Month: September 2010

By Chris Donnell – Forex trading can happen in a number of verying ways. There are swing trades that take up to a week to anticipate the time to hold a stock. Your win rate for this strategy is less than 50%, and you have to keep yourself from risking to much to protect your investment, therefore your lot sizes aren’t very big. There are intraday trends that you can check every few hours. You have a much higher likelihood of winning with this strategy, and you can trade more lots as well, giving you a win percentage of over 50%, with tighter stops and almost 100 pips a day.

Forex scalping trading system will be covered in the following article. When a trade scalps, their hold times are very short, and there’s no more than a 30 pip difference on their trades. Your win rates can go through the roof, due to the sheer concentration you are paying your trades and lots! You have hold times of mere minutes to act, or sometimes it’s up to an hour and a half; you might not be able to do this if you are just trying out Forex trading to supplement your current income, and you have a full time job to cut into your free time.

You always have to minimize your potential losses no matter what trading you do, trying to keep your gains above your losses. When you scalp, however, you can be a little more relaxed in this philosophy, since you have a much higher win percentage if adequately performed. If you have 10 pip stops, your wins can be 10 pips as well. You won’t find it hard to get a 10 pip move within an hour, due to the sheer amount that is moved between all the major markets in any given day. For example, if you have 20 pip stops on a third of your winning trades, you can find it absolutely within your power to take some other losses and start risking more – since you really have your eye on the market on a regular level, you can see how the markets are doing and adjust your trades accordingly; this way, even if trades go bad, you can minimize your losses and even win out a little bit, preventing any potential loss of money!

In order to find out the currencies that will increase and decrease in value, I have a lot of tools at my disposal; for those of you who have typical charts, you might just want to view a daily chart and buy the currenc when the trend is up, selling it when it then takes a downturn.

Just figure out how the trend has been going and see how today fits in. You can find a chart of the past hour’s movement and look at the 20 period scale. Buy the currency if its daily trend is increasing above the average it had this morning. On the other hand, sell it if you find it moving in the opposite direction and the price goes down.

You then perform the EXACT entry and exit procedure. It’s not that hard to use the Filter setting on the hourly MA, as soon as you get your trades moving in a favorable trend. You need to be looking for spikes in the trend. Once it starts pulling back, look at the trendlines for both the high and low points. If you have a high trend and spike, keep watching for 15 minutes to see any changes, then make your own trendline on the high points. Buy once you see an increase in price, using 5 pip stops. When you want to sell, wait for the exact opposite maneuver to happen. Once your low trendline is broken, go on in.

You can also scalp by charting out profit targets and Fibonacci retracements. Trendlines can come in handy if you come across either support or resistance, or it goes beyond the trendlines.

50 tick charts and 2.2 Keltner channels are perfect for most traders, and is what I’d recommended. Get the lower band if you see an upward trend. The upper band should be sold if a downward trend is witness. Either way, once you buy or sell, exit the scalp trading.

About the Author

Chris Donnell is CEO of LeverageFX and will teach you our best Forex System in our Forex Classes. Signup for 2 Weeks Free on our website LeverageFX.

By David S Adams – Among the many tools that technical traders utilize, none is more prized than Fibonacci retracements and extensions. By now, I’m sure that most traders are at least vaguely familiar with the origin of the Fibonacci sequence. If not, here is the quick version; mathematician Leonardo Fibonacci identified the sequence in the 13th century. He was actually trying to calculate how many rabbits he could breed when he discovered this sequence of numbers. Nonetheless, the Fibonacci sequence has become the basis for many applications in our society. Today we will be discussing how the Fibonacci sequence is utilized in various aspects of trading.

This sequence isn’t nearly as important as the mathematical relationship between the numbers in the sequence. The Fibonacci retracement numbers used in trading are derived by dividing the prior number in the sequence by the next number. For example: 61.8% is a very important number in the Fibonacci sequence for traders, 55/89 = 0. 6179 and hence you arrive at the Fibonacci retracement number of 61.8. There are other important Fibonacci retracement numbers and they are 38.2%, 50%, and 61.8%. These are the most common numbers used by traders.

Generally speaking, traders will draw a line from peak to trough, or trough to peak, depending on whether the market is moving up or down. They will then calculate where 38.2%, 50%, and 61.8% fall on that line drawn. These days though, nearly every charting program automatically calculates these Fibonacci retracement levels and inserts them for the trader.

There is no sound theoretical backdrop for why these numbers are so important in trading. Some traders feel that the Fibonacci retracement numbers are natural stopping points for price movement based upon trader emotion, while others believe that because of the widespread use of Fibonacci retracements the market responds as a self-fulfilling prophecy. In my trading days I have listened to countless arguments as to the legitimacy of the Fibonacci retracements system. There can be no doubt that the market, more often than not, tends to respect these lines. Of course, the reason they respect these lines is not entirely clear.

But does it really matter?

In my trading, I do not concern myself with the “whys” of Fibonacci retracements as it is unimportant to me. The facts are simple; the market typically pays close attention to these lines and therefore I pay close attention to the lines. In essence, it is a chicken and egg argument. I don’t care if the chicken came first, or the egg came first, I know that these lines are of importance and I regularly chart them.

The lines formed by the Fibonacci retracements are generally referred to as support and resistance. Support refers to the levels to the downside that the market moves, and resistance is the point where the price stops when moving upward.

Does the market always respect Fibonacci retracement price levels?

Unfortunately, the answer to this question is no. This is one of the confounding aspects of Fibonacci trading. While the market often, even usually, respects the price levels of the sequence, there are times when the market blasts through the support and resistance line as if they were not even there. So often times the trader is forced to decide whether the market is actually trading through the resistance levels or going to honor the resistance levels. It can be a tough call, at times. By and large though, the market pauses (at the very least) at the Fibonacci levels.

In summary, we have looked at the way the Fibonacci sequence was discovered in learn how to calculate the Fibonacci retracement levels. Generally speaking, these levels represent support and resistance when they are drawn from peak to trough, or trough to peak. It is unclear exactly why Fibonacci retracements function as they do, but they function with enough frequency that they draw the attention of most traders, especially technical traders.

About the Author

Sign up for our free daily e-mini instructional videos and get a feel for the method and techniques the E-mini Trading Professor employs. The videos are free and there is no obligation so go to http://www.learn-to-trade-and-invest.com and start learning immediately.

Bollinger bands will help you to forecast giant trending moves, act on big trend reversals and eventually, time trading positions with better accuracy for larger profits. Here we have related Bollinger bands to the foreign exchange markets ( as it is here that they’re most helpful ) – but they’re helpful in all fiscal markets. What are Bollinger Bands? Developed by John Bollinger, Bollinger bands are volatility bands drawn around a straightforward moving average. You figure out Bollinger bands using the standard deviation of price over the same period as moving averages and plotted as lines above and below the moving average. The gap between lower and upper Bollinger bands reflects the volatility of the market traded. Costs may spike short term, but will typically dip back to the long term moving average ( the centre band ) – which represents pragmatic value.

The volatility of the outer bands thus gives us an indicator of how fluctuating costs are – and how far away price is from longer-term value. Most price spikes are caused as much by trader psychology, as the demand and supply background – and this eventuality is mirrored in the idea of Bollinger bands. Why are Bollinger Bands so handy? Bollinger bands perform 3 major functions for traders : one. Noticing a Breakout and New Trend Markets move between low volatility trading ranges, to high volatility trending moves. When a market makes trades in a narrow range, the Bollinger bands will narrow together and this shows a market with very low volatility – however this is a notification that a high volatility trending move is probably going to follow.

When costs break above or below the higher or lower band, it’s an indication that a breakout and trend is preparing to develop – traders will then take a position in the direction of the breakout, and try and ride the trend. Two. Timing Entry Levels in a Trend everyone knows long-term currency trends last for months or years – but we want to get in at the best risk / reward level. Bollinger bands will help in getting you in to the trend and time your entry.

All you do is watch for dips toward the centre band – and enter in the direction of the trend – it actually is that straightforward! To time your entries with higher precision, and filter fake breaks we promote using a momentum indicator – like stochastics, to approve the move. Three. The spacing, or width of the band, is conditional on the volatility of the market, but gives traders a clear appearance of where costs will go, and when to enter. A note of warning! Bollinger bands are a helpful tool – but need mixing with other signals, as with any single indicator, they shouldn’t be utilized in isolation. We personally feel Bollinger bands should be used with basic charting, to get the big picture – and the best timing indicator is the stochastic as mentioned to clear out fake signals.

About the Author

Create your own trading systems at Best Trading Systems

Hiyo my avid forex fans! In my previous article about the euro, I mentioned that its recent rally after breaking down from what appears to be a head and shoulders formation could be over soon. However, a full blown breakdown and a reversal did not really pan out as the euro bulls were able to out-muscle the bears to place them back on top. As you can see from the EURUSD’s 4-hour chart, the bears were forced to cover their short positions when the price of the euro went back above the neckline of the head and shoulders. The pair actually found support at the 50% Fibonacci retracement level which interestingly lies almost in line with the psychological 1.2600 marker. For awhile, it met some resistance at the neckline and it even fell below the support of the rising wedge (please see my previous post here). But like I said, the euro was able to turn the tide to its favor.

Yesterday, the fiber of the EURUSD broke out from a bullish pennant pattern. Though, it would more likely range for awhile before making a move north. The stochastics, being in the overbought region, also suggests a temporary pause in its ascent. If its able to move past the resistance at 1.2900 then its next stop would be at 1.3000. A move past 1.3000 could propel it higher all the way to the peak of the head of the former formation.

The better-than-expected US employment report pushed the anti-dollar currencies like the EUR back into the spotlight. US firms only slashed 54,000 jobs as compared to the 101,000 estimate. The job cuts in the previous month were also revised downwards to 54,000 from 131,000. Still, the US’s unemployment rate rose slightly to 9.6% from 9.5%. Nonetheless, the encouraging jobs numbers (compared to the market’s consensus) lifted the investors risk appetite during the session.

No high impact economic reports are due this week in the euro zone. The euro, however, could take its cue from the developments in the other nations particularly in Australia, Canada, and the UK. Australia, the UK, and Canada will have their monetary policy decision this week. Australia and the UK are expected to keep their rates unchanged while Canada is anticipated to hike. Any hikes and/or hawkish statements could favor the non-dollar currencies including the euro.

More on LaidTrades.com …

By Warren Seah – The Fastest Growing Market of Our Time

According to the Triennial Central Bank Survey of the foreign exchange market conducted by the Bank for International Settlements and published in October 2007, daily trading volume hit a record of $3.2 trillion, up from $1.9 trillion in 2004. This is estimated to be approximately 20 times larger than the daily trading volume of the New York Stock Exchange and the NASDAQ combined.

Advantages of Trading Forex over Stocks and Futures

Around-The-Clock 24hr Market

The 24hr nature provides instant access to the markets at all hours of the day. This does not mean that you have to trade the market for the entire day. In addition, most people who want to trade the market have a full time job. This allows them to trade after work.

As the market only closes after Friday and reopens on Sunday, there will be a less tendency for market to gap up or gap down. The most active trading hours are when 2 markets overlap, for example US overlaps with Europe or Asia overlaps with Europe.

Lower Transaction Costs

Trading on the forex market does not go through a central exchange. You have no idea how many parties you will need to pay when you place a trade in stocks and futures. That explains why a person trading stocks and futures will pay much more in commissions and spreads to their broker.

Lower transaction costs make forex trading the best market to trade. In the forex market, because it is decentralised with no exchange or clearinghouse. These fees are not applicable.

Customisable Leverage

Most currency brokerage firms offer 100 times to up to 200 times leverage. While, trading with leverage is often said a double edged sword, it helps you make more money or helps you lose more money over a short period of time, few of them find it easy to turn away the opportunity to trade on someone else’s money.

Trading with leverage involves more risk. However, this risks are manageable if a trader uses a strict money management. He can effectively grow his money much faster then someone who does not use leverage at the same level of risk.

Profit in Both Bull and Bear Markets

Robert Kiyosaki, the author of Guide to Investing,, in his book he said that a true investor can both profit in a bull market and also in a bear market. In forex market, you can long the market or short the market. Shorting the market is as easy as you are long on the market.

This is different from the stock market, where most traders go long instead of short stocks, so that generally, they can make money in a bull market but tend to suffer in a bear market.

No Trading Curbs or Uptick Rule

The uptick rule when you are shorting does not apply in the forex market. That is, you aren’t penalise to short the forex market. Shorting and longing the market provide the balance and is necessary for a healthy and efficient market.

Instant Execution of Order

Orders are executed within seconds and filled at the price that you want to buy. Order execution is almost instant, it has limited slippage. That is most often you will buy at the price you want.

Order execution is guaranteed. However, at times when market is very volatile, you may receive a re-quote from your broker informing you that you cannot buy at the price because the market has moved. A subsequent new price is available for you if you decide to make a trade.

Perfect Market for Technical Analysis

Over 80% of volume in forex market is speculative in nature. Hence, technical analysis works well for the forex market and the technically trained trader can easily identify new trends and breakouts, which provide multiple trading opportunities.

Many technical indicators and charting tools like fibonnacci and gann analysis are provided free in the trading platform. The platform I recommend forex beginners traders to use is Metatrader 4. Price feeds, technical indicators and charting capabilities are all provided free. You can try and test your strategy before you decide to trade the forex market with your own money.

The Fastest Growing Market of Our Time

According to the Triennial Central Bank Survey of the foreign exchange market conducted by the Bank for International Settlements and published in October 2007, daily trading volume hit a record of $3.2 trillion, up from $1.9 trillion in 2004. This is estimated to be approximately 20 times larger than the daily trading volume of the New York Stock Exchange and the NASDAQ combined.

Advantages of Trading Forex over Stocks and Futures

Around-The-Clock 24hr Market

The 24hr nature provides instant access to the markets at all hours of the day. This does not mean that you have to trade the market for the entire day. In addition, most people who want to trade the market have a full time job. This allows them to trade after work.

As the market only closes after Friday and reopens on Sunday, there will be a less tendency for market to gap up or gap down. The most active trading hours are when 2 markets overlap, for example US overlaps with Europe or Asia overlaps with Europe.

Lower Transaction Costs

Trading on the forex market does not go through a central exchange. You have no idea how many parties you will need to pay when you place a trade in stocks and futures. That explains why a person trading stocks and futures will pay much more in commissions and spreads to their broker.

Lower transaction costs make forex trading the best market to trade. In the forex market, because it is decentralised with no exchange or clearinghouse. These fees are not applicable.

Customisable Leverage

Most currency brokerage firms offer 100 times to up to 200 times leverage. While, trading with leverage is often said a double edged sword, it helps you make more money or helps you lose more money over a short period of time, few of them find it easy to turn away the opportunity to trade on someone else’s money.

Trading with leverage involves more risk. However, this risks are manageable if a trader uses a strict money management. He can effectively grow his money much faster then someone who does not use leverage at the same level of risk.

Profit in Both Bull and Bear Markets

Robert Kiyosaki, the author of Guide to Investing,, in his book he said that a true investor can both profit in a bull market and also in a bear market. In forex market, you can long the market or short the market. Shorting the market is as easy as you are long on the market.

This is different from the stock market, where most traders go long instead of short stocks, so that generally, they can make money in a bull market but tend to suffer in a bear market.

No Trading Curbs or Uptick Rule

The uptick rule when you are shorting does not apply in the forex market. That is, you aren’t penalise to short the forex market. Shorting and longing the market provide the balance and is necessary for a healthy and efficient market.

Instant Execution of Order

Orders are executed within seconds and filled at the price that you want to buy. Order execution is almost instant, it has limited slippage. That is most often you will buy at the price you want.

Order execution is guaranteed. However, at times when market is very volatile, you may receive a re-quote from your broker informing you that you cannot buy at the price because the market has moved. A subsequent new price is available for you if you decide to make a trade.

Perfect Market for Technical Analysis

Over 80% of volume in forex market is speculative in nature. Hence, technical analysis works well for the forex market and the technically trained trader can easily identify new trends and breakouts, which provide multiple trading opportunities.

Many technical indicators and charting tools like fibonnacci and gann analysis are provided free in the trading platform. The platform I recommend forex beginners traders to use is Metatrader 4. Price feeds, technical indicators and charting capabilities are all provided free. You can try and test your strategy before you decide to trade the forex market with your own money.

About the Author

Warren examines commercial trading systems and has researched and analysed systems to uncover systems which bring in consistent profits.

Click Here For More Guides On Auto Forex Systems

http://www.FxEAReview.com

Welcome to a brand new month of trading! In today’s feature is the monthly chart of gold (kindly check here for my last post on it). The month of August was a good one for the gold bulls as the price of gold was able to rebound after if fell to a low of $1,157.15 per ounce after tapping a new all-time high of $,1265.05 back in June. As you can see, the price of gold sprung back after finding some support at its 19-month uptrend line (black trend line). Presently, it seems that gold is poised for a bullish breakout since it has been consolidating within  an ascending triangle for the last 5 or 6 months. If it’s able to move above the high at $1,265.05, it could set a new high by potentially reaching $1,500.000 (gauged by measuring the height of the triangle). However, if it is unable to do so and the black uptrend line breaks, the price of gold could fall all the way down to $1,000.00 or even back at the longer term uptrend line (blue line).

The commodity dollars like the Aussie, Kiwi, Swissy, and Loonie could benefit from the gold move upwards. Why? Well, the mentioned currencies have about 80% correlation with the price of gold. Hence, whenever gold loses value, the comdolls tend to fall as well and vice versa. A rise in gold prices could at least temper these currencies’ move downward. An upside move could likewise benefit the mining industry particularly those companies which produces gold. Of course, the mining companies’ revenues and profits would increase even if the volume of their production remains the same.

More on LaidTrades.com …

By Owen Trimball – You could have heard the expression “do one thing, do it well”. This was never so true as it is in relation to the matter of trading the markets. There are many option trading systems available and the developers of those systems will always tell you that theirs is the one that will solve your financial problems and give you the freedom you’ve dreamed about.

And some of them might be right.

Some systems will show you that all you require is the RSI and volume indicators only, together with a couple of moving averages and bollinger bands. Others will concentrate on the ADX or the CCH indicators and their systems will focus around that.

Other option trading systems might be basic and involve only going long, or ‘buying to open’ with the objective of selling to close at a profit within a very short timeframe. They will give you each of the indicators and chart setups to accomplish this. Others will emphasise longer term approaches that depend on option time decay. Some systems will involve directional trading, in other words, predicting future market direction for the short term, while others will teach you about ‘delta neutral trading’ and preach strategies such as straddles and strangles which will make you a good profit as long as the market makes a substantial move one way or the other.

Many of the above option trading systems may be great in themselves, but here’s the best tip you’ll ever get from someone who’s done it all. The most important thing is, find one or more strategies which you understand well and that you’ve had regular success with and just keep doing it. Don’t allow yourself to get distracted by trying new strategies using real money, because you’ve seen the latest DVD or read some book that claims how someone made a million with it.

It’s really as simple as that.

I remember a time in my trading life when I was using an option trading system that really worked for me. I started with about $5,000 and within a short time, transformed it into a bank account of over $20,000. I did this running a simple ‘buy to open’ and ‘sell to close’ technique that i had learned from a guy named Nik Halik, combined with a selection of straddle trades. I was doing really well.

But then I became impatient. The market I was trading in didn’t have the kind of liquidity that allowed me to always take a trade when I saw an opportunity. So I decided to change from trading options to doing CFDs. At that time, I was learning about ‘ABC swing trading’ as outlined by W.D. Gann and changed how I analyzed chart patterns and picked opportunities without fully comprehending the context in which this system works. Now whilst CFDs are far more liquid than options, they also involve much greater associated risk due to the amount of leverage involved. Unlike option trading, you can lose more than your outlay, so the psychology wasn’t good for me either. So many times, I found myself stopped out, only to have the stock take off in the direction I had anticipated in the first place. I lost most of the money I had made from my previously successful option trading system.

The point is, you must stay focussed on a system which you feel confident with and that has proven itself to work for you. Don’t allow yourself to be distracted by other systems that look fantastic on the surface, but may not be compatible with your trading style or available concentration time – or that you simply may not yet understand well enough to apply effectively.

Over 90 percent of trading success is all about your own psychology. It’s the crucial thing that causes you to make all your trading choices. This is why you have to enter the market with confidence, knowing that no matter what trading system you have followed, you know it well, have proven to yourself thatit works, know the risks and believe that with patience and self-discipline, it will make you a reliable income for the rest of your life.

If you don’t have all this, there are three little words I have for you, right here, right now. DON’T DO IT!

About the Author

Owen has traded options for many years and writes for “Options Trading Mastery” – a popular site about the best option trading strategies and the option trading systems other successful traders use.

Pick your movie metaphor, but it appears that the U.S. Dollar and the Euro are entwined in their own version of the “Last Tango in Paris”, where neither is sure where the relationship will head, but time marches on.  Ever since the Greek debt crisis hit the global stage in May, markets have been in turmoil, until finally resuming something short of normalcy in the past few weeks.  Volatility has subsided.  Fundamentals seem to mean something once again, but uncertainty still hangs like a foreboding cloud over the horizon.

A look at the “EUR/USD” chart history for the past year does not reveal any hints of where it might head either:

Forex news reports have showcased the Euro’s ten-year march to fame and glory.  It bobbled in 2008 when Lehman Brothers went down, but resumed its march thereafter, only to tumble once again in May.  It rests now around the $1.30 mark, the same range it visited during its 2008 fall.  Perhaps, U.S. tourists and businessmen will get more for their buck when traveling to Europe these days, but there are more important issues to consider going forward.

The Euro and Greenback have been tied together in this sideways trading pattern for over a month.  German exporters are brimming with confidence and have been quick to grasp a competitive advantage in the global export market, luxury cars and all.  U.S. exporters remain hopeful, but the turmoil in commodity markets happened after planting season had already begun, leaving no opportunity to adjust priorities.  U.S. importers are eyeing European goods once again, but more imports, even at reduced prices, will only exacerbate a deficit-laden trade imbalance and weaken the Dollar more.  The two dance partners twirl about as all onlookers debate when the dance will end and a breakout will occur.

Europe has well-documented debt issues among its weaker member states, known euphemistically as the PIIGS (Portugal, Italy, Ireland, Greece, and Spain).  Concerns about a possible Greek default on its national debt are surfacing again in the news, and German bankers are disturbed that Spain has ignored requests for fiscal austerity and resumed public spending on national projects.  The U.S. has debt and deficit problems of its own, corporations are sitting on nearly $2 trillion in cash but will not hire domestically, and any government policy changes in an election year are highly unlikely.

On balance, the relative value of the respective economies may be deadlocked due to fundamentals for some time to come.  As for near-term projections, the analysts at Forecasts.org stand by their forecast of a weakening Dollar for the remainder of the year, as the Euro rises to $1.35 in December and crests at $1.36 in the quarter thereafter.  Although there has been a brief dollar comeback of late related to not only the Euro, but also other “basket” currencies, the question is will this strength hold if poor preliminary GDP news is released this Friday?  This entire week is laden with economic data releases, and consumer confidence figures and another speech by Fed Chairman Bernanke will complete the Friday trinity, so to speak.

The major “elephant in the room” that is blocking progress is the need for domestic growth.  Domestic growth creates employment and increases tax revenues that can reduce deficits and pay down debts.  According to the IMF’s recently published “World Outlook Report”, GDP growth for developed countries of the world has been on a 40-year decline from 4% in 1970 down to 2% for 2010 and the five years ahead.  A GDP growth figure of 1.5% is seen as necessary to provide enough jobs for the growing population on annual basis.  While we languish about 2%, developing countries are more in the 8% range, with China trying to rein their industrial growth machine back to 9.7% for 2010.

Gold has also made an incredible run up of 7% in the last four weeks, indicating that risk aversion is once again creeping into market psychology.  Concerns of a possible double-dip recession or a Greek default have investors worried.  Although corporate earnings were up in the stratosphere, the emphasis was on Asia for future growth, while most of Asia is presently consolidating their near-term growth plans.  Pessimists believe that a major drop in the S&P 500 is imminent.

But, the beat goes on, as does the “EUR/USD” dance.  In the “Last Tango in Paris”, Marlon Brando recants from his young French protégée, but soon presses for more commitment, only to be rebuked by a gunshot that leaves him dying on a staircase balcony.  The two lovers were “caught up in the frenzied beat of a carnal dance they could not seem to stop.”  Hopefully, our Greenback will have a better fate, or at least choose a waltz instead.

laidtrades.com

By Warren Seah

Never before has trading been done with so much ease and precision over the past decade. With the introduction of MT4 platform for Forex traders, traders can enjoy much more ease and automation with MT4 Expert Advisor function.

With MT4’s own mq4 language, you can create more automated strategies and introduce flexibility into your trading system. Meaning that you free up much more time from monitoring and can choose to spend more time to discover newer strategies.

The benefits of creating your own EA are aplenty:

1) Incorporate your manual strategy into automation 2) Do backtesting on your trading strategy against chart history to see the viability of the strategy 3) Execute your trade strategy precisely and accurately without much delay 4) Removes emotional attachment from your trade, allowing you to trade logically 5) Allows you to customize and make changes instantly when your strategies aren’t working to what you first foreseen

There are still many more and I leave that to you to find out. But I want to highlight to you is the endless possibilities that MT4 expert advisor function brings to a retail trader. Being in control of what you wish to create, you will learn more fundamentals to trading and important lessons as you seek to find trading strategies to be used in automation.

As most retail trader do not know the importance of trade management and exit strategies in trading where it might bore them, MT4 allows these boring topics to be brought together and put them all into automation if you have no wish to touch them.

This require initial manual work on your part to create your own MT4 trailing stop EA which can babysit your trades for you and exiting trades when the market tells it to do so. But creating an EA is not easy as you thought it might be as programming knowledge is needed. Normally for programming design by professionals will set you back a few thousand dollars but I can tell it is worth the price tag.

Why? Cause I am sure you do not want a slip shod attempt in creating a trade management EA that gives you problem especially when you are trading live account. But there is a way to look for a trade management EA without spending so much money. You have to tap into the expertise of the trader’s community.

Yes. Retail traders will always find a way to solve their trading problems and try to automate much of the process as possible, therefore they will create their own EA for themselves and also to share within the trading community at a much lower price.

I always believe that when you share and give back to the community, you will reap goodness in other areas. So look out for traders who develop their own systems and create their own EA that may suit your needs as well too. This saves you much time and money to create something similar.

About the Author

By Warren Seah

“Introducing 11 Exit Strategies, What Every Disciplined Traders Need … Go Without It You Could End Up Being A PIP VICTIM Just Like Thousands Of Traders Out There.”

Download Your Mt4 Trailing EA Now

By Warren Seah

Pros and Cons of EA Trading

With minimal investment and learning, you can trading automatically with a purchased EA and start profiting from the forex market. EAs are best working without intervention on your part. This is made on the assumption that the EA system providers provide regular updates of the strategy.

Advantages of Trading With an EA

1. Provides a Trading Plan

2. Monitor and Execute Trades On Your Behalf

3. Minimise the Tendency You Trade With Emotions

4. High Probability Of Entering At a Good Price

5. Provide Market Analysis at Lightning Speed With Little or No Error

6. Provide Money Management For You ( Calculation of Lot Size and Stop Loss )

7. Good Learning Tool For Trading (For beginning traders, this may be a best bet to make consistent money and to learn about trading the market)

8. Trade a system Researched by Professional Traders

9. Leverage On Professional Traders’ Experience As They Provide Updates to Their EA System at Little to No Costs

However, even if traders use EA, most of them will still lose money.

Weaknesses of EA trading

1. EA allow users to be lazy and they tend to become complacent, that is take on unnecessary risk banging on the idea that they will win all the time.

2. Believing that consistent profits in trading is all about having a good systems

3. Cannot handle loss emotionally or has low risk tolerance to losses

4. Do not conduct adequate research before buying EA

5. Do not understand how the EA Trades

6. Human intervention in EA trading is the last thing you want to do trading with EAs

7. Personal Characteristics do not Match That of an EA (A trend follower by nature will not like scalpers EA even if a profitable EAs is used due to the conflict)

It is very important that we know the limitations of EA and leverage on the EA’s strength in our trading business. At FxEAReview, we strongly believe in EAs trading. We provide research papers of commercial EAs with detailed analysis monthly. We are aware of the weaknesses of the EAs we are trading with.

However, we strongly encourage that beginning traders learn investing from books and start trading with a well researched EAs. We have learnt a lot from using these commercial EAs. The next step will be to design a system of your own and to trade your own system.

About the Author

Warren Seah examines commercial trading systems. He analyses to uncover good systems which bring in consistent profits in the long term.

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