Forex Manual Blog

Marcus asked:


I have different sources tell me yes and no. I know a lot of new bylaws have been passed to govern the Forex market and the people who trade in it. But for the ordinary person that trades for forex for friends and family do you need to be registered? Are IB and Money Managers the same thing?

CHALIFOUX

melgonz@sbcglobal.net asked:


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

SERIGHT

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

melgonz@sbcglobal.net asked:


I would like to learn how to perform correlated/hedge trades…such as the EUR/USD + USD/CHF. Can anyone recommend some books on the subject? Thanks.

QUEBEDEAUX

melgonz@sbcglobal.net asked:


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

VANZEE

Sean Bailey asked:


 

Those of us who are new to the Forex market probably realize ahead of time that 95% of us will lose our money and the remaining 5% of investors will profit from us. Lucky for us, there is a way to give us an edge over the competition. Automatic forex trading software is designed to is designed to track and predict currency in the forex market. These programs use algorithms and historical data to make predictions and determine trends of what will really happen. Then it can automatically make trades on your behalf.

 

For starters, we will need to download the automated forex trading software platform and then a forex program on our computer. Beginners can be taught through a demo version of such forex robots by observation and visualization of what is going on. Then we can progress to a live account which will do real-time tracking with actual gains and losses. The demo account is simply a simulation. The live account is real-life so make sure you understand the forex market before jumping in with a live account. For best results, begin with a demo account to make sure you have everything set up and customized to your liking. When you are confident with the program and feel comfortable enough to take on real life trading, you can go to a live account. Always remember though, to test the program every time prior to going live.

 

Until you feel comfortable enough with automated forex trading software, you can still trade manually. This will cut down on the time spent in front of a computer screen when you have other business to take care of during the day and at night when it’s time to get some sleep. Automated forex software helps fill the gaps.



CLAASSEN

Kelly Price asked:


Should you buy a forex robot and trust it to lead you to currency trading success or should you learn forex trading yourself and trade manually? Which is more likely to lead you to currency trading success?

Consider this question:

If forex robots make as much as they claim why don’t banks and brokerages sack their fund managers and dealers and use robots?

Think about it - most of the forex trading robots you see claim to make as much, if not more than the best bank dealers, yet only cost a few hundred bucks.

So why don’t the banks and brokerages sack their dealing teams that cost them far more? You could ask yourself as well - why bother working, when you can just sit at home, put your feet up and your robot goes to work for you?

The answer is of course the forex trading robots you see online won’t make you money long term. Why? Well consider this, all the track records you see are made up in hindsight and simulated, there NOT real trading. Here is the typical disclaimer you will see:

“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”.

Think a track record with the above printed on it will make you money? Well try it and see!

These automated trading systems are designed to appeal to the greedy or naive investor and they really should know better - making money in any venture is not easy.

There is one advantage you have over any robot - you are capable of independent thought, no computer can think for itself and your brain is an amazing tool - if you use it correctly.

The rewards with manual trading are huge and you need to work smart and get a set of trading rules, to execute your trading system and have the discipline to follow it.

Forex trading offers huge rewards for the effort you need to put in and anyone can learn to trade - it’s just a question of having the right mindset and right forex education.

Today, we marvel at computers and how they have enriched our lives - but in forex trading the appliance of science is not enough, as markets don’t move to set formula’s, there an odds game. However, if you learn how to trade the odds you can win.

So which is best using a forex robot or manual trading?

You know our view its manual trading although we have seen some robots that can make money (they are either expensive or require tremendous discipline) you can make more if you apply yourself correctly.

Forex trading is a challenge and one you win just keep in mind you can win have confidence in your ability and learn currency trading for long term gains and don’t trust anyone else - especially not a forex trading system with a simulated track record!



VITT

melgonz@sbcglobal.net asked:


Could someone recommend a good book to me on carry trades in forex? Thank you for your consideration.
I was refering to holding a EURO/USD + UDS/CHF. But thanks, that is a new idea.

MILBOURN