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Forex Trading

Forex Trading Software – A Secret Way To Make Quick Money In Forex?

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When we talk about Forex Trading Software we mostly refer to software that can automate the forex trading process.

When you are trading on the stock market, you would typically choose one or more companies and start watching their shares. You will study their financial statements. You will listen to what other traders say about their stock value – whether it’s undervalued or overvalued. But whatever you do, it is unlikely that you will ever get access to the information that can really make or break a particular company. Things like technological changes that will make their products totally obsolete.

With forex it’s different – at least theoretically. The information about factors influencing the price movements of a particular currency is readily available to everyone, especially for the major currencies. So all you have to do is study that information and make money, right?

In real life, however, there are a lot of factors influencing currency movements. There are hundreds of currencies each having an effect on each other. To make an informed trading decision, you have to study all these factors and then try to determine which way the market is going to move for a particular currency. Unless you are a full-time trader with access to sophisticated data tracking software, this is a difficult task.

This situation led to the development of software that can to a large extent automate the trading process. It will study all market movements and its effect on technical indicators, like Bollinger bands, analyze that information and then produce a trading signal whether you should sell or buy a specific currency.

The good ones will also explain to you how it came to that decision. That way you can learn how to pick up market trends yourself and therefore get valuable trading experience. The cheaper packages simply produce a recommendation, without explaining how it arrived there. An example of the first category is Trading Solutions and of the second category Lazy Trading.

Sworn supporters of fundamental analysis will no doubt tell you that, although the software packages might technically be working fine, they are flawed in a very basic way. That movements in the value of a currency can not be predicted by studying things like moving averages – they don’t predict the price, they follow it. These traders will argue that currency movements are caused by fundamental factors: the balance of trade, interest rates and inflation.

Sworn supporters of technical analysis will of course explain that there’s no need to worry. The indicators will pick up when the currency reacts to any such incident and the forex trading software will in turn respond with a buy or sell signal for that currency.

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Forex Trading

Backtesting Explained (Part II)

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The first was doing automated Backtesting. Automated Backtesting is easy. The second method of Backtesting is performed manually and visually by the trader. The trader would take the historical data and scroll back in time on a chart and manually apply the trading strategy as if it was in a real time environment.

One of the major drawbacks with manual Backtesting is hindsight. How to eliminate the hindsight factor while doing manual Backtesting? The trader would advance the chart bar by bar in order to refrain from seeing price action subsequent to the trade at hand. This eliminates trading in hindsight that is detrimental to an objective backtest.

Manual Backtesting is complicated and difficult. It requires a lot of patience on part of the trader. The major disadvantage of Backtesting as compared to automated testing is the significant potential for human error in executing simulated trades and recording performance results.

Emotions are your enemy in trading. When you do manual Backtesting, these emotions can cause problems for your Backtesting results. The normal range of human emotions and biases that often interfere with actual trading can be a detrimental factor in achieving objective backtest results. Furthermore, it takes a great deal of work and discipline to simulate trades manually over a large data set without straying from the strict rules of the trading strategy.

These were some real disadvantages of manual Backtesting. However, this provides valuable trading experience although simulated but still a valuable trading experience that no automated backtest could possibly provide. Backtesting manually can provide the trader with the real feel for actually trading the strategy.

Backtesting can save traders a great deal of time and money that might otherwise had been wasted on trading unprofitable strategies. Backtesting whether done manually or automatically can be one of the most important elements of building a solid trading strategy.

Any mechanical trading system can be backtested. This leads us to the important question of autotrading. Autotrading is the latest fad especially in forex where the number of major currency pairs is only six and this makes programming autotrading easy. These autotrading systems are popularly known as Expert Advisors or Forex Robots.

The US Stock Market has got more than 50,000 stocks listed with them as compared to the forex market where there are not more than six major currency pairs. This makes programming a stock trading robot a bit complicated. However, during the past decade major breakthrough in computer programming has been made.

An autotrading system needs to be thoroughly tested before being put to live test. The only way to do this is through Backtesting. Backtesting is one of the most important components of testing an autotrading system. Big institutions like banks, corporations and hedge funds have always been taking benefit of these autotrading systems.

What type of trading strategies can be backtested and autotraded? These types of strategies are primarily technical in nature, and they must necessarily have rules and criteria that are unambiguous. Backtesting and autotrading are two important components of implementing trading strategies that generally do not rely upon the trader’s judgments or discretion.

Backtesting gives you the benefit of testing your trading system on a large historical dataset. Backtesting allows the trader to determine if a given strategy would have been profitable using past price data, which is an indication of how it might potentially perform in the future. In contrast, autotrading actually executes real trades automatically according to a pre – programmed set of instructions that sets trade entries, stop losses, and profit limits.

Mr. Ahmad Hassam has done Masters from Harvard University. Try This Cash Printing Forex Signal Service From Heaven! First practice on your Forex Demo Account! This and other unique content ‘forex’ articles are available with free reprint rights.

Forex Trading

Point & Figure Trading (Part II)

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The second most important variable for a point and figure chart is the reversal threshold. The most common amount of reversal threshold is three boxes or three points. A new column is only added when a reversal in an existing column exceeds the reversal threshold.

What should be the reversal threshold or the reversal amount before a new column is added? The reversal amount in pips is 30 pips if the box size is set at 10 pips and the reversal amount is set at three boxes. So in case of a rising X column, price would need to turn back by at least 30 pips before a new O column would be added.

The significance of these two variables, the box size and the reversal threshold should be clearly understood. These two variables make the point and figure chart so effective at representing only the most major market moves disregarding all minor fluctuations known as noise.

One of the best trading strategies in most common use with the point and figure charts is breakout trading since point and figure charts outline support and resistance so well. The point and figure charts are excellent indicators of both trend and support/resistance.

A double top is a potential bearish reversal signal in bar and candlestick charts. Now you must understand that there is a notable distinction between the bar and candlestick charts and the point and figure charts in the interpretation of double and triple tops and bottoms.

Are you familiar with the chart patterns like the double and triple tops and bottoms? They are taken as important reversal signals in the trend. However, a double top is a resistance point where traders should be looking for a bullish break to the upside on the point and figure charts. The same difference holds for the double bottoms as well as triple tops and bottoms.

Charts patterns like triangles are prevalent as well. Like the horizontal support and resistances levels on these charts, the main method of trading trendlines and pattern on the point and figure charts is through breakouts. Point and figure charts also have their own versions of diagonal trend lines which are drawn at 45 degrees.

Point and figure charts give a very clear view of the market movements. Price action is the most important aspect of technical trading. The point and figure charts focus exclusively on the price action.

Point and figure charts had originated in the’th century. Point and figure charts are still popular with traders today as an increasingly relevant analytical tool for forex traders. It is because of this clarity in viewing and interpreting the price movements that the point and figure charts have withstood the test of time.

Point and figure charts excel at representing clear evidence of such important technical characteristics as trend, support/resistance and breakout without the extraneous elements to clutter the picture.

Other data that is readily available on the bar and candlestick charts like time, period opens/closes are generally excluded on the point and figure charts. This leaves only the uncluttered purity of price action. Some may characterize point and figure trading as based upon pure price action.

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Forex Trading

Truth About Forex Books

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Forex books are common, but ones that have good information are few. The free books seem to always contradict them self and have repeat information that can be easily found in a search engine. If you are a new trader to forex, relying on a free book to get you to your success is a sure way to fail. They just do not offer the information a trader needs.

Looking through forex books that were free seemed to show that they just do not offer any golden information that will give results. Most of the free books had almost useless information in them that seemed to be obvious trading knowledge that even the beginner trader would know. If someone relies on free guides for information, I feel sorry for their trading that will fail.

Many forex books are out their that can be purchased for a certain price. I have had my share of purchased guides and it seems you get what you pay for. There is good information in the majority of them, but nothing that was phenomenal. On the other hand there were some purchased books that seemed to be just as useful as some of the free ones.

Similar in forex books was the fact that they avoid proper trading methods and management of trades. It almost seemed like there was no hope for any internet book offering forex trading wisdom. This was until I did some hard research on what the big traders use for their own success.

Sorting through all the forex books searching for one that had something to offer, this one method had more to offer than most of the forex books combined. It is no wonder the big traders have kept this as their little secret and chose not to share it with the public, the results are insane! In the first month of using this one method I had doubled my trading account and made record profits!

If your trades aren’t raking the money you need, you need to check out the “Big Wigs” Forex Books dominating method. Stop letting the “Big Wigs” feed you junk, take action and find out their untold secrets in their Forex Books today!

Forex Trading

Forex Analysis For Success

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Forex analysis has got to be the longest thing in forex to learn. If a trader had something that could speed up their analysis it would put them further ahead of the average trader. There had to be a way to make my forex predictions better. After some searching I soon discovered a method that the big traders use them self. This method seemed like something far greater than any before.

Properly making a forex analysis can be difficult if you do not know what things to asses in order to make the proper analysis. This is where many new traders seem to get lost. Not knowing what to look at to make your trading decisions off of is like gambling with your trades. After taking the one method from the pros and putting it to the test, it seemed that it did all the analysis for me and made trades as easy as pie as I watched to profits come in!

For the most part forex analysis is underrated. It is a major important thing for a trader to know what to analyze and how it can change the market conditions. This is something a new trader that is starting out can substantially benefit from. If analyzing the market has got you in a cornet, you need to find out about this one method that I discovered from the big traders. It has made market prediction and execution of successful trades a regular.

My forex analysis used to only be a small part of my trading time, it wasn’t long until I realized that I need to spend most of my time analyzing the market. The chances of your trade being successful depends on how well researched it is before you make the trade. Once I incorporated this one method into my forex trading it made my market analysis a piece of cake. I no longer have to spend time checking out the market, as this one method does all the work for me!

Is your forex analysis got you caught up from making real profits? Stop wasting time trying to analyze the market and discover the one method that I swear by. This method has turned the guessing game of the market into a predictable dominating plan to succeed. In the first month of using this method I yielded the highest profits ever! I doubled my trading account and there was no looking back!

If your trades aren’t raking the cash you want, you need to check out the “Big Wigs” Forex Analysis dominating method. Stop letting the “Big Wigs” feed you bull, take action and find out their untold secrets to Forex Analysis today!

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