind the reports come out Friday afternoon US time and the report is a snapshot up to the prior Tuesday. That means it is a lagged report - by the time it is released it is a few days out of date. For longer term trades where you hold positions for weeks this is of course still pretty helpful information.
As well as the absolute level (is the speculative market net long or short) you can also use this to pick up on changes in positioning.
For example if bad news comes out how much does the net short increase? If good news comes out, the market may remain net short but how much did they buy back?
A lot of traders ask themselves “Does the market have this trade on?” The positioning data is a good method for answering this. It provides a good finger on the pulse of the wider market sentiment and activity.
For example you might say: “There was lots of noise about the good employment numbers in the US. However, there wasn’t actually a lot of position change on the back of it. Maybe everyone who wants to buy already has. What would happen now if bad news came out?”
In general traders will be wary of entering a crowded position because it will be hard to attract additional buyers or sellers and there could be an aggressive exit.
If you want to enter a trade that is showing extreme levels of positioning you must think carefully about this dynamic.

Bet correlation

Retail traders often drastically underestimate how correlated their bets are.
Through bitter experience, I have learned that a mistake in position correlation is the root of some of the most serious problems in trading. If you have eight highly correlated positions, then you are really trading one position that is eight times as large.
Bruce Kovner of hedge fund, Caxton Associates
For example, if you are trading a bunch of pairs against the USD you will end up with a simply huge USD exposure. A single USD-trigger can ruin all your bets. Your ideal scenario — and it isn’t always possible — would be to have a highly diversified portfolio of bets that do not move in tandem.
Look at this chart. Inverted USD index (DXY) is green. AUDUSD is orange. EURUSD is blue.

Chart from TradingView
So the whole thing is just one big USD trade! If you are long AUDUSD, long EURUSD, and short DXY you have three anti USD bets that are all likely to work or fail together.
The more diversified your portfolio of bets are, the more risk you can take on each.
There’s a really good video, explaining the benefits of diversification from Ray Dalio.
A systematic fund with access to an investable universe of 10,000 instruments has more opportunity to make a better risk-adjusted return than a trader who only focuses on three symbols. Diversification really is the closest thing to a free lunch in finance.
But let’s be pragmatic and realistic. Human retail traders don’t have capacity to run even one hundred bets at a time. More realistic would be an average of 2-3 trades on simultaneously. So what can be done?
For example:
  • You might diversify across time horizons by having a mix of short-term and long-term trades.
  • You might diversify across asset classes - trading some FX but also crypto and equities.
  • You might diversify your trade generation approach so you are not relying on the same indicators or drivers on each trade.
  • You might diversify your exposure to the market regime by having some trades that assume a trend will continue (momentum) and some that assume we will be range-bound (carry).
And so on. Basically you want to scan your portfolio of trades and make sure you are not putting all your eggs in one basket. If some trades underperform others will perform - assuming the bets are not correlated - and that way you can ensure your overall portfolio takes less risk per unit of return.
The key thing is to start thinking about a portfolio of bets and what each new trade offers to your existing portfolio of risk. Will it diversify or amplify a current exposure?

Crap trades, timeouts and monthly limits

One common mistake is to get bored and restless and put on crap trades. This just means trades in which you have low conviction.
It is perfectly fine not to trade. If you feel like you do not understand the market at a particular point, simply choose not to trade.
Flat is a position.
Do not waste your bullets on rubbish trades. Only enter a trade when you have carefully considered it from all angles and feel good about the risk. This will make it far easier to hold onto the trade if it moves against you at any point. You actually believe in it.
Equally, you need to set monthly limits. A standard limit might be a 10% account balance stop per month. At that point you close all your positions immediately and stop trading till next month.

Be strict with yourself and walk away
Let’s assume you started the year with $100k and made 5% in January so enter Feb with $105k balance. Your stop is therefore 10% of $105k or $10.5k . If your account balance dips to $94.5k ($105k-$10.5k) then you stop yourself out and don’t resume trading till March the first.
Having monthly calendar breaks is nice for another reason. Say you made a load of money in January. You don’t want to start February feeling you are up 5% or it is too tempting to avoid trading all month and protect the existing win. Each month and each year should feel like a clean slate and an independent period.
Everyone has trading slumps. It is perfectly normal. It will definitely happen to you at some stage. The trick is to take a break and refocus. Conserve your capital by not trading a lot whilst you are on a losing streak. This period will be much harder for you emotionally and you’ll end up making suboptimal decisions. An enforced break will help you see the bigger picture.
Put in place a process before you start trading and then it’ll be easy to follow and will feel much less emotional. Remember: the market doesn’t care if you win or lose, it is nothing personal.
When your head has cooled and you feel calm you return the next month and begin the task of building back your account balance.

That's a wrap on risk management

Thanks for taking time to read this three-part chapter on risk management. I hope you enjoyed it. Do comment in the replies if you have any questions or feedback.
Remember: the most important part of trading is not making money. It is not losing money. Always start with that principle. I hope these three notes have provided some food for thought on how you might approach risk management and are of practical use to you when trading. Avoiding mistakes is not a sexy tagline but it is an effective and reliable way to improve results.
Next up I will be writing about an exciting topic I think many traders should look at rather differently: news trading. Please follow on here to receive notifications and the broad outline is below.
News Trading Part I
  • Introduction
  • Why use the economic calendar
  • Reading the economic calendar
  • Knowing what's priced in
  • Surveys
  • Interest rates
  • First order thinking vs second order thinking
News Trading Part II
  • Preparing for quantitative and qualitative releases
  • Data surprise index
  • Using recent events to predict future reactions
  • Buy the rumour, sell the fact
  • The mysterious 'position trim' effect
  • Reversals
  • Some key FX releases
***

Disclaimer:This content is not investment advice and you should not place any reliance on it. The views expressed are the author's own and should not be attributed to any other person, including their employer.
submitted by getmrmarket to Forex [link] [comments]

10 Secrets The Trading Industry Doesn’t Want You To Know About

Today’s lesson goes to be somewhat controversial and should ruffle some feathers. I shall blow wide open and debunk tons of the knowledge you've got presumably been exposed to the present far in your trading journey.
The average trader is out there walking through a confusing and conflicting maze of data from a spread of sources including; blogs, forums, broker websites, books, e-books, courses and YouTube videos.
With of these learning resources available there's naturally getting to be some excellent and a few very bad information, but actually , there just isn’t how for many aspiring traders to understand what to concentrate to, who to concentrate to, or what information is useful and what information is non-beneficial.
I’m not getting to pretend that there's how for an aspiring trader to filter this giant sea of data composed by of these resources and mentors out there, because there simply isn’t. knowledgeable trader with 10,000 hours of experience might stand an opportunity of deciding the great from the bad and therefore the valid from the invalid. However, you, the beginner or intermediate trader simply won’t possess that filtering ability yet.
Becoming ‘Non-Average’
As traders, we concede to our instinctive feelings of social trustworthiness supported what we see and listen to , often to our extreme detriment. we frequently tend to require a leap of religion with our mentors and have a habit of taking things said to us at face value. we would like to hold close information that resonates with us and is sensible to us, especially if it’s delivered by a well-known source that we've come to understand and trust.
The ‘average trader’s brain’ is usually trying to find a shortcut due to the overwhelming desire to form money and be free. The brain wants to urge a winning result immediately with the smallest amount amount of effort possible. If you would like to ever make it as a professional trader or investor, I suggest you are doing everything you'll to avoid thinking with the ‘average trader’s brain‘ and begin being ‘non-average’. meaning becoming far more aware, thinking outside the box more and questioning and filtering the knowledge you read and watch. most significantly , slowing everything all down!
This now begs the apparent question…how does one even know what I’m close to write during this lesson is actually valid and factual? How are you able to really be sure? the reality is unless you've got followed me and my posts on this blog for an extended time and know me and know my work, then you can’t really make certain , and that i don’t expect you to easily believe it at face value. If you would like to return back and re-read this lesson during a few weeks, or a couple of months, or a couple of years, after you work out that i'm somebody worth taking note of about trading OR that i'm somebody not worth taking note of about trading, then so be it.
So with a degree of healthy skepticism, I ask you to think about the below list of eye-opening secrets that professional traders and therefore the trading industry, don’t want you to understand about or understand. I hope it helps…
Visit : توصيات الذهب اليوم
FOREX isn’t the sole market the Professionals trade
The FX market is large , with billions of dollars per day changing hands. It can cause you to great money if you recognize what you’re doing OR it can send you broke if you don’t. It’s a really popular market to trade globally, BUT it’s not the sole market the professional’s trade and it’s not always the simplest market to trade either.
A note on leverage:
The brokers and platform providers want you to trade FX on high leverage because the profit margins are very high for them. However, if you trade FX on lower leverage, the profit margins shrink dramatically for them. once you trade FX, start brooding about what can fail rather than just brooding about what can go right. I suggest avoiding stupidly high leverage like 400 to 1, as this will be very dangerous for you if the market moves quickly or experiences a price gap and your stop-loss orders aren’t executed at the worth you set. A more sensible leverage level would be 100 to 1 or 200 to 1, but any higher seems crazy. (Using an excessive amount of leverage is what wiped tons of traders out during Swiss Bank Crisis in 2015, The Brexit choose 2016 and therefore the Currency flash crash in early 2019).
Broaden your view:
Going forward, it'll serve you well in your trading career to start out watching a spread of worldwide markets including FX, Stock Indicies and Commodities. additionally to FX, I personally trade GOLD (XAUUSD), S&P500 Index USA, the SPI200 Index Australia, and therefore the Hang Seng Index Hong Kong , and sometimes individual stocks on various global exchanges. In short, there's more to the trading world than simply FX. I discuss the foremost popular markets I trade this lesson here.
Day trading isn’t what Pro trading really is
The internet is crammed with marketing trying to convince folks that the definition of a trader may be a one that spends all day actively trading in and out of the market on a brief term basis, all whilst living the life-style of a Wall St millionaire. there's a significant agenda within the industry to push this story to the masses, it's been relentless for many years .
I am yet to satisfy one successful day trader who is consistent over the future and that i have almost 25,000 students and 250,000 readers on this blog. i'm not saying there isn’t a couple of out there, but 99.9% of the people that do this sort of trading or attempt to live up to the standard day trader stereotype are getting to fail and perhaps even harm themselves financially or mentally. Watching a screen all day and searching for trades constantly is that the like a compulsive gambler playing roulette during a casino.
The successful traders i do know of (myself included) are watching higher time frames and longer time horizons (minimum 4-hour chart timeframes and predominantly daily chart time frames). they need no restriction on how long they're looking to carry a trade for and that they tend to let the trades find them. The professionals i do know , don't day trade, they are doing not watch screens all day, they are doing not search for trades constantly. they're going to typically fall under the category of a swing trader, trend trader or position trader.
The obvious paradox and conflicting reality within the ‘day trader story’ is blatantly obvious. How does a trader who is consistently watching a screen and constantly trading have time to enjoy his life and live the lifestyle? They chose to trade as a profession to possess a life, they didn’t choose it to observe a screen 24/5.
Here are some points to think about that employment against the so-called ‘ day trader’:
The shorter the time-frame the more noise and random price movement there's , thus increasing your chance of simply being stopped out of the trade.
Your ‘trading edge’ features a higher chance of yielding a result for you if you’re not trading within the intraday noise.
The same trading edge doesn't work or produce an equivalent results on a 5 min chart compared to a Daily chart.
Commissions and spreads churn your account, therefore the more you trade the more you lose in broker platform costs. (I will mention this below)
Risk-Reward ratios aren't relative on shorter and longer time frames. Statistical average volatility across different time periods also as natural market dynamics play an enormous role during this . there's much more weight behind higher time frames than lower timeframes.
Great trades take time because the market moves slower than most of the people ever anticipate. Trading from the upper timeframes and holding trades for extended time periods will provide you with greater opportunities to ascertain trades mature into big winners. However, shorter timeframes don’t provide you with this same opportunity fairly often .
submitted by LondonForex to u/LondonForex [link] [comments]

Forex Signals Reddit: top providers review (part 1)

Forex Signals Reddit: top providers review (part 1)

Forex Signals - TOP Best Services. Checked!

To invest in the financial markets, we must acquire good tools that help us carry out our operations in the best possible way. In this sense, we always talk about the importance of brokers, however, signal systems must also be taken into account.
The platforms that offer signals to invest in forex provide us with alerts that will help us in a significant way to be able to carry out successful operations.
For this reason, we are going to tell you about the importance of these alerts in relation to the trading we carry out, because, without a doubt, this type of system will provide us with very good information to invest at the right time and in the best assets in the different markets. financial
Within this context, we will focus on Forex signals, since it is the most important market in the world, since in it, multiple transactions are carried out on a daily basis, hence the importance of having an alert system that offers us all the necessary data to invest in currencies.
Also, as we all already know, cryptocurrencies have become a very popular alternative to investing in traditional currencies. Therefore, some trading services/tools have emerged that help us to carry out successful operations in this particular market.
In the following points, we will detail everything you need to know to start operating in the financial markets using trading signals: what are signals, how do they work, because they are a very powerful help, etc. Let's go there!

What are Forex Trading Signals?

https://preview.redd.it/vjdnt1qrpny51.jpg?width=640&format=pjpg&auto=webp&s=bc541fc996701e5b4dd940abed610b59456a5625
Before explaining the importance of Forex signals, let's start by making a small note so that we know what exactly these alerts are.
Thus, we will know that the signals on the currency market are received by traders to know all the information that concerns Forex, both for assets and for the market itself.
These alerts allow us to know the movements that occur in the Forex market and the changes that occur in the different currency pairs. But the great advantage that this type of system gives us is that they provide us with the necessary information, to know when is the right time to carry out our investments.
In other words, through these signals, we will know the opportunities that are presented in the market and we will be able to carry out operations that can become quite profitable.
Profitability is precisely another of the fundamental aspects that must be taken into account when we talk about Forex signals since the vast majority of these alerts offer fairly reliable data on assets. Similarly, these signals can also provide us with recommendations or advice to make our operations more successful.

»Purpose: predict movements to carry out Profitable Operations

In short, Forex signal systems aim to predict the behavior that the different assets that are in the market will present and this is achieved thanks to new technologies, the creation of specialized software, and of course, the work of financial experts.
In addition, it must also be borne in mind that the reliability of these alerts largely lies in the fact that they are prepared by financial professionals. So they turn out to be a perfect tool so that our investments can bring us a greater number of benefits.

The best signal services today

We are going to tell you about the 3 main alert system services that we currently have on the market. There are many more, but I can assure these are not scams and are reliable. Of course, not 100% of trades will be a winner, so please make sure you apply proper money management and risk management system.

1. 1000pipbuilder (top choice)

Fast track your success and follow the high-performance Forex signals from 1000pip Builder. These Forex signals are rated 5 stars on Investing.com, so you can follow every signal with confidence. All signals are sent by a professional trader with over 10 years investment experience. This is a unique opportunity to see with your own eyes how a professional Forex trader trades the markets.
The 1000pip Builder Membership is ordinarily a signal service for Forex trading. You will get all the facts you need to successfully comply with the trading signals, set your stop loss and take earnings as well as additional techniques and techniques!
You will get easy to use trading indicators for Forex Trades, including your entry, stop loss and take profit. Overall, the earnings target per months is 350 Pips, depending on your funding this can be a high profit per month! (In fact, there is by no means a guarantee, but the past months had been all between 600 – 1000 Pips).
>>>Know more about 1000pipbuilder
Your 1000pip builder membership gives you all in hand you want to start trading Forex with success. Read the directions and wait for the first signals. You can trade them inside your demo account first, so you can take a look at the performance before you make investments real money!
Features:
  • Free Trial
  • Forex signals sent by email and SMS
  • Entry price, take profit and stop loss provided
  • Suitable for all time zones (signals sent over 24 hours)
  • MyFXBook verified performance
  • 10 years of investment experience
  • Target 300-400 pips per month
Pricing:
https://preview.redd.it/zjc10xx6ony51.png?width=668&format=png&auto=webp&s=9b0eac95f8b584dc0cdb62503e851d7036c0232b
VISIT 1000ipbuilder here

2. DDMarkets

Digital Derivatives Markets (DDMarkets) have been providing trade alert offerings since May 2014 - fully documenting their change ideas in an open and transparent manner.
September 2020 performance report for DD Markets.
Their manner is simple: carry out extensive research, share their evaluation and then deliver a trading sign when triggered. Once issued, daily updates on the trade are despatched to members via email.
It's essential to note that DDMarkets do not tolerate floating in an open drawdown in an effort to earnings at any cost - a common method used by less professional providers to 'fudge' performance statistics.
Verified Statistics: Not independently verified.
Price: plans from $74.40 per month.
Year Founded: 2014
Suitable for Beginners: Yes, (includes handy to follow trade analysis)
VISIT
-------

3. JKonFX

If you are looking or a forex signal service with a reliable (and profitable) music record you can't go previous Joel Kruger and the team at JKonFX.
Trading performance file for JKonFX.
Joel has delivered a reputable +59.18% journal performance for 2016, imparting real-time technical and fundamental insights, in an extremely obvious manner, to their 30,000+ subscriber base. Considered a low-frequency trader, alerts are only a small phase of the overall JKonFX subscription. If you're searching for hundreds of signals, you may want to consider other options.
Verified Statistics: Not independently verified.
Price: plans from $30 per month.
Year Founded: 2014
Suitable for Beginners: Yes, (includes convenient to follow videos updates).
VISIT

The importance of signals to invest in Forex

Once we have known what Forex signals are, we must comment on the importance of these alerts in relation to our operations.
As we have already told you in the previous paragraph, having a system of signals to be able to invest is quite advantageous, since, through these alerts, we will obtain quality information so that our operations end up being a true success.

»Use of signals for beginners and experts

In this sense, we have to say that one of the main advantages of Forex signals is that they can be used by both beginners and trading professionals.
As many as others can benefit from using a trading signal system because the more information and resources we have in our hands. The greater probability of success we will have. Let's see how beginners and experts can take advantage of alerts:
  • Beginners: for inexperienced these alerts become even more important since they will thus have an additional tool that will guide them to carry out all operations in the Forex market.
  • Professionals: In the same way, professionals are also recommended to make use of these alerts, so they have adequate information to continue bringing their investments to fruition.
Now that we know that both beginners and experts can use forex signals to invest, let's see what other advantages they have.

»Trading automation

When we dedicate ourselves to working in the financial world, none of us can spend 24 hours in front of the computer waiting to perform the perfect operation, it is impossible.
That is why Forex signals are important, because, in order to carry out our investments, all we will have to do is wait for those signals to arrive, be attentive to all the alerts we receive, and thus, operate at the right time according to the opportunities that have arisen.
It is fantastic to have a tool like this one that makes our work easier in this regard.

»Carry out profitable Forex operations

These signals are also important, because the vast majority of them are usually quite profitable, for this reason, we must get an alert system that provides us with accurate information so that our operations can bring us great benefits.
But in addition, these Forex signals have an added value and that is that they are very easy to understand, therefore, we will have a very useful tool at hand that will not be complicated and will end up being a very beneficial weapon for us.

»Decision support analysis

A system of currency market signals is also very important because it will help us to make our subsequent decisions.
We cannot forget that, to carry out any type of operation in this market, previously, we must meditate well and know the exact moment when we will know that our investments are going to bring us profits .
Therefore, all the information provided by these alerts will be a fantastic basis for future operations that we are going to carry out.

»Trading Signals made by professionals

Finally, we have to recall the idea that these signals are made by the best professionals. Financial experts who know perfectly how to analyze the movements that occur in the market and changes in prices.
Hence the importance of alerts, since they are very reliable and are presented as a necessary tool to operate in Forex and that our operations are as profitable as possible.

What should a signal provider be like?

https://preview.redd.it/j0ne51jypny51.png?width=640&format=png&auto=webp&s=5578ff4c42bd63d5b6950fc6401a5be94b97aa7f
As you have seen, Forex signal systems are really important for our operations to bring us many benefits. For this reason, at present, there are multiple platforms that offer us these financial services so that investing in currencies is very simple and fast.
Before telling you about the main services that we currently have available in the market, it is recommended that you know what are the main characteristics that a good signal provider should have, so that, at the time of your choice, you are clear that you have selected one of the best systems.

»Must send us information on the main currency pairs

In this sense, one of the first things we have to comment on is that a good signal provider, at a minimum, must send us alerts that offer us information about the 6 main currencies, in this case, we refer to the euro, dollar, The pound, the yen, the Swiss franc, and the Canadian dollar.
Of course, the data you provide us will be related to the pairs that make up all these currencies. Although we can also find systems that offer us information about other minorities, but as we have said, at a minimum, we must know these 6.

»Trading tools to operate better

Likewise, signal providers must also provide us with a large number of tools so that we can learn more about the Forex market.
We refer, for example, to technical analysis above all, which will help us to develop our own strategies to be able to operate in this market.
These analyzes are always prepared by professionals and study, mainly, the assets that we have available to invest.

»Different Forex signals reception channels

They must also make available to us different ways through which they will send us the Forex signals, the usual thing is that we can acquire them through the platform's website, or by a text message and even through our email.
In addition, it is recommended that the signal system we choose sends us a large number of alerts throughout the day, in order to have a wide range of possibilities.

»Free account and customer service

Other aspects that we must take into account to choose a good signal provider is whether we have the option of receiving, for a limited time, alerts for free or the profitability of the signals they emit to us.
Similarly, a final aspect that we must emphasize is that a good signal system must also have excellent customer service, which is available to us 24 hours a day and that we can contact them at through an email, a phone number, or a live chat, for greater immediacy.
Well, having said all this, in our last section we are going to tell you which are the best services currently on the market. That is, the most suitable Forex signal platforms to be able to work with them and carry out good operations. In this case, we will talk about ForexPro Signals, 365 Signals and Binary Signals.

Forex Signals Reddit: conclusion

To be able to invest properly in the Forex market, it is convenient that we get a signal system that provides us with all the necessary information about this market. It must be remembered that Forex is a very volatile market and therefore, many movements tend to occur quickly.
Asset prices can change in a matter of seconds, hence the importance of having a system that helps us analyze the market and thus know, what is the right time for us to start operating.
Therefore, although there are currently many signal systems that can offer us good services, the three that we have mentioned above are the ones that are best valued by users, which is why they are the best signal providers that we can choose to carry out. our investments.
Most of these alerts are quite profitable and in addition, these systems usually emit a large number of signals per day with full guarantees. For all this, SignalsForexPro, Signals365, or SignalsBinary are presented as fundamental tools so that we can obtain a greater number of benefits when we carry out our operations in the currency market.
submitted by kayakero to makemoneyforexreddit [link] [comments]

Forex Trading in Kenya.

Someone posted on here a few days ago asking about forex and forex trading in Kenya, I have gone through the responses and clearly, most people don’t have an idea. It is 3am in the morning and am in a good mood so let me make this post. This will be a comprehensive and lengthy post so grab a pen and paper and sit down. We’ll be here a while.
FIRST OF ALL, who am I..?
I am a forex trader, in Nairobi, Kenya..i have been actively involved in forex since I found out about it in Feb 2016 when I somehow ended up in a wealth creation seminar (lol) in pride inn Westlands, the one close to Mpaka Rd. Luckily for me, it was not one of those AIM global meetings or I’d be on Facebook selling God knows what those guys sell. I did not take it seriously till August of the same year and I have been active ever since.
I don’t teach, mentor or sell a course or signals, I trade my own money. I am also posting from a throwaway account because I don’t want KRA on my ass.
What the fuck is forex and forex trading.
In simple plain English, forex is like the stock market but for currencies. Stock Market = Shares, forex = currencies. If you want more in-depth explanation, google is your friend.
These currencies are pegged on specific countries, united states- dollar, UK- pound, euro zone- euro, Switzerland- Swiss franc, Kenya- Kenya shilling.. you get the point. Now, there are specific events and happenings between these economies that affect the movement and values of the currencies, driving their value (purchasing power up and down). Forex trading exploits these movements to make money. When the value is going up, we buy and vice versa (down –sell)
Is forex trading illegal in Kenya? Is it a scam?
Illegal, no. scam, no. All the banks in the world do it (KCB made about 4 billion from trading forex in 2019)
Have there been scams involving forex in Kenya?
Yes. Here is one that happened recently. This one is the most infamous one yet. Best believe that this is not the end of these type of scams because the stupidity, greed and gullibility of human beings is unfathomable.
However, by the end of this post, I hope you won’t fall for such silliness.
What next how do I make it work..?
Am glad you asked. Generally, there are two ways to go about it. One, you teach yourself. This is the equivalent of stealing our dad’s car and hoping that the pedal you hit is the brake and not the accelerator. It is the route I took, it is the most rewarding and a huge ego boost when you finally make it on your own. Typically, this involves scouring the internet for hours upon hours going down rabbit holes, thinking you have made it telling all your friends how you will be a millionaire then losing all your money. Some people do not have the stomach for that.
The second route is more practical, structured and smarter.
First Learn the basics. There is a free online forex course at www.babypips.com/learn/forex this is merely an introductory course. Basically it is learning the parts of a car before they let you inside the car.
Second, start building your strategy. By the time you are done with the babypips, you will have a feel of what the forex market is, what interests you, etc. Tip..Babypips has a lot of garbage. It is good for introductory purposes but not good for much else, pick whatever stick to you or jumps at you the first time. Nonsense like indicators should be ignored.
The next step is now the most important. Developing the skill and building your strategy. As a beginner, you want to exhaust your naivety before jumping into the more advanced stuff. Eg can you identify a trend, what is a pair, what is position sizing, what is metatrader 4 and how to operate it, what news is good for a currency, when can I trade, what are the different trading sessions, what is technical analysis, what is market sentiment, what are bullish conditions what is emotion management, how does my psychology affect my trading (more on this later) an I a swing, scalper or day trader etc
Mentors and forex courses.. you have probably seen people advertising how they can teach and mentor you on how to trade forex and charging so much money for it. Somehow it seems that these people are focused on the teaching than the trading. Weird, right..? Truth is trading is hard, teaching not quite. A common saying in the industry is “Those who can’t trade, teach” you want to avoid all these gurus on Facebook and Instagram, some are legit but most are not. Sifting the wheat from the chaff is hard but I did that for you. The info is available online on YouTube, telegram channels etc. am not saying not to spend money on a course, if you find a mentor whose style resonates with you and the course is reasonably priced, please, go ahead and buy..it will cut your learning curve in half. People are different. What worked for me might not work for you.
Here are some nice YouTube channels to watch. These guys are legit..
  1. Sam sieden
  2. Cuebanks
  3. TheCoinFx
  4. The trading channel
  5. Astro
  6. Forex family
  7. Wicksdontlie
Advanced stuff
  1. ICT
After a short period of time, you will be able to sniff out bs teachers with relative ease. You will also discover some of your own and expand the list. Two tips, start with the oldest videos first and whichever of these resonates with you, stick with till the wheels fall off.
How long will it take until things start making sense
Give yourself time to grow and learn. This is all new to you and you are allowed to make mistakes, to fail and discover yourself. Realistically, depending on the effort you put in, you will not start seeing results until after 6 months. Could take longeshorter so there is no guarantee.
Social media, Mentality, Psychology and Books
Online, forex trading might not have the best reputation online because it takes hard work and scammers and gurus give it a bad name. However, try to not get sucked into the Instagram trader lifestyle as it is nowhere close to what the reality is. You will not make millions tomorrow or the day after, you might never even make it in this market. But that is the reality of life. Nothing is promised, nothing is guaranteed.
Your mentality, beliefs and ego will be challenged in this market. You will learn things that will make you blood boil, you will ask yourself daily, how is this possible, why don’t they teach this in school..bla bla bla..it will be hard but growth is painful, if it wasn’t we’d all be billionaires. Take a break, take a walk, drink a glass of whatever you like or roll one..detox. Chill with your girl (or man) Gradually you will develop mental toughness that will set you up for life. Personally, I sorta ditched religion and picked up stoicism. Whatever works for you.
Psychology, this is unfortunately one of the most neglected aspects of your personal development in this journey. Do you believe in yourself? Can you stand by your convictions when everyone is against you? Can you get up every day uncertain of the future? There will be moments where you will question yourself, am I even doing the right thing? the right way? It is normal and essential for your growth. People who played competitive sports have a natural advantage here. Remember the game is first won in your head then on the pitch.
Books: ironically, books that helped me the most were the mindset books, Think and grow rich, trading for a living, 4 hour work week, the monk who sold his Ferrari..just google mindset and psychology books, most trading books are garbage. Watch and listen to people who have made it in the investing business. Ray Dalio, warren, Bill Ackman and Carl Icahn.
This is turning out to be lengthier than I anticipated so I’ll try to be brief for the remaining parts.
Brokers
You will need to open up an account with a broker. Get a broker who is regulated. Australian ones (IC Market and Pepperstone) are both legit, reliable and regulated. Do your research. I’d avoid local ones because I’ve heard stories of wide spreads and liquidity problems. International brokers have never failed me. There are plenty brokers, there is no one size fits all recommendation. If it ain’t broke..don’t fix it.
Money transfer.
All brokers accept wire transfers, you might need to call your bank to authorize that, avoid Equity bank. Stanchart and Stanbic are alright. Large withdrawals $10k+ you will have to call them prior. Get Skrill and Neteller if you don’t like banks like me, set up a Bitcoin wallet for faster withdrawals, (Payoneer and Paypal are accepted by some brokers, just check with them.)
How much money can I make..?
I hate this question because people have perceived ceilings of income in their minds, eg 1 million ksh is too much to make per month or 10,000ksh is too little. Instead, work backwards. What % return did I make this month/ on this trade. Safaricom made 19.5% last year, if you make 20% you have outperformed them. If you reach of consistency where you can make x% per month on whatever money you have, then there are no limits to how much you can make.
How much money do I need to start with..?
Zero. You have all the resources above, go forth. There are brokers who provide free bonuses and withdraw-able profits. However, to make a fulltime income you will need some serious cash. Generally, 50,000 kes. You can start lower or higher but if you need say 20k to live comfortably and that is a 10% return per month, then you can do the math on how big your account should be. Of course things like compound interest come into play but that is dependent on your skill level. I have seen people do spectacular things with very little funds.
Taxes..?
Talk to a lawyer or an accountant. I am neither.
Family? Friends?
Unfortunately, people will not understand why you spend hundreds of hours watching strangers on the internet so it is best to keep it from them. Eventually you will make it work and they will come to your corner talking about how they always knew you’d make it.
The journey will be lonely, make some trading buddies along the way. You’d be surprised at how easy it is when people are united by their circumstances (and stupidity) I have guys who are my bros from South Africa and Lebanon who I have never met but we came up together and are now homies. Join forums, ask questions and grow. That is the only way to learn. Ideally, a group of 5-10 friends committed to learning and growth is the best model. Pushing each other to grow and discovering together.
Forex is real and you can do amazing things with it. It is not a get rich quick scheme. If you want a quick guaranteed income, get a job.
And now it is 5am, fuck.
This is oversimplified and leaves out many many aspects.
Happy to answer any questions.
submitted by ChaliFlaniwaNairobi to Kenya [link] [comments]

H1 Backtest of ParallaxFX's BBStoch system

Disclaimer: None of this is financial advice. I have no idea what I'm doing. Please do your own research or you will certainly lose money. I'm not a statistician, data scientist, well-seasoned trader, or anything else that would qualify me to make statements such as the below with any weight behind them. Take them for the incoherent ramblings that they are.
TL;DR at the bottom for those not interested in the details.
This is a bit of a novel, sorry about that. It was mostly for getting my own thoughts organized, but if even one person reads the whole thing I will feel incredibly accomplished.

Background

For those of you not familiar, please see the various threads on this trading system here. I can't take credit for this system, all glory goes to ParallaxFX!
I wanted to see how effective this system was at H1 for a couple of reasons: 1) My current broker is TD Ameritrade - their Forex minimum is a mini lot, and I don't feel comfortable enough yet with the risk to trade mini lots on the higher timeframes(i.e. wider pip swings) that ParallaxFX's system uses, so I wanted to see if I could scale it down. 2) I'm fairly impatient, so I don't like to wait days and days with my capital tied up just to see if a trade is going to win or lose.
This does mean it requires more active attention since you are checking for setups once an hour instead of once a day or every 4-6 hours, but the upside is that you trade more often this way so you end up winning or losing faster and moving onto the next trade. Spread does eat more of the trade this way, but I'll cover this in my data below - it ends up not being a problem.
I looked at data from 6/11 to 7/3 on all pairs with a reasonable spread(pairs listed at bottom above the TL;DR). So this represents about 3-4 weeks' worth of trading. I used mark(mid) price charts. Spreadsheet link is below for anyone that's interested.

System Details

I'm pretty much using ParallaxFX's system textbook, but since there are a few options in his writeups, I'll include all the discretionary points here:

And now for the fun. Results!

As you can see, a higher target ended up with higher profit despite a much lower winrate. This is partially just how things work out with profit targets in general, but there's an additional point to consider in our case: the spread. Since we are trading on a lower timeframe, there is less overall price movement and thus the spread takes up a much larger percentage of the trade than it would if you were trading H4, Daily or Weekly charts. You can see exactly how much it accounts for each trade in my spreadsheet if you're interested. TDA does not have the best spreads, so you could probably improve these results with another broker.
EDIT: I grabbed typical spreads from other brokers, and turns out while TDA is pretty competitive on majors, their minors/crosses are awful! IG beats them by 20-40% and Oanda beats them 30-60%! Using IG spreads for calculations increased profits considerably (another 5% on top) and Oanda spreads increased profits massively (another 15%!). Definitely going to be considering another broker than TDA for this strategy. Plus that'll allow me to trade micro-lots, so I can be more granular(and thus accurate) with my position sizing and compounding.

A Note on Spread

As you can see in the data, there were scenarios where the spread was 80% of the overall size of the trade(the size of the confirmation candle that you draw your fibonacci retracements over), which would obviously cut heavily into your profits.
Removing any trades where the spread is more than 50% of the trade width improved profits slightly without removing many trades, but this is almost certainly just coincidence on a small sample size. Going below 40% and even down to 30% starts to cut out a lot of trades for the less-common pairs, but doesn't actually change overall profits at all(~1% either way).
However, digging all the way down to 25% starts to really make some movement. Profit at the -161.8% TP level jumps up to 37.94% if you filter out anything with a spread that is more than 25% of the trade width! And this even keeps the sample size fairly large at 187 total trades.
You can get your profits all the way up to 48.43% at the -161.8% TP level if you filter all the way down to only trades where spread is less than 15% of the trade width, however your sample size gets much smaller at that point(108 trades) so I'm not sure I would trust that as being accurate in the long term.
Overall based on this data, I'm going to only take trades where the spread is less than 25% of the trade width. This may bias my trades more towards the majors, which would mean a lot more correlated trades as well(more on correlation below), but I think it is a reasonable precaution regardless.

Time of Day

Time of day had an interesting effect on trades. In a totally predictable fashion, a vast majority of setups occurred during the London and New York sessions: 5am-12pm Eastern. However, there was one outlier where there were many setups on the 11PM bar - and the winrate was about the same as the big hours in the London session. No idea why this hour in particular - anyone have any insight? That's smack in the middle of the Tokyo/Sydney overlap, not at the open or close of either.
On many of the hour slices I have a feeling I'm just dealing with small number statistics here since I didn't have a lot of data when breaking it down by individual hours. But here it is anyway - for all TP levels, these three things showed up(all in Eastern time):
I don't have any reason to think these timeframes would maintain this behavior over the long term. They're almost certainly meaningless. EDIT: When you de-dup highly correlated trades, the number of trades in these timeframes really drops, so from this data there is no reason to think these timeframes would be any different than any others in terms of winrate.
That being said, these time frames work out for me pretty well because I typically sleep 12am-7am Eastern time. So I automatically avoid the 5am-6am timeframe, and I'm awake for the majority of this system's setups.

Moving stops up to breakeven

This section goes against everything I know and have ever heard about trade management. Please someone find something wrong with my data. I'd love for someone to check my formulas, but I realize that's a pretty insane time commitment to ask of a bunch of strangers.
Anyways. What I found was that for these trades moving stops up...basically at all...actually reduced the overall profitability.
One of the data points I collected while charting was where the price retraced back to after hitting a certain milestone. i.e. once the price hit the -61.8% profit level, how far back did it retrace before hitting the -100% profit level(if at all)? And same goes for the -100% profit level - how far back did it retrace before hitting the -161.8% profit level(if at all)?
Well, some complex excel formulas later and here's what the results appear to be. Emphasis on appears because I honestly don't believe it. I must have done something wrong here, but I've gone over it a hundred times and I can't find anything out of place.
Now, you might think exactly what I did when looking at these numbers: oof, the spread killed us there right? Because even when you move your SL to 0%, you still end up paying the spread, so it's not truly "breakeven". And because we are trading on a lower timeframe, the spread can be pretty hefty right?
Well even when I manually modified the data so that the spread wasn't subtracted(i.e. "Breakeven" was truly +/- 0), things don't look a whole lot better, and still way worse than the passive trade management method of leaving your stops in place and letting it run. And that isn't even a realistic scenario because to adjust out the spread you'd have to move your stoploss inside the candle edge by at least the spread amount, meaning it would almost certainly be triggered more often than in the data I collected(which was purely based on the fib levels and mark price). Regardless, here are the numbers for that scenario:
From a literal standpoint, what I see behind this behavior is that 44 of the 69 breakeven trades(65%!) ended up being profitable to -100% after retracing deeply(but not to the original SL level), which greatly helped offset the purely losing trades better than the partial profit taken at -61.8%. And 36 went all the way back to -161.8% after a deep retracement without hitting the original SL. Anyone have any insight into this? Is this a problem with just not enough data? It seems like enough trades that a pattern should emerge, but again I'm no expert.
I also briefly looked at moving stops to other lower levels (78.6%, 61.8%, 50%, 38.2%, 23.6%), but that didn't improve things any. No hard data to share as I only took a quick look - and I still might have done something wrong overall.
The data is there to infer other strategies if anyone would like to dig in deep(more explanation on the spreadsheet below). I didn't do other combinations because the formulas got pretty complicated and I had already answered all the questions I was looking to answer.

2-Candle vs Confirmation Candle Stops

Another interesting point is that the original system has the SL level(for stop entries) just at the outer edge of the 2-candle pattern that makes up the system. Out of pure laziness, I set up my stops just based on the confirmation candle. And as it turns out, that is much a much better way to go about it.
Of the 60 purely losing trades, only 9 of them(15%) would go on to be winners with stops on the 2-candle formation. Certainly not enough to justify the extra loss and/or reduced profits you are exposing yourself to in every single other trade by setting a wider SL.
Oddly, in every single scenario where the wider stop did save the trade, it ended up going all the way to the -161.8% profit level. Still, not nearly worth it.

Correlated Trades

As I've said many times now, I'm really not qualified to be doing an analysis like this. This section in particular.
Looking at shared currency among the pairs traded, 74 of the trades are correlated. Quite a large group, but it makes sense considering the sort of moves we're looking for with this system.
This means you are opening yourself up to more risk if you were to trade on every signal since you are technically trading with the same underlying sentiment on each different pair. For example, GBP/USD and AUD/USD moving together almost certainly means it's due to USD moving both pairs, rather than GBP and AUD both moving the same size and direction coincidentally at the same time. So if you were to trade both signals, you would very likely win or lose both trades - meaning you are actually risking double what you'd normally risk(unless you halve both positions which can be a good option, and is discussed in ParallaxFX's posts and in various other places that go over pair correlation. I won't go into detail about those strategies here).
Interestingly though, 17 of those apparently correlated trades ended up with different wins/losses.
Also, looking only at trades that were correlated, winrate is 83%/70%/55% (for the three TP levels).
Does this give some indication that the same signal on multiple pairs means the signal is stronger? That there's some strong underlying sentiment driving it? Or is it just a matter of too small a sample size? The winrate isn't really much higher than the overall winrates, so that makes me doubt it is statistically significant.
One more funny tidbit: EUCAD netted the lowest overall winrate: 30% to even the -61.8% TP level on 10 trades. Seems like that is just a coincidence and not enough data, but dang that's a sucky losing streak.
EDIT: WOW I spent some time removing correlated trades manually and it changed the results quite a bit. Some thoughts on this below the results. These numbers also include the other "What I will trade" filters. I added a new worksheet to my data to show what I ended up picking.
To do this, I removed correlated trades - typically by choosing those whose spread had a lower % of the trade width since that's objective and something I can see ahead of time. Obviously I'd like to only keep the winning trades, but I won't know that during the trade. This did reduce the overall sample size down to a level that I wouldn't otherwise consider to be big enough, but since the results are generally consistent with the overall dataset, I'm not going to worry about it too much.
I may also use more discretionary methods(support/resistance, quality of indecision/confirmation candles, news/sentiment for the pairs involved, etc) to filter out correlated trades in the future. But as I've said before I'm going for a pretty mechanical system.
This brought the 3 TP levels and even the breakeven strategies much closer together in overall profit. It muted the profit from the high R:R strategies and boosted the profit from the low R:R strategies. This tells me pair correlation was skewing my data quite a bit, so I'm glad I dug in a little deeper. Fortunately my original conclusion to use the -161.8 TP level with static stops is still the winner by a good bit, so it doesn't end up changing my actions.
There were a few times where MANY (6-8) correlated pairs all came up at the same time, so it'd be a crapshoot to an extent. And the data showed this - often then won/lost together, but sometimes they did not. As an arbitrary rule, the more correlations, the more trades I did end up taking(and thus risking). For example if there were 3-5 correlations, I might take the 2 "best" trades given my criteria above. 5+ setups and I might take the best 3 trades, even if the pairs are somewhat correlated.
I have no true data to back this up, but to illustrate using one example: if AUD/JPY, AUD/USD, CAD/JPY, USD/CAD all set up at the same time (as they did, along with a few other pairs on 6/19/20 9:00 AM), can you really say that those are all the same underlying movement? There are correlations between the different correlations, and trying to filter for that seems rough. Although maybe this is a known thing, I'm still pretty green to Forex - someone please enlighten me if so! I might have to look into this more statistically, but it would be pretty complex to analyze quantitatively, so for now I'm going with my gut and just taking a few of the "best" trades out of the handful.
Overall, I'm really glad I went further on this. The boosting of the B/E strategies makes me trust my calculations on those more since they aren't so far from the passive management like they were with the raw data, and that really had me wondering what I did wrong.

What I will trade

Putting all this together, I am going to attempt to trade the following(demo for a bit to make sure I have the hang of it, then for keeps):
Looking at the data for these rules, test results are:
I'll be sure to let everyone know how it goes!

Other Technical Details

Raw Data

Here's the spreadsheet for anyone that'd like it. (EDIT: Updated some of the setups from the last few days that have fully played out now. I also noticed a few typos, but nothing major that would change the overall outcomes. Regardless, I am currently reviewing every trade to ensure they are accurate.UPDATE: Finally all done. Very few corrections, no change to results.)
I have some explanatory notes below to help everyone else understand the spiraled labyrinth of a mind that put the spreadsheet together.

Insanely detailed spreadsheet notes

For you real nerds out there. Here's an explanation of what each column means:

Pairs

  1. AUD/CAD
  2. AUD/CHF
  3. AUD/JPY
  4. AUD/NZD
  5. AUD/USD
  6. CAD/CHF
  7. CAD/JPY
  8. CHF/JPY
  9. EUAUD
  10. EUCAD
  11. EUCHF
  12. EUGBP
  13. EUJPY
  14. EUNZD
  15. EUUSD
  16. GBP/AUD
  17. GBP/CAD
  18. GBP/CHF
  19. GBP/JPY
  20. GBP/NZD
  21. GBP/USD
  22. NZD/CAD
  23. NZD/CHF
  24. NZD/JPY
  25. NZD/USD
  26. USD/CAD
  27. USD/CHF
  28. USD/JPY

TL;DR

Based on the reasonable rules I discovered in this backtest:

Demo Trading Results

Since this post, I started demo trading this system assuming a 5k capital base and risking ~1% per trade. I've added the details to my spreadsheet for anyone interested. The results are pretty similar to the backtest when you consider real-life conditions/timing are a bit different. I missed some trades due to life(work, out of the house, etc), so that brought my total # of trades and thus overall profit down, but the winrate is nearly identical. I also closed a few trades early due to various reasons(not liking the price action, seeing support/resistance emerge, etc).
A quick note is that TD's paper trade system fills at the mid price for both stop and limit orders, so I had to subtract the spread from the raw trade values to get the true profit/loss amount for each trade.
I'm heading out of town next week, then after that it'll be time to take this sucker live!

Live Trading Results

I started live-trading this system on 8/10, and almost immediately had a string of losses much longer than either my backtest or demo period. Murphy's law huh? Anyways, that has me spooked so I'm doing a longer backtest before I start risking more real money. It's going to take me a little while due to the volume of trades, but I'll likely make a new post once I feel comfortable with that and start live trading again.
submitted by ForexBorex to Forex [link] [comments]

Why take the Regulated route?

Why take the Regulated route?
Rules & Regulations
https://eu.excentral.com/blog-article/?articleId=33427 Why have we chosen to be regulated by CySEC and what is the benefit for our investors?
The first thing you need to know is that CySEC falls under the branch of European regulators advocating for secure trading, and therefore embracing European regulations such as MiFID and MiFIR.
Trading in the Financial Markets is considered a highly-liquid, fast and complex investment. Therefore it is essential to have strong regulatory oversight such as CySEC to prevent malpractice and transgression. In the CFDs market, it is important to understand that there is no centralized body governing Forex.
Instead, there are a number of governmental and independent bodies that supervise forex trading around the world. These supervisory authorities regulate forex by setting standards which all brokers under their jurisdiction have to comply with. These standards ensure that Forex/CFD trading is ethical and fair for all parties involved.
But the question still stands to how regulation benefits you as a trader? With eXcentral being supervised by CySEC, investors can be more confident about the credibility we have, as a broker.

So, why not choose a non-regulated broker?

For a retail trader, the biggest risk of trading with a non-regulated broker is that of illegal activity or schemes. Fraudulent activities include excessive commissions, very loose spreads, hidden Terms and Conditions, and even restrictions on withdrawals.
Regulatory authorities can provide a level of protection for investors as they can be trusted to restrict, sanction or ban such unwarranted actions, and to safeguard investors when regulation has been breached.
eXcentral continues to work closely with CySEC on a daily basis, to ensure that all activity is overseen. This task is performed by various departments in the company, including marketing and account managers. By overseeing all business activities, eXcentral pursues its own and its regulator’s goal of offering traders a safe platform to access the Financial Trading Markets from.
https://eu.excentral.com/blog-article/?articleId=33427
Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing investing advice or a recommendation, or an offer of or solicitation for any transactions in financial instruments or a guarantee or a prediction of future performance. Past performance is not a guarantee of or prediction of future performance.
Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.42% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
submitted by eXcentralEU to excentral [link] [comments]

eToro: impressions, doubts and (ignored) lessons from copy trading

(no promotional content, no affiliate links)
Hi,
exactly four years ago, I started copying eToro investors / traders that I selected using the broker's built-in search engine (profitable in last two years, already being copied by others), followed by manual filtering, to take into account fluctuations in yearly returns, composition of their portfolios etc. With that, I got a list of 10 people whom I started to copy on a demo account:
https://drive.google.com/file/d/1u52f0XHfr-LauIscKcFDYF0yGTTUr6VY/view?usp=sharing
In the screenshot you can see that in case of the first two of them the amount invested was $10,000, while for the rest it was just $100. This is because I started copying the first two a couple of weeks earlier; eventually I changed this into $100 the same day I made the screenshot and this is when my calculations start - so this thing is irrelevant, I just cannot travel in time to make another screenshot.
What I did after that?
Well, within the next six weeks my profits oscillated between -$11 and +$9.50 (the biggest profit was on Nov 9, a day after US presidential elections). I found this "boring" and discontinued experimenting with copy trading.
Today I looked back at those ten traders. Here is what I found. Firstly, seven of them are not with eToro anymore; investorNo1, Simple-Stock-Mkt, tradingrelax, 4exPirate, primit, Gallojack, xjurokx. The other three traders are:
My observations and thoughts are as follows:
  1. Seven out of ten traders are not with eToro anymore, which makes me wonder why. I have no proof but my guess is they simply performed poorly, lost their copiers and closed their accounts. This is already alarming but what if they opened another account? Or, even worse, multiple accounts? They could be investing small money and try different risky approaches, hoping that at least one account will turn out profitable in the long turn, attracting potential copiers. (I'm not claiming that those 7 particular traders did this, it's just my general suspicion regarding some of eToro traders)
  2. I'm unable to calculate what would be my profit if I never stopped copying them, because I cannot check at what day and with what profit those seven traders left eToro. I'm guessing this would be an immense loss. On the other hand, considering the three traders who are still with eToro, I would lose more than a quarter of my assets!
What now?
I must be a quite adventurous person or at least an incorrigible optimist, because a month ago (exactly on Aug 26th) I started copying three traders with real money. Here is who they are.
rubymza (Heloise Greeff)

OlivierDanvel (Olivier Jean Andre Danvel)

rayvahey (Raymond Noel Vahey)
What was my strategy to hand-pick these particular traders? First I did some basic scanning using eToro's built-in search engine. The most important filter was that the trader was profitable within the last two years: unfortunately, eToro does not allow to reach details of earlier performance automatically. To know how the trader performed before 2019, I had to look at stats in the profile of each of them. I was also taking into account how often they trade (to avoid those who do only a couple of trades yearly), whether they were trading recently and whether they write posts regularly in their feed. With this, I got a list of fifteen candidates to copy:
As you already know, I finally chose three of them. Rubymza seemed to be the most trustworthy stock trader, based on profits, posts feed and regular trading, among other things. Regarding OlivierDanvel, his uniqueness is the ability to record continuous profits with the Forex market. Finally, with rayvahey I wanted to increase my exposure to the commodities market.
Wish me good luck!
Michael

P.S.
You might find those copy-trading related readings interesting:

Disclosures:
submitted by investing-scientist2 to StockMarket [link] [comments]

ASIC Regulation Thread - Regarding the proposed changes ( Australians effected the most )

I'm hopeless at formatting text, so if you think you can structure this post better take everything i write and put it into an easy to digest way. I'm just going to type out everything i know in text as fast as possible. I'm not a legal expert, I'm not somehow who understands every bit of information in the PDF's below, but i know I'm a retail trader that uses leverage to make profit which is why I'm posting this, in the hope that someone who can run a charge better than me, will.
Some of you are already aware of what might be happening, this is just a post to educate retail traders on changes that might be coming to certain brokers. This effects Australian Customers the most, but also effects those living in other countries that use Australian brokers, such as Pepperstone and others.
Last year in August 2019, ASIC ( Australian Securities and Investments Commission ) was concerned about retail traders going into Forex and Binary options without understanding these instruments properly and started sticking their noses in for tough regulation.
ASIC asked brokers and anyone with interest in the industry to write to them and explain what should and should not change from the changes they proposed, some of the proposed changes are very misguided and come from a lack of understanding exactly how OTC derivatives actually work.
I will provide the link to the paper further down so you can read it yourself and i will provide a link to all the submission made by all parties that sent submissions to ASIC, however the 2 main points of debate are:
1, To reduce the overall leverage available to retail traders to either 20:1 or 30:1. This means people who currently use leverage such as 100:1 to 500:1 and everything in between will be effected the most, even more so are those traders with relatively small accounts, meaning in order to get your foot in the door to trading you will need more capital for it to be viable.
^^ This point above is very important.
2, The removing of Binary options trading, which basically includes products like "Bet if gold will rise to this price in the next 30 seconds" This sort of stuff. So far from all the submissions from brokers and individuals nobody really cares if this changes as far as i know, though if you have concerns about this i would start voicing your disapproval. Though i would not waste your time here, all is pointing to this being eradicated completely with brokers also supporting the changes, I've never used such a product and know very little about them.
^^ This point above isn't very important and will probably be enforced in the future.
Still to this day i see retail traders not understanding leverage, they think of it as "dangerous and scary", it's not, position size is the real danger, not leverage. So ASIC is aiming to limit retail traders access to high leverage, they are claiming it is a way to protect traders who don't really understand what they are getting into by attacking leverage and not the real problem which is position size relative to your capital.
If it was truly about protecting retail traders from blowing up their accounts, they would look for ways to educate traders on "understanding position sizes and why it's important" rather than attacking leverage, but their goal is misguided or has an ulterior motive . I will give you a small example below.
EXAMPLE - We will use 2 demo accounts for demonstration purposes. If you don't understand my example, i suggest you try it for yourself. - Skip if not interested in examples.
Lets say we open 2 demo accounts with $1000 in both, one with 20:1 leverage and one with 500:1 leverage and we open an identical position on both accounts ( say a micro lot '0.01' on EURUSD ). You are safer on the 500:1 account as you don't need to put up as much margin as collateral as you would on the 20:1. If the trade we just opened goes against us and continues against us, the account with 20:1 leverage will run out of free margin a lot faster than the 500:1 account. In this simple example is shows you that leverage is not dangerous but safer and gives you a lot more breathing room. This trade was a small micro lot, so it would take hundreds of pips movements to get margin called and blow up that $1000 on each account. Lets now use a different position size to truly understand why retail traders blow up accounts and is the reason why trading can be dangerous.
This time instead of opening a micro lot of '0.01' on our $1000 dollar demo accounts, lets open a position size much larger, 5 lots. Remember we only have $1000 and we are about to open a position much larger relative to our capital ( which we should never do because we can't afford to do that ) the 20:1 probably wont even let you place that trade if you don't have enough margin as collateral or if you could open the position you would have a very tiny amount of free margin left over, meaning a small pip movement against you will instantly blow up your $1000 account. On the 500:1 account you wouldn't need to put up as much margin as collateral with more free margin if the trade goes bad, but again a small movement could blow up your account. In this example, both accounts were dangerous because the lack of understanding position sizes, opening a position you can't afford to open. This is what the true danger is, not the leverage.
Even in the second example, the higher leverage would "margin call" you out later. So i would go as far to say that lower leverage is more dangerous for you because it margin calls you out faster and just by having a lower leverage doesn't stop you from opening big positions that can blow you up in a 5 pip movement anymore, any leverage size is dangerous if you're opening positions you can't afford to open. This is also taking into consideration that no risk management is being used, with risk management higher leverage is even more powerful.
ASIC believes lowering leverage will stop people opening positions that they can't afford. When the reality is no matter how much capital you have $500, $1000, $5000, $50,000, $500,000, $5,000,000. You don't open position sizes that will blow that capital up completely with small movements. The same thing can happen on a 20:1 or 500:1 account.
Leverage is a tool, use it, if your on a lower leverage already such as 20:1, 30:1 it means your country has been regulated and you already have harder trading conditions. Just remember higher leverage allows you to open larger position sizes in total for the amount of money you own, but the issue is NOT that your using the higher leverage but because you are opening positions you can't afford, for what ever reason that is, the only fix for this is education and will not be fixed by simply lowing leverage, since you can just as easy blow up your account on low leverage just as fast or if not faster.
So what is going on?
There might ( get your tinfoil hats on ) be more that is involved here, deeper than you think, other agendas to try and stop small time retail traders from making money via OTC products, theories such as governments not wanting their citizens to be traders, rather would prefer you to get out there and work a 9 to 5 instead. Effective ways to do this would be making conditions harder with a much larger barrier of entry and the best way to increase the barrier of entry for retail traders is to limit leverage, lower leverage means you need to put up more money, less breathing room for trades, lower potential. They are limiting your upside potential and the downside stays the same, a blown account is a blow account.
Think of leverage as a weapon, a person wielding a butchers knife can probably destroy a person wielding a steak knife, but both knifes can prove fatal. They want to make sure your holding the butter knife then tell you to butcher a cow with it. 30:1 leverage is still workable and can still be profitable, but not as profitable as 500:1 accounts. This is why they are allowing professionals to use high leverage, this gives them another edge over successful retail traders who will still be trying to butcher a cow with a butter knife, while they are slaying limbs off the cow with machetes.
It's a way to hamstring you and keep you away rather than trying to "protect" you. The real danger is not leverage, they are barking up the wrong tree, how convenient to be barking up the very tree most retail traders don't fully understand ( leverage) , pass legislation to make trading conditions harder and at the same time push the narrative that trading is dangerous by making it even harder. A full circle strategy to make your trading conditions worse, so you don't succeed.
Listen carefully especially if you trade with any of the brokers that have provided their submissions to ASIC. Brokers want to seem like they are on your side and so far some of the submissions ( i haven't read them all ) have brokers willing to drop their leverage down to 30:1 because they know by dropping the leverage down it will start margin calling out their clients at a much faster rate, causing more blown up accounts / abandoned accounts with residual margin called funds, but they also know that if they make trading environments too hard less people will trade or even worse move their funds elsewhere offshore to unregulated brokers that offer higher leverage.
Right now it's all just a proposal, but as governments expand and continue to gain more control over it's citizens, it's just a matter of time till it's law, it's up to you to be vocal about it, let your broker know that if they drop their leverage, you're out, force them to fight for you.
If you have any more information related to this, or have anything to add, post below. I'm not an expert at this technical law talk, i know that i do well with 500:1 leverage and turn profits with it, it would be harder for me to do on a lower leverage, this is the reason for my post.
All related documents HERE
CP-322 ( Consultation paper 322 ) & Submissions from brokers and others.
https://asic.gov.au/regulatory-resources/find-a-document/consultation-papers/cp-322-product-intervention-otc-binary-options-and-cfds/
submitted by southpaw_destroyer to Forex [link] [comments]

API Only Broker

edit to add: Thanks /joeledg for the suggestion on LightSpeed, I looked into them more deeply and have engaged with Robert Morse over on Elite Trader. They do tick off all the boxes (except the last, but that's really last on my list and not important) below. Please ignore the total misinformation (what really is the point of that??) you'll find in the responses below.
https://www.lightspeed.com/automated-trading/
I ignored them before because of lack of API focus, but just found they support colo/cross connect as well as everything else on the list. So that is pretty savvy.
It's possible the retail API trader is too small of a market to focus on exclusively, but that doesn't stop with providing them good service anyways. I still think there's an opportunity there with the right prioritization and engineering team, but that's a different discussion.
--
Looking for a broker, ideally API Only. (Competitive with IB!)
Some ideal features -
Add your ideas, fellow algotraders.
submitted by blazespinnaker to algotrading [link] [comments]

Scalping: Futures vs Forex

I'm curious if anyone here has endeavored in scalping at both markets and what are your thoughts in the whole thing.
If your strategy is based on price action and/or DOM, and you only stay in the trade for a few minutes, then in theory all you should care about is liquidity and commissions.
Wondering how things really are in practice.
 
Disclaimer: so far I have only scalped options. But I'm thinking on moving to either futures or forex. The reason being liquidity.
I recently opened a forex account, although it's still unfunded. However, being in the EU and all, I don't know how easy, or if possible, is to open an account with those fancy futures brokers.
submitted by money_kat to Daytrading [link] [comments]

Copy trading with eToro: impressions, doubts and (ignored) lessons

(no promotional content, no affiliate links)
Hi,
exactly four years ago, I started copying eToro investors / traders that I selected using the broker's built-in search engine (profitable in last two years, already being copied by others), followed by manual filtering, to take into account fluctuations in yearly returns, composition of their portfolios etc. With that, I got a list of 10 people whom I started to copy on a demo account:
https://drive.google.com/file/d/1u52f0XHfr-LauIscKcFDYF0yGTTUr6VY/view?usp=sharing
In the screenshot you can see that in case of the first two of them the amount invested was $10,000, while for the rest it was just $100. This is because I started copying the first two a couple of weeks earlier; eventually I changed this into $100 the same day I made the screenshot and this is when my calculations start - so this thing is irrelevant, I just cannot travel in time to make another screenshot.
What I did after that?
Well, within the next six weeks my profits oscillated between -$11 and +$9.50 (the biggest profit was on Nov 9, a day after US presidential elections). I found this "boring" and discontinued experimenting with copy trading.
Today I looked back at those ten traders. Here is what I found. Firstly, seven of them are not with eToro anymore; investorNo1, Simple-Stock-Mkt, tradingrelax, 4exPirate, primit, Gallojack, xjurokx. The other three traders are:
My observations and thoughts are as follows:
  1. Seven out of ten traders are not with eToro anymore, which makes me wonder why. I have no proof but my guess is they simply performed poorly, lost their copiers and closed their accounts. This is already alarming but what if they opened another account? Or, even worse, multiple accounts? They could be investing small money and try different risky approaches, hoping that at least one account will turn out profitable in the long turn, attracting potential copiers. (I'm not claiming that those 7 particular traders did this, it's just my general suspicion regarding some of eToro traders)
  2. I'm unable to calculate what would be my profit if I never stopped copying them, because I cannot check at what day and with what profit those seven traders left eToro. I'm guessing this would be an immense loss. On the other hand, considering the three traders who are still with eToro, I would lose more than a quarter of my assets!
What now?
I must be a quite adventurous person or at least an incorrigible optimist, because a month ago (exactly on Aug 26th) I started copying three traders with real money. Here is who they are.
rubymza (Heloise Greeff)

OlivierDanvel (Olivier Jean Andre Danvel)

rayvahey (Raymond Noel Vahey)
What was my strategy to hand-pick these particular traders? First I did some basic scanning using eToro's built-in search engine. The most important filter was that the trader was profitable within the last two years: unfortunately, eToro does not allow to reach details of earlier performance automatically. To know how the trader performed before 2019, I had to look at stats in the profile of each of them. I was also taking into account how often they trade (to avoid those who do only a couple of trades yearly), whether they were trading recently and whether they write posts regularly in their feed. With this, I got a list of fifteen candidates to copy:
As you already know, I finally chose three of them. Rubymza seemed to be the most trustworthy stock trader, based on profits, posts feed and regular trading, among other things. Regarding OlivierDanvel, his uniqueness is the ability to record continuous profits with the Forex market. Finally, with rayvahey I wanted to increase my exposure to the commodities market.
Wish me good luck!
Michael

P.S.
You might find those copy-trading related readings interesting:

Disclosures:
submitted by investing-scientist2 to InvestmentClub [link] [comments]

Why a Live Forex Chart is important For Traders

There are two common theories as far as live forex charts are concerned: The first is by the many forex traders who believe that live forex charts can never be used to win in a forex trade simply because they rely on demand and supply fundamentals. On the other hand, some investors believe that live forex graphs are a mirror reflection to a human mind; they are constant but prices can be predicted. Which is a fact and which is not? Forex Brokers Reviews
The truth is that live currency graphs work and deliver results. There is however one common misconception that must be cleared even before we get into how live currency charts work. Contrary to common belief, live charts are not used as tools to predict future variations in pair prices. The truth is that unlike scientific theories, prices are not determined by fixed aspects. If this was the case, live charts would be very predictable, and there would be no point in trade in foreign exchange, would there? This, however, does not mean that live charts are not useful to the foreign exchange trade. As a matter of fact, live forex tables are some of the most important tools in use in foreign exchange trading. Combined with technical analysis, live currency graphs can be some of the most valuable assets an exchange trader can have in the business.
With the help of live forex charts, you can know the moving averages and when the price has gone above or below. Day trading does not require much analysis apart from some real time history of price movements. It is a vital tool in a seasoned trader's toolbox and the newbie simply cannot do without it. Getting technical indicators upfront in real time has come as a big boon to online forex traders coast to coast. forex broker review
With live charts you can identify when the market has entered an overbought zone with the help of RSI. To enter and exit a trade and also for working on multiple indicators, you need live charts to guide you through. If two indicators like the RSI and MACD indicate buy signals, then you could buy and forex market requires taking decisions in a flash. To make profits and keep losses to the minimum, use forex live chart.
The live forex chart is a lifeline for the day trader wanting to close positions within a matter of a few minutes or hours. Usually a long term investor in the forex market does not need live charts, but day traders require keeping tabs on price changes by the minute. Top Rated Forex Brokers
Traders depend solely on the chart prices to plan their moves and they have to be real time stuff to be of any use. Depending on what type of trade you would be doing, you should select the right software for viewing forex charts. You can monitor every single move the currency pair makes as well as keep track of technical indicators.
Visit Here - Most Trusted forex brokers
submitted by Sure_Statistician384 to u/Sure_Statistician384 [link] [comments]

IM Academy - Are they/their "Affiliates" breaking FINRA regulations on Communications with the Public?

For the uninitiated, IM Academy, formerly iMarketsLive, is an MLM whose scheme centers around a SaaS model for their forex (foreign exchange) trading software. I'm still early in the research, but I think the way they get around the legal definition of a pyramid scheme is by providing referral commissions to their affiliates, who are the ones ultimately posting about their purported 'success' and the opportunities they want to share with their friends and families and doing the recruiting.
Now, perhaps save for the ballsier MLM brands involved in health and wellness products, where running afoul of the FDA is the primary concern (and having worked as someone designing junk mail for a health food/grocery store [the owner of which was decidedly ANTI MLM, thank apollo] for a decade, I can tell you that the magic "These statements have not been endorsed by the FDA. These products are not meant to diagnose, treat, cure, or prevent any disease." is almost an impervious shield, if you're not a total sketchman and literally saying those things in the ad copy for the product), the SEC and the FTC are the regulatory bodies at play; and FINRA, I believe, is the US regulatory body overseeing forex, specifically.
I dig economics. I like listening to economics shows. I've heard plenty of ads for forex trading solutions on the radio, and one constant is the inclusion at the end of the ad of a disclaimer saying, more or less, that 'Forex trading carries substantial risk and consumers should not trade more than what they can afford to lose', or something along those lines. Of course, the folks peddling IM Academy on facebook are just posting about the opportunity to make money trading forex.
That got me thinking -- if the company is paying these guys commissions on referrals for the software, they are effectively communicating to the public. FINRA has some very specific guidelines on this (emphasis mine):
Communications with the Public
NASD Rule 2210, applicable to all FINRA members, prohibits firms from making any false, exaggerated, unwarranted or misleading statement or claim in any communication with the public. Rule 2210 is not limited to a broker-dealer's securities and investment banking business. A firm's forex-related communications—whether the firm is acting as a dealer or is soliciting forex business for a dealer—must be fair and balanced and based on principles of fair dealing and good faith, and firms must provide a sound basis for evaluating the facts regarding both the forex market generally, as well as the customers' specific transactions. These obligations may not be waived or met by disclaimer.
New FINRA member firms that engage in forex-related activities must file their advertisements with FINRA. Rule 2210 requires any firm that has not previously filed advertisements with FINRA to file all of its advertisements at least 10 days prior to first use; this filing requirement continues for one year from the first submission. Rule 2210's internal approval, filing requirements and recording-keeping provisions also apply to forex-related communications. The rule requires that a registered principal give written approval of all advertisements and sales literature prior to use.
Rule 2210 prohibits predictions or projections of performance, or the implication that past performance will recur. Communications used by firms in connection with retail forex activities may not tout future returns. The rule prohibits the omission of material facts or qualifications that would cause a communication to be misleading. Accordingly, firms' communications must adequately disclose the risks associated with forex trading, including the risks of highly leveraged trading. Firms must also make sure that their communications with the public are not misleading regarding, among other things:
Am I onto something here? Even if IM Academy seems to skirt around the traditional definition of a pyramid scheme, their affiliates are breaking the regulations the company, at least, is obligated to adhere to.
This IM Academy scheme specifically seems particularly predatory. I can see a vast gulf between being out a few hundred bucks on shitty inventory you'll never push and forex leverages, which can sometimes mean you lose more than you put in.
submitted by ItsOtisTime to antiMLM [link] [comments]

Which is Better? Forex or Stock Trading? ⚖️ - YouTube The only Forex market you should trade E-mini Futures vs Forex, Which are Better to Trade? ☝️ ... Forex Trading Sessions - When Should You Trade? - YouTube Why You Should Consider Day Trading the Currency Futures ... What strategy should I use in trading forex futures and commodities Trading Futures vs Trading Forex

Currency futures, or FX futures, are another way individuals can trade their opinions regarding the economic prowess of nations around the globe. FX futures are a representation of what a foreign currency will be worth in U.S. dollars at a specific point in time. In contrast to the forex, FX futures are priced in U.S. dollars per unit of the foreign currency in question and have a defined ... Why Trade Forex: Forex vs. Futures. Partner Center Find a Broker. It’s not just the stock market. The forex market also boasts of a bunch of advantages over the futures market, similar to its advantages over stocks. But wait, there’s more… So much more! Liquidity “Mr. Futures, our short shorts look cool!” In the forex market, $6.6 trillion is traded daily, making it the largest and ... There are many ways to trade the currency market, also known as the foreign exchange or forex market.. Traders may engage in: Trading spot forex (with instant delivery or delivery up to two trading days) Currency futures (where the exchange rate is determined at the time of signing the contract and where delivery takes place at a specific date in the future) The minimal starting capital is $500, but $5,000 is recommended if you want a decent monthly income stream.; Forex trades 24 hours a day from 5 p.m. ET on Sunday to 5 p.m. ET on Friday. Not all these times are ideal for day trading, however. The best times to day trade forex depends on the pair being traded. So Should I Trade FOREX or Currency Futures? For the average investor who trades an account of $2,500 to $500,000 it is probably wiser, and more cost effective to trade Currency futures. The cost of trading will be lowest with this amount of funding and the roll-over rate will not dramatically impact your trading. If you are working with very little money ($250 to $2,000) OR trading with more ... Forex trading involves the trade of many currencies. Currencies fall into different categories. Some are most actively traded while others have slight trade. Maxican Peso(MXN) is now ranked at eighth position in world liquid currencies. Obviously it is not that widely traded as the USD, EUR or JPY, yet it is highly liquid in the markets of Latin America. In the past few years, Maxican Peso has ... Should you trade forex. The internet and automated trading have opened doors to active traders and investors all over the globe. Anyone can participate since there is an expanding variety of markets. To be able to make a very important decision about what should you trade stocks, forex, or futures you’ll have to understand your risk tolerance, to take into consideration account size, and ...

[index] [4119] [17851] [23972] [11085] [25139] [23658] [21439] [2294] [22425] [5542]

Which is Better? Forex or Stock Trading? ⚖️ - YouTube

Trading Futures vs Trading Forex will be the topic of this video. In the past, I have traded both products, and for awhile I preferred trading Forex, so I gave up Trading the Futures market for ... What strategy should I use in trading forex futures and commodities ... Anton Kreil Annihilates Retail Brokers and "Trading Educators " - Duration: 2:02:39. InstituteofTrading 2,401,577 views. 2 ... Live Coaching Offer: https://www.iamadaytrader.com/Master-Trader-Coaching-Class Free EBook http://ebook.iamadaytrader.com/ Free Training Manual http://... Which is Better? Forex or Stock Trading? http://www.financial-spread-betting.com/strategies/strategies-tips.html Check Mark's Premium Course: https://pri... The only Forex market you should trade http://trdr.ly/dtasubscribe Follow us on instagram: www.instagram.com/wanderingtrader Follow us on Facebook: www.faceb... Check Mark's Premium Course: https://price-action-trading.teachable.com/ 📞 Join Mark's TradersMastermind: https://www.tradersmastermind.com/mastermind Pl... Having trouble catching the BIG moves? Tired of always getting stuck in consolidation when you enter trades? What would it be like to know the exact time win...

http://binary-optiontrade.innituweesig.ga