ALGORITHMIC TRADING GUEST BLOG - forex trading technical analysis book

ALGORITHMIC TRADING GUEST BLOG ~ forex trading technical analysis book

What is algorithmic trading?

Trading with an algorithm is where traders take their trading strategy and put it into code, allowing a computer to execute that code 24 hours a day while the market is open. By default, trading manually is restricted to waking hours (often aided by the use of Red Bull, in my case), and is limited to the number of charts and currencies the trader can watch.

Naturally, the amount a single person can watch, monitor and trade is quite finite. But by utilizing an algorithm traders can have computers do in microseconds what would take humans hours to manually, thereby opening up a new supply of trading opportunities (not all of them being good opportunities, mind you).

Meta4 trading platform allows traders to create their own automated forex trading programs in what is called an “Expert Advisor.” The use of the software is free for all traders - demo and live.

The rise of the algorithm

According to my research, in 2004 a whopping 98% of trading in the foreign exchange market (or forex for short) was manual trading; but by 2010 only 55% of trading volume came from a human. The forex market is a fast moving market that is open 24 hours a day, and I think this huge influx in algorithmic trading is traders trying to capitalize on these factors.

Some exchanges here in the States have tried to embrace algorithmic trading, but have met resistance. My research concluded that forex has been more friendly to algorithms simply because the market has no central exchange to regulate where a trade comes from.

The Pros and Cons

One of the benefits of algorithmic trading in any market is the increase of liquidity. Algorithmic trading typically places more trades than a human naturally would, which opens up more liquidity for everyone: human and machine alike. But with this comes a change in volatility. An increase in volume naturally leads to increased volatility. But some suggest algorithmic trading might actually lower market volatility as algorithms aim for optimal execution at minimum cost.

What’s on the horizon?

One very important lesson from my college years is this: the more we learn, the more we learn we don’t know. My research into algorithmic trading has answered some questions, but seems to have opened up even more. For instance, what is the future of algorithmic trading, and how will it impact my trading? I’m currently researching this topic, and plan on releasing another infographic soon with my findings. Stay tuned: more good stuff is on the way!

For more information on Algorithmic trading, Here is a programming link: http://www.ibfx.com/Education/Programming, or You may contact Adam at <adam.evans@interbankfx.com>
More info for ALGORITHMIC TRADING GUEST BLOG ~ forex trading technical analysis book:

Read more

Divergence in Apple - books on forex trading in india

Divergence in Apple ~ books on forex trading in india

Is a divergence building in Apple?


See the latest video post on Apple and what apple is up to:




This is for those of my friend who have other interest than Forex. This is in no way a solicitation to buy any product, it is posted for your information only!
More info for Divergence in Apple ~ books on forex trading in india:

Read more

Discipline - books on forex trading for beginners pdf

Discipline ~ books on forex trading for beginners pdf

What makes forex trading so hard????????? Is it Fibonacci, MACD, Elliott Wave, EMAs, Stochastic, or a host of other indicators???????

No, if it is not that, what is it? As traders we watch every webinar, read every available trading book, go to every seminar and attend expensive classes. We know all of the rules, so why is it that so many of us fail as traders?

I think the number one reason we fail as traders is lack of discipline.

If you are like me; you want price to hurry up and get there, so you can put in your trade.....Sound familiar?????

The market is always slower or faster than you want. Sometimes you wait for hours for the right set-up, get a phone call or go make a sandwich and by the time you get back to your screen your big move is all over. Then you know you will have to wait for a while before the next good set-up comes along.



I remember one day, Id waited about two hours for price to hit the mornings resistance and I got distracted somehow. When I got back to the computer, I had missed my much anticipated scalping opportunity. You may as well have put me in a straight jacket. I was so angry I could have chewed nails. I was to upset to trade the rest of the day, so I was out.

As a person who was born Type A, I still struggle with waiting, so I had to make some changes in my overall approach to my trading and I want to share somethings that I hope will help you.

#1. Write it down. Always come to your platform with a written plan. You are a business professional in a very competitive market, so it behooves you to have a game plan. Your completion is ready. This is not flag football; it is full frontal tackle. Suit up and be ready to play!

#2. Follow your game plan!!!!!!! It helps to tame some of those nail biting emotions that you are likely to encounter when the market begin to fluctuate.

#3. Stay out of the market, unless you have identified a clear trend. SOMETIMES THERE IS NO TRADE!!!!!!!!!!!!!!!



This one is connected to the same thought as in #2, but it is important enough for a line of its own: RETRACEMENTS WILL GIVE YOU THE ILLUSION THAT YOU HAVE MISSED OUT, OR THAT YOU ARE ON THE WRONG SIDE OF THE TRADE. Having a clear game plan will help you not to panic so when you see price hiccups and retraces. Every price hiccup is not a loss. Remember that price never moves straight up or down. It bounces all day long, that is why you have to identify the major trend. You can read more about that at my blog:
http://tradersbud.blogspot.com/2009/09/trend-lines.html.

#4. Dont try to trade distracted! Come to your platform with a clear head, if you do not, you will leave with your butt thoroughly handed to you.

Here a a few tidbits that I hope will help even further.

Identify the longer term trend, and then use a shorter time frame for a good entry in the direction of the trend. This may take some time, but in order to enjoy success as a trader, it is essential that you learn to wait. You dont have to sit in front of your screen all day, but you do have to wait for a good set up. If you trade longer term charts four hours or more, this is easier, because you can come and go checking the chart at intervals.

Find your support and resistance levels. Many times I just used my high and low from the previous day, or week or month depending on my trading and profit objective. You may want to use pivot points, and you should be able to get those from your broker on your trading platform.

You want to buy around your previous support level, with a proper confirmation, and sell around your previous resistance level with a proper confirmation. If you dont get a confirmation, DO NOT BUY/SELL!!!! You want to trade when the odds are mostly in your favor!!!!!!!!!!

Know your reversal signals!!!! Know your reversal signals!!! Know your reversal signals!!!!

If you use an MA it often time will confirm a change of a trend. This tool confirms best in a trending market

After a loss take a break. Revenge trading often kills new traders. If you take a loss, especially a big one, your confidence has been shaken. Step away, CLEAR YOUR HEAD, review your game plan, refine it if you need to. After you have worked through your emotions, come back fresh and ready to trade. The emotional train-wreck of a big loss, compromises you and you can not see things as clearly or objectively.

Stay out of consolidation/deliberation (when price is in a tight trading range) on a short term time frame. There is a time for the market to rest, you need to rest with it. You are not a fortune teller, you are a trader, allow the market to show you which direction it is going to move in.

Oh this is a biggie. LETTING YOUR WINNING TRADES RUN AND CUTTING YOUR LOSSES SHORT. If you have had trades that started out as winners and ended up as losers , it can chips away at your confidence, often causing you to close your winning trades as soon as they come into profit. On the other hand you will allow your losing trades to run wild, hoping, waiting and praying for a reversal, instead of cutting the legs off of that diseased monster.

Staying in losing trades for extended periods of time cost you not only potential capital, but it also keeps you from entering other profitable trades.

A properly placed SL (stop loss) is your Friend and will help you save your capital. There are traders who trade without SLs. I would advise you to use SLs on your practice accounts often so that you get comfortable with them. There will be times that you will miss it, there is no need to punish yourself by going broke. You missed it, suck it up and move on.

If you were a trader who once lost money to the market, you can change to become an informed profitable trader. You are no longer that scared trader who was always losing and it is time to develop and approach the market with a whole new confidence!

If your confidence has been shaken, use your practice account a lot. Look for trade set-ups on the short and long side of the trade and rebuild your confidence. When you start trading your live account again, then start off small with smaller margins.

Lastly, LEARN TO WAIT FOR PROPER SET-UPS AND NEVER STOP LEARNING!!!!!!! Patience and knowledge will be your best friends in the market!!!!

Happy trading My Friends!!



Get 10 Trading Lessons FREE Click Here

Forex Aussie Analysis See Video NOW

This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.


Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you need for living expenses and cannot afford to lose.
More info for Discipline ~ books on forex trading for beginners pdf:

Read more

FOREX AND DISCIPLINE - forex trading fundamental analysis book

FOREX AND DISCIPLINE ~ forex trading fundamental analysis book

Besides skill, there is really only one thing that separated the pro from the amateur in forex and that is DISCIPLINE!

The DISCIPLINE to do what You need to do when it needs to be done. In order to succeed in forex, You need a game plan. A set of rules that You must adhere to in order to enjoy any real measure of success. Forex is a master game that isnt hard; it is just tricky and not playing with discipline is a very costly venture. The #1 No-No in forex is holding on to bad trades. It is the thing that will break You faster than anything else.

Let me simplify this for You:

Superior DISCIPLINE = Superior Success and eventually a lavish lifestyle

Great DISCIPLINE = Great Success and eventually a very lucrative lifestyle.

Good DISCIPLINE = Measured Success and a nice/decent living.

Fair DISCIPLINE = Too much frustration and lots of struggling.

No DISCIPLINE = BROKE, busted, frustrated and disgusted

When I first started sharing strategies, I was asked was I afraid that the market might start to change because of my sharing. I know that any master trader can freely share any strategy/secret and the market doesnt have to worry, because most traders dont have the DISCIPLINE make the strategies work for them.

Everyday Traders are lead into traps by Master Tricksters and it happens to the best of Pros too, but the difference is that the Master Pro will spring the trap when Her/His rules say cut, while the amateur will hold on until the market cuts the trade for them. Never let the market cut Your trade, because it will always be at a point much worst than the point that You thought You couldnt afford the loss.

DISCIPLINE is the ultimate advantage for the Pro Trader. It is the secret forex weapon that the Amateur fails to use. Traders are always looking for the holy grail of trading, well the closest thing to the holy grail in trading that I know is discipline. The discipline to enter when Your rules show that You have the advantage and the discipline to exit when Your rules show that You dont have the advantage that You thought that You did.

A trader who follows a good set of rules with discipline will enjoy success and happiness, the trader who makes exception to good rules will be frustrated, full of self pity and BROKE.

REMEMBER THE CHOICE IS ALWAYS YOURS, YOU NEVER HAVE TO STAY IN A BAD TRADE. YOU ALWAYS HAVE THE POWER TO CUT!

YOU CAN BE SUCCESSFUL HERE, BUT ONLY IF YOU CHOSE TO BE!

YOU CAN DO THIS (^_^)!

More info for FOREX AND DISCIPLINE ~ forex trading fundamental analysis book:

Read more