Forex Manual Blog

cyruswendydevo asked:


… si i am pretty familiar with many of the terms and concepts, but now, I would like to follow/ get first-hand, real-time guidance from somebody who is currently doing, and is successful at it.

THANKS!!!

BRISBANE

melgonz@sbcglobal.net asked:


Could someone recommend a good book to me on carry trades in forex? Thank you for your consideration.

FICKLIN

Kelly Price asked:


Of course you can buy a forex robot from the net but most of them won’t make you money as they have never been traded and have paper track records or you can have one which is FREE works, will continue to work and has made huge gains.

Before we start most forex robots don’t work because they are designed in hindsight and the vendor bends the rules to fit the data he is testing as no two portions of data ever replicate themselves exactly, the system fails.

This is known as “curve fitting”, or bending the rules to fit the data.

One trader I know, likened this to shooting at barn door and then drawing a chalk circle around each and every shot, to make it look like a bulls-eye afterwards.

Here’s the disclaimer you see on just about every robot sold:

“CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.

Now people get put off automatic forex trading systems and think they just don’t work but they do and the one that we are going to outline has been used as the basis for forex trading strategies for some of the top traders in the world.

Before we outline it, be aware it cannot be “curve fitted” why? Because its only one rule and you cant curve fit that by definition!

The system was originally devised by legendary trader Richard Donchian to trade commodities and takes advantage of the 4 week cycle that prevails in most markets. Here is the rule:

It’s simple - buy a 4 week calendar high and reverse and sell a 4 week low - that’s it.

To simple to make money? Not as all…

Try it and you will see it makes money and is basically a long term breakout trend following system which will put you on the right side of every major move.

The only downside is when the market doesn’t trend it can get chopped but you can cut drawdown by exiting on a shorter time frame ( try 1 and 2 weeks) and then re-entering on the 4 week rule.

This system has been used by trading legends such as Richard Dennis and if it’s good enough for him well its good enough for you and me.

A word of warning this system works and will continue to work but it requires discipline - its long term and its not fussy about market timing and there is no manual input but stick with it over the longer term and you will be well rewarded and NEVER miss a big trend again.

Most traders won’t use it though after all it’s not as trendy as Fibonacci, a neural network or system based on chaos theory yet, it will beat 90% of other systems hands down.

If you are interested in making money from a forex robot and you want one that’s stood the test of time then you should use the 4 Week Rule

All the best forex trading systems are simple and you can’t get much simpler than this one but don’t assume because its simple it doesn’t make money - it does. Try it for yourself and see.



TIBBITTS

Stephen Todd asked:


How to Make BIG Profits with Currency Trading Systems

FOREX markets turn over trillions of dollars per day and are the world’s biggest investment medium.

In recent years, FOREX trading systems using technical analysis to predict trend changes have become increasingly popular as a way of catching the big profitable trends.

Catching the Longer Term Trends for Big Profits

The longer-term trends in FOREX markets mirror the underlying health of the economy. As periods of expansion and contraction take years, so do currency trends and a good FOREX trading system can help you lock into, and profit from, these trends.

When picking a currency to trade, it is important to have good long-term trends and liquidity.

Good major currencies to trade include the US Dollar, Swiss Franc, Euro, Japanese Yen, British Pound, and Canadian Dollar.

FOREX trading systems remove the emotional component from trading, which is the major reason the majority of traders lose.

Removing the Emotion from Trading with Systems

One of the best starting points on the effect that emotions have in trading, are the works of legendary trader W. D Gann, whose works on the subject are essential reading.

Other authors worth reading are: Edwin Lefeurve, Jake Bernstein, Larry Williams, Ken Roberts, Van Tharpe and Jack Shwager whose book “Market Wizards & The New Market Wizards” interviews some of the top traders of all time, including the legendary “turtles”.

FOREX Trading Systems for Profit

The developments in computer software, and the growth of the Internet, have seen system trading reach a wider audience than ever before.

Packages such as Tradestation, Supercharts and Omni trader, allow traders to build and back test systems, using technical indicators such as stochastics, Bollinger bands, moving averages, RSI etc., to realistically see how the system would have performed in the markets over time.

Traders who do not have the time, or inclination, to develop their own FOREX Trading systems, can buy a variety of systems off the shelf.

What Makes A Successful FOREX Trading System?

If you are buying a FOREX trading system from a vendor, there are several things to consider:

1. Do you want to be a day trader, or a longer-term trader? You need to pick a system that suits your personality.

2. Do you want to have any manual input into the system, or do you want it to make all the decisions for you?

3. Do you want to trade just one currency, or a spread? Trading one currency can increase the profit potential, but keep in mind that it can also increase the risk.

4. What is the logic of the system? It is a fact, that if you understand the system and its logic, you will have more confidence in it, than if you buy a black box system where the logic concealed.

5. What is the profit potential and what are the drawdowns? The important point here is that any system will have periods of drawdown or losses, and you need to be able to have the confidence to follow the system through good periods and bad. Generally, the bigger the profit potential, the bigger the drawdowns tend to be.

When you are buying from a vendor, check out their experience, record of accomplishment, customer support etc., and make sure you are comfortable with them.



BOLLING

Small_elf2000 asked:


Which book should i read on Basic understanding of stock? I’m totally new in this and totally know nut abt it. so is there any where i can read up? example: Forex, Index, stock and gold etc etc…

NERBY