InvestMacro FX

By James McKee – In a surprise move today the US dollar is on a breakaway path from its previous calamities against other major currencies. With figures like 1.3939 against the euro, 0.9597 versus the franc, 1.5878 against the pound, 1.0175 against the loonie, 0.9893 versus the Aussie and 0.7561 versus the kiwi, it is clear that the USD is rallying, but can this possibly last? Given the fact that many US banks are still stuck with foreclosed homes that they cannot sell, an ever exponentially increasing national debt, and skyrocketing unemployment I do not believe it can. Anything can be propped up for a time but in the end if anyone bothers to “peek around the curtain” what is inside the United States economy is not pleasant.

United States’ treasury bonds outnumber the TOTAL available money supply nearly 20:1 that means the United States is in bankruptcy twenty times over. Now, we are not alone in this quagmire, many countries are experiencing fiscal issues, however the United States currency is supposed to be the world’s money supply and stand as an example of what a currency should be worth ideally. Sadly this is far, far from the case currently and while there are certainly efforts being made in America to curb the downslide of the value of its currency there does not seem to be any simple answer to this problem. As the world watches and waits America’s debt holders grow uneasy, China for instance is beginning to invest less and less in American bonds and is moving towards other investments. China is the number one holder of American debt in the world.

So what does this spell out for the Forex currency exchange and the traders therein? It lets us know that there is going to be a correction on the horizon for the US dollar shortly and it is definitely going to be a profitable one. Given the number of available pairs it is certainly an appealing situation and one we should all be taking note of in the short term. The USD may make more gains tomorrow but I would not bet on it, watch these pairs like a hawk and be prepared to take a ride, everything which goes up must go down and USD definitely likes to fall fast, and hard. Happy trading!

About the Author

Author is a Forex trader and financial analyst residing in Denver, Colorado with 5 years of experience in trading with an attitude of cooperation through education. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.

By ProIndicators – Tradestation comprises of three fundamental concepts in trading without which success can’t be achieved. These three concepts are price action, volume and real time support with resistance. Each plays its vital role in tradestation but among them price action is the most pivotal.

Starting from the price action; one has to embed this in mind that trading without price and time will incur losses for you and leaving you no where. Price in the market is always correct and there is no magic want to rule it by all traders. Often different indicators are used but market decisions are always based on the price action prevalent in the market. Traders use sheathing indicators in their trading decisions but they prove to be a failure and result in losses.

Next is the volume in tradestation. If classic indicators of volume are used then it makes it difficult for the trader to understand its functioning in trade process. For an example if we take stock trading one may find huge inflow of volume as the market was closed all night. The next day it’s really tough to figure out the unexpected spikes indicated through the average indicators of volume. At noon traders will be in depression and will be adjusting their volume spikes till the market closes in the evening. You can hardly make sense of average volume when you analyze the market spikes the whole day. As a result a false picture of market volume is seen and the traders get confused.

Moreover, if traders change the timeframe of trading chart then different volume information will be indicated as different time duration will show up unusual volumes. It is not workable even in forex market. The volume will be quite different as the trader moves from one symbol to another in tradestation. Again it jumbles up the situation and makes it far harder to understand volume.

To understand volume in tradestation, the best indicator of all would be time segmented volume. It will help you to compare the current slab with previous slabs of exactly the same time frame over the last month. With time segmented volume you may compare one trading month of 21 days of the same time slab you choose. It depicts the true average percentage of each time slab over the past 21 days. This time segmented volume then becomes normalized indicator. This will hold true for all charts, symbols and time frames. Time segmented volume when normalized is the most authentic indicator when comparing days among each other.

In tradestation when you compare candlestick bar with the volume bar you look for either consistency or deviation in time segmented volume. This helps in analyzing the trading patterns. On the other hand if you compare volume with price action then valuable trading information can be taken. . This is of the vital importance to comprehend the volume first and then making a comparison between time segmented volume bars with the candlestick bar. Having complete overview of the three concepts of tradestation on may take fast and accurate decisions eventually earn profits.

About the Author

ProIndicators.com‘s high precision TradeStation. MT4 (Metatrader), NinjaTrader, indicators are astounding. Indicators that work with our custom strategies will work with Tradestation, Meta & Ninja platforms.

By ProIndicators

Forex trading systems have been developing over the years. It has changed from being available to only few identities for trade to becoming common to everyone with each passing day. What only big traders and bank could use before, now every individual has access to. Future and stocks were the first instruments which came into the scene and have been progressing since 20-25 years ago. Whereas, Forex system evolution took place some 15 years ago, and since then it has been changing every passing year. One of the recent change with which this evolution can be attributed to is the Fore system being available to average person which was not possible few years back.

Marketers have been trying to produce a system with characteristic of “Holy Grail” in which the system itself has the capability of recognizing conditions of market through which it can enter or exit on its own. There should be no or minimum human interference. Another thing which a system should have is high success rate with a cost that most people can afford. Moreover, humans are very emotional and this makes them sometime decide on illogical trading. Everyone would want a Forex system with above mentioned qualities.

“Holy Grail;” has not yet been invented because there is not product is the market which is perfect and has all the mentioned features. Nevertheless, the automated Forex system trading products have changed dramatically over the years and they have reached a level very near to that of perfect system. There are numerous products in the market which will catch you eye but in real most of them would just take your money instead of making it more for you. Market conditions are the elements on which current system base their signal on. Some of these systems will have a good success rate while some will not.

Naturally, superior Forex systems with good success rate would cost you more than systems which are not superior. One of the recent automated systems which I looked into was around $2000. The price is certainly high for some individuals but the overall system looked good and if you work it right, you will be able to recover your initial investment very quickly. Another thing which you should be aware of is the indirect cost of the bad system, by which you will lose your account money placed with your forex broker.

The most evolved product in the market is the one which considers the market, analysis it with programmed conditions and then makes decisions by executing the order to enter or to exit the trade. This system does not consider the emotions which people show and neither it needs any human monitoring or interference. Therefore, these systems have a general high trade in ratio of around 90%. However, there is one limitation which is associated with these Forex systems. It has a limited number of currency pairs, where some products would have only one and some just 4-5 pairs. Before deciding on your Forex system you need to fully analyze the market with your knowledge, experience and then make the final decision.

About the Author

ProIndicators.com is providing high precision TradeStation. Before deciding on your Forex system you need to fully analyze the market with your knowledge, experience and then make the final decision.

By Taro Hideyoshi – The greater staying power of traders the greater chance to win. Traders have to stay in markets long enough to win trades. Money management plays an important role in helping traders to survive in markets.

No one win every trades; money management help traders to reduce losses on losing trades. Moreover it also maximizes traders’ gains on winning trades.

All traders have ever heard about how important the money management but the most of them are still losing in understanding money management strategies.

To make traders clear and be able to find strategies of managing money that suit to them. Let us talk about a couple of simple and easy money management rules.

The 2% – 6% rules have been introduced in Dr. Alexander Elder’s book “Come Into My Trading Room”

The 2% rule is to protect traders from any single terrible loss that can damage their accounts. With this rule traders risk only 2% of their capital on any single trades. This is for limiting loss to a small fraction of accounts.

Besides a disastrous loss, a series of losses can also damage traders’ account. The 6% rule is lent to handle this. Traders have to set the maximum of accumulated loss for a month. When they reach that level of loss, they have to stop opening any new position for rest of the month.

These 2 rules are designed to protect traders from the two types of losses. Nevertheless the 2% – 6% would be change for each trader. For those who are able to accept the higher risk, they might adjust the 2% – 6% rules to 5% – 10%, where the 5% is used to protect the account from any single disastrous loss. While the 10% rules is used to protect traders from any series of losses in each month.

About the Author

Taro is an experience trader who trades in stocks, futures, forex. He strongly focuses on technical analysis, trading systems and money management.

If you would like to find more articles on MetaStock Tutorials, MetaStock Formulas, Trading Systems and Money Management. Please go to MetaStock Trading System.

By David Adams

I have little doubt that the contents of this article will agitate a few people, and infuriate even more. But I have sound reasons for writing on this topic and will try to make a case for the various choices I expound upon. Hopefully, my reasoning will resonate with a few people and perhaps turn a few heads. Needless to say, there are a wide range of investments being aggressively marketed to potential traders in the current economic environment. The average trader needs to be well-informed as to the potential risks, and potential rewards associated with the investment opportunities being offered.

I think one of the most important issues, especially of late, is the issue of transparency in financial reporting. Both the stock market and futures markets are highly transparent exchanges with well-documented recordkeeping and long-standing procedures in trading. There are well-established trading and clearing procedures in these two types of exchanges that have evolved over decades of trading and now function in nearly seamless fashion, despite the number of fiduciaries involved with each individual transaction. To be sure, the procedural methodology in stock trading and futures trading are well-established and well documented through legal precedent and published in a manner that each investor should have a firm understanding of the risks and procedures involved in these two investment classes.

But the question is a bit more complicated than simple standardized procedures, as some investments lend themselves to specific types of trading while other classes of investments are better suited for different types of investing. For example, the pure speculator will probably lean towards futures contracts in his investment portfolio because of the high level of leverage and volatility futures contracts inherently possess. On the other hand, a conservative investor with a longer-term investment horizon might favor a blue-chip stocks as his favorite investment class. While there are instances where stock investing can be quite volatile, by and large stock investing is a more stable investment than their volatile cousin, the futures contract. The important point here is for the average investor to match his investment goals with a class of investments that will meet his needs and expectations. For example, an investor who prefers very volatile investments in hopes of making a tidy profit in a relatively short period of time probably shouldn’t invest in blue chip stocks. While some erratic movement in blue-chip stocks is possible, they are generally fairly stodgy and methodical in price movement. On the other hand, another investor may truly enjoy the volatile price movement involved in trading oil futures, for example. Oil futures are often very volatile and it takes a steady and skilled hand to manage these investments profitably. Just the same, the potential for extraordinary profits over a short period of time is far more likely in oil futures than blue-chip stocks. I must add one caveat, though: the fact that volatility exists in a given investment class does not assure profit, it only assures movement and it is up to the individual investor to translate that movement into profit, as opposed to loss.

In recent years another investment class has appeared and it is called Forex. Opinions on the Forex market range from a wholehearted acceptance of the investment to some investors who are, to say the least, very wary of the Forex market. I trade the Forex market from time to time and have not encountered any of the alleged horror stories some investors claim occur. But I think it is important to note that the Forex market, as opposed to the stock and futures markets, has very little transparency. There is no exchange on which Forex pairs are essentially traded. The Forex market is a loose conglomeration of participating banks that clear Forex trades more or less independently. To date, the system has worked reasonably well and been free from any widespread accusations of fraud or wrongdoing. To my way of thinking though, the lack of transparency in the Forex market is something that needs to be rectified before I can wholeheartedly embrace the Forex trading system. Without standardized contracts, exchange oversight, and a centralized location the possibility for widespread problems simply outweighs the possible benefits the Forex system offers. I think at some point this need will be realized and the Forex system will develop a centralized exchange with standardized contracts as the public clamors for the uniformity common to all investment classes. But to date, the system is still a loose association of banks and financial institutions clearing the Forex trades.

To my way of thinking, I will stick with stocks and futures contracts and my trading until the Forex system advances to the point of uniformity. Of course, there are uniform currency futures available on the Chicago Mercantile exchange for those who are interested in trading currencies. On positive note, I have no doubt that the Forex markets will evolve into a more structured trading format in the near future.

About the Author

I encourage you to visit my site and sign up for the free nightly videos(a $500 value) where I share some of the techniques I have used to make me so successful. This is a great offer for new traders and intermediate traders who are not having the class success they expected. Click here to start receiving your informational and fact filled videos every night.

By Taro Hideyoshi

The Turtle Trading System was considered as a complete trading system.

What are components of a complete trading system?

A complete system must cover each of the decisions required for successful trading, which consists of 6 components as follows.

1. Markets – What to buy or sell

Normally, traders want to trade in high volume markets that trend well. So, traders should not stick with only one market if they do not want to reduce their chance to ride a trend.

This is the first decision traders have to make; what to buy or sell.

2. Position sizing – How much to buy or sell

This is the most important aspect of trading but is handled improperly by most traders.

The decision about how much to buy or sell affects both diversification and money management.

3. Entries – When to buy or sell

An automated trading system generates signals for buying and selling when market conditions match its definitions.

4. Stops – When to get out of a losing position

If traders want to succeed in long term, they have to know when to cut their losses.

The most important in cutting losses is to decide the stops before entering the trades.

5. Exits – When to get out of a winning position

Traders should also have their exits in mind before entering the trades.

A complete trading system must also address the exits of winning positions.

6. Tactics – How to buy or sell

Once signals are generated by systems, traders have to make tactical considerations how to execute their trades.

This will be seen clearly in larger accounts that entry and exit can result in market impact.

The turtle rules covered all these aspects of trading. That is why it was a complete trading system.

About the Author

Taro is an experience trader who trades in stocks, futures, forex. He strongly focuses on technical analysis, trading systems and money management.

If you would like to find more articles on MetaStock Tutorials, MetaStock Formulas, Trading Systems and Money Management. Please go to MetaStock Trading System.

By Vincent Parker

Contracts for Difference and Futures are both forms of financial derivatives. A financial derivative is an instrument whose value is derived from the underlying asset. In the case of CFDs and futures, the underlying asset may be a stock, bond, commodity or more. But the most common underlying asset for both CFDs and Futures is shares. There are three core differences between futures and CFDs. Liquidity, expiry dates and financing.

Liquidity is a standard issue for basically all futures exchanges except for the giant that is OneChicargo – the largest futures exchange in the world. Futures markets have become famous for slipped trade executions (slippage) and bad execution. This is because of the lack of volume associated with the trades. As futures are exchange traded products there is sometimes no counter party to execute the trade at the appropriate level, causing sporadic movements in the price of the future.

CFDs however have almost infinite liquidity because they are (mostly) not an exchange traded product. You are guaranteed to complete your opening order at the price you requested and that was displayed by your broker. While there is some slipped trade executions, this is usually due to synthetic price determination, not lack of liquidity.

Expiry Dates are another big difference CFDs have to futures. Expiry dates exist on futures because in the traditional sense, this is the date that the asset has to be delivered and the agreed price. Since most futures contracts are closed out before the expiry date occurs, the asset doesn’t physically get delivered but technically there is still one in place. This supports the financial markets and allows people who actually want to own the share (or other asset) the ability to obtain it.

Finally, financing is another differentiator between futures and CFDs. They are both leveraged products where there is a borrowing element involved in the purchase and interest is either paid or earned but CFDs are more like purchasing a share with a loan from the bank while futures have their leveraged components priced into the asset.

About the Author

123CFD is a resource for contracts for difference where we cover topics like CFD Trading Plans

By Taro Hideyoshi – The term Risk of Ruin in trading refers to the probability of losing entire trading account because of a string of losses.

For example if you are trading a futures contract, when you go long or sell the chances that the prices will move in the same direction as your opened positions is 50 percent. The odds indicate that if you trade ten times, you most likely will get five losses and five wins.

If your capital in trading account is $1000, what is the size of risk you would allow for each position? If you decide that you will get out of the position when you lose $100 which is ten percent of your account size. This means you will wipe out your account if you lose ten times in a row from the beginning.

What is the probability that you will lose ten times in a row? It is mostly impossible. But the problem is you still have chance of losing. As a matter of fact, I experienced this myself.

I thought that it was not possible for me to lose more than five times in a row. Since I technically analyzed the price movement by using charts and indicators, this should give me an edge to win a trade. I thought I have better than 50 percent chances to win. According to the Kaufman’s formula for calculating the risk of ruin as follow:

Risk of Ruin = ((1 – Edge) / (1 + Edge)) ^ Capital Units

Even though I had a period that the trades were in my favor, I won the trades many times in a row. My account continued to grow up but eventually, I faced the string of losses until my account was wiped out.

No one never lose even the greatest traders in the world, the most important aspect is you need the ability to stay in market. If you are wiped out from the market, you have no chance to win.

About the Author

Taro is an experience trader who trades in stocks, futures, forex. He strongly focuses on technical analysis, trading systems and money management.

If you would like to find more articles on MetaStock Tutorials, MetaStock Formulas, Trading Systems and Money Management. Please go to MetaStock Trading System.

By Cedric Welsch

Stories of successful Forex traders are out there if you look. One of the problems with figuring out whether or not the stories are true is that any good writer can make them up, sometimes even without ever having traded once in their life. So how do you find the real stories that not only inspire but also educate?

Forex trading is a skill that is learned over time. Systems are helpful and they can help teach you the ins and outs that would cost you a fortune to figure out by yourself. Yet no system can teach you exactly how you’re going to respond to certain situations.

For instance, if you’re using a system that has you starting off with pretend money, you’re developing a much needed skill. You’re learning and finding out what works, what doesn’t, and whether or not you’ve interpreted the material correctly. What it doesn’t teach you is how you’ll react when you are risking real money and things aren’t going as planned.

Stories of successful Forex traders can be very beneficial for helping you learn the broader scope of trading. They come from a different place than where you’re trading from because they are dealing with their own hard earned cash and that changes the whole ball game. You want to hear various stories that will be inclined to focus on this part of the trading, not the part where you’re trading pretend money.

The more you start to understand the Forex trading world, the easier it will be for you to find legitimate stories and draw real experience from them. You’ll be able to spot the made up stories that offer the same concept over and over. That concept is outlined with the success with pretend money, a stumble with the real money, and then success again.

When you take on Forex trading you’re entering a new world of self discovery and financial ups and downs. It’s not the same picture that you’ll see when you read promo blogs. There are some very interesting wins and very hard losses that can take place. The wins can really teach you just as much as the losses. Your goal here is to understand a new realm. This doesn’t happen with just one loss.

It’s not easy to transition from any career into another. What makes the transition into Forex trading so difficult is that it is usually so far removed from the career you are transitioning from. Thus, it’s a lot like going back to the beginning and starting all over again and learning a whole new career. Think about how long it takes doctors, lawyers, and car mechanics to become truly proficient at their jobs. Now you’ll understand what you’re looking for when you read stories of successful Forex traders online.

About the Author

Do you want to really make profits with forex? Make sure you get fresh updates ahead of everybody else here: Forex News

Also, you need to know how to read and analyze the trading market well. Learn Currency Trading News

By Cedric Welsch

Forex daily economic news updates move the market, sometimes radically. Economic news of different countries include reports on employment, productivity, consumer sentiment, manufacturing and trade balances. This is either good for the country and increases the value of their currency or indicates a problem and causes the currency value to go down. Investors in this market know when this is happening and adjust their plans accordingly.

These news releases are scheduled by each country as their government makes a formal announcement on the economic health of that country. Lists of these times are published many places. Investors know exactly when one of these events is going to happen in the currencies they are invested in. Some investors are content to ride out any market change and reaction; other investors exit the market ahead of time and do not reinvest for a certain period of time afterwards.

Forex daily economic news updates can cause dramatic movements. Sometimes this movement starts ahead of the announcement based on rumors or hopes. Many times the movement goes one way then corrects itself and moves in the opposite direction. Some investors have found themselves stopped out of the market at a loss only to watch this market move in the right direction; had they been able to stay in, they would have made a very profitable trade.

Experienced traders sometimes use a limit order to enter the market if the price is right, and a stop loss order to exit the market if the market moves against them. These orders may not work in a fast moving market. The market may gap passed either one causing the order to fail. This market may be moving so fast the order is not filled anywhere near where it was placed. Either way, the investor is not in control of the trade and is at the mercy of the market. A profitable trade at one price may become a losing trade at a different price. Failing to fill a stop loss order or filling it at a much different price drastically reduces an investment account.

Economic news is one of the major movers of the markets and is often looked forward to enthusiastically as an opportunity to make money. Forex daily economic news updates are an important market strategy for investors, either as an alert to watch the market and the market’s reaction or as a warning to exit the market for a period of time.

About the Author

Do you want to really make profits with forex? Make sure you get fresh updates ahead of everybody else here: Forex News

Also, you need to know how to read and analyze the trading market well. Learn Currency Trading News