Tuesday, March 31, 2009

Ask and Answer for Beginer forex trader about Timing

Ask : How to calculate the est timings?

Answer : EST = GMT - 5. You should find out your local time zone. To do this either look at your PC time zone, or better go to http://www.timeanddate.com/worldclock/ and in the search field type in the country you live in. Then calculate the correspondent EST hours for your local area. Also the timing tool at: Forex market hours can help at some point.

Ask : I heard that one should not trade on Mondays because it has more down days. But if that is true then it would seem that one should not trade long on Mondays, but trading short (assuming the trend is down) on Mondays would be a good thing. Did I misunderstand whats wrong with Mondays for trading?

Answer : It appears that you have misunderstood the statement. When they say that Mondays have more down days, they mean that on Mondays traders have a higher rate of unsuccessful trading. On Mondays the market is often unstable, deciding on which direction to pull this week, what market levels to obey and what to disregard. Unless there is a crystal clear trend imprinted in the price, traders try to avoid trading on Mondays to lower the percentage of losing trades.

Ask : I live in UK, what time on monday or sunday would I use for the start of the week for trading. Also once the week has began what is the daily time for my calculation.

Answer : Use GMT - your local time zone. Start trading on Monday, around 6-7am GMT if the trend is obvious and trading signals are clear, otherwise it is suggested to wait till Monday shake-up occurs in the market as it looks for its trend options. If you want to calculate Pivot points, New York time (EST) is recommended. EST = GMT - 5. Also majority of breakout methods are tailored to EST time. In all other cases you can confidently take GMT time - and base your calculations around 00:01am - 11:59pm GMT.

Ask : What is M15 timeframe?

Answer : M15 stands for 15 minute time frame.
Other examples:
4h - 4 hour time frame, or you can also say - 4 hour chart.
1d - daily time frame, 1 day chart.
5m - 5 minute chart.

Ask : Im abit confused about the openning time for london forex market. Is it at 5:00am or 8:00am ? And how about the timing of the platform of those Meta4 trader, are they GMT ? Are they all auto adjusted to day light saving ? ( what is the duration of day light saving ).

Answer : London market opens at 8am GMT. Different Forex brokers have different default timing settings for the Metatrader Platform offered. Those settings cannot be changed. You should ask your broker what timing their trading platform uses. All platforms are auto adjusted to daylight savings. Here is additional information on the calendar and duration of daylight saving periods in the world. http://www.timeanddate.com/worldclock/city.html?n=136

Ask : If I traded before daylight savings time fall 2007 and up to end of feb 2008 at 5:00 pm mountain time, which is 0:00 GMT time. Would I still trade the same time or do I need to adjust my strategy back 1 hour as we moved our clocks forward 1 hour? I noticed today that 0:00 is now at 6pm mountain time?

Answer : Yes, as we switch to daylight saving time and back you adjust your strategy time accordingly.

Ask : Please i need your help about the timing because am in Nigeria and we are an hour ahead of GMT (GMT+1). Kindly help with the best time for me to calculate my pivots for both London and America market on 15 minutes chart.

Answer : Ok, let's use the time from 00:00 Eastern time to 00:00 next day Eastern time to calculate Pivot points. Let's not just do it one time, but learn how to do it each time when we require to perform similar time matching tasks.

1. Go to http://www.forexmarkethours.com/
2. Choose your local time zone in the window application. Press "Go!". Note the time in the green box next to it.
3. Now choose "GMT - 5 Eastern Time (USD, Canada)" in the same application. Press "Go!". Note the time in the green box again.
4. Find the difference in hours.

Using the rules above, for you time zone currently we have 5 hours difference (its daylight saving time in US). Therefore, since we want to Calculate pivots from 00:00 to 00:00 EST, in your local Nigeria time it will be from 5:00 am to 5:00 am EST. Same way we find the difference for London hours. Because of daylight savings your Local time now is the same as in London. No additional calculations required.

Ask : hello, am very new to in forex trading and will want to get myself fortified before activating my live act. the issue now is I will to know how daylight savings affect different forex market opening hours thank you

Answer : During the 2 weeks period when daylight savings is activated in different countries across the globe, it does confuses traders as to what hours to use. We suggest monitoring the time with Eastern Time time zone (New York time). Some traders may find useful switching their PC local time to Eastern Time to monitor hours effectively. Also http://www.forexmarkethours.com/ will always tell you what markets are currently open regarding your local time zone and according to daylight savings adjustments.

Friday, March 27, 2009

Beginners Forex Trader - What is drawdown?

A DRAWDOWN is a percentage of an account which could be lost in the case when there is a streak of losing trades. It is a measure of the largest loss that a trader's account can expect to have at any given moment or period of time. Streak of losing trades or a LOSING STREAK - a period of consecutive losses with no profitable trades.)

You'll see the term "drawdown" being used when describing a trading system. Before trusting any particular system, a trader wants to know what is the largest loss he can face when he starts taking losses due to changes on the market that would lead to a temporary worsening of a performance of a trading system. For example, if a trader put $5000 to trade with and later he has lost $2500. This would be 50% drawdown.

Another example: you may hear that a trading system is 80% profitable, (which would logically mean that the remaining 20% of the time will produce losses). What a trader cannot predict is in what sequence the profits and losses will come... Will it be 8 consecutive profitable and 2 losing trades every time? Will it be 10 consecutive losing trades and then 3 profitable, and then 5 losing and then 15 profitable? It is impossible to tell in advance. However, by testing a system, a trader can look back ad find the largest period of losing trades - the largest losing streak - this is what would be called a MAXIMUM DRAWDOWN for a particular system, and this is what a trader should be prepared to.

Tuesday, March 24, 2009

Forex Trading Tips and Info for Beginners

Beginners can make money trading forex or currency cross rates. There is no special secret that expert traders used or insider information that a beginner forex trader needs in order to profit consistently. Believe it or not, the strategies used by many so called expert traders are actually simple basic forex trading strategies that are available from your community libraries or online forums. You can become a consistent trader by following a basic trading system and manage your trade using an optimal risk/reward ratio. It is that simple. Sorry to disappoint but there is no $3000 program to sign up or $97 ebook to buy.

The Holy Grail of Trading Systems. Many of us started out learning to trade by searching for a trading system that will yield perfect results. We are always looking for the holy grail and when we get frustrated with the not so perfect results of each trading system, we start the vicious cycle of testing another system. There is no perfect trading system and almost every system can be profitable with the correct simple risk management techniques.

The trading system that you choose to use must be suitable to your trading personality. If you oriented to short term results and gains, a scalping or day trading strategy would be suitable. Whereas if you are into the long haul and like to see bigger gains and can handle overnight risks, swing trading or long term trading would be your choice.

After deciding on a trading timeframe, you will have to decide on how you approach the markets. There are many traders who tend to trade the market based on a discretionary approach with news and fundamental analysis, while others tend to trade the markets based on technical indicators. For myself, I am more of a technical trader in the short term timeframe. I may enter and manage trades for a couple of minutes to even a couple of days, but I have seldom run trades for over 2 weeks.

Managing Risks While Trading Forex Markets. How do you manage risk in forex trading? The first principle in minimizing risks while trading forex is to assume that the trading system that you are using is not a predictor of the future direction of the market. For that matter, no trading systems or trading indicators can predict the direction of the currency markets. Sellers of black box trading systems and trading newsletters may differ but when you stop trying to predict the markets, you will start to actually trade the markets.

When trading the forex markets, you can manage risks in each individual trade and your entire trading system by using an optimal risk/reward ratio. The concept of an optimal risk/reward ratio is easy to understand. Basically for every trade that you take, you should be targeting a pre-determined amount of gain with a stop-loss limit that is suitably lower. A good risk/reward ratio is to seek a reward/return that is 2 to 3 times more than the potential risk/loss. Why not set it at 10 times the return to loss? Does this mean that if we set the target profits to be a high multiple of the potential risk, the trading system will become a profitable system? That would be ideal but we need to also take into consideration the winning probability of the trading system before we can decide on the optimal risk/reward ratio and whether we should employ each particular trading system. Perhaps an example would help to explain clearer:

Take for example, a dual moving averages cross-over system that yields a winning probability of 55% i.e. out of every 20 trades, 11 are winning trades while the rest of the 9 trades are either breakeven or losses. In this case, we will assume the 9 trades are losing trades. Using a risk/reward ratio of 2:1 would result in an expected profitability = 0.55*2 – 0.45 = $0.65. This suggests that over a long period, the trading system will yield a profit of $0.65 for every dollar invested. Definitely a winner here! But note that there is a inverse relationship between the risk/reward ratio and the winning probability, which I will explain in a subsequent post.

There you have it. Successful Forex trading can be possible for even beginners. Selecting a trading system that is suitable for your lifestyle and putting in proper risk management, forex trading can be extremely profitable. Of course, there are many advanced techniques you should learn but as a beginner, you should approach forex trading or currency trading with a winning mindset as the risks involved in forex trading are not insurmountable and can be overcome by simply following a set system. Good Trading!

Source : riskytrader.com

Thursday, March 19, 2009

MultiCharts - Forex Automated Trading Software Review

The Power of Flexibility! Technical Analysis, Charting, and Trading Software for Stocks, Futures, and Options Markets MultiCharts is a professional technical analysis and automated strategy trading platform for futures, forex, and stock trading, featuring professional charting, advanced analytics, trading strategy optimization, and backtesting.

Multiple data series, of different timeframes and symbols, and from different data feeds, can be plotted in the same chart window. Time-based and Count-based, as well as Bid, Ask, or Trade-based data series can be mixed within the same chart. MultiCharts is compatible with the industry-standard TradeStation EasyLanguage and the vast existing library of EasyLanguage studies that can easily be customized into your own trading system. And automated trade execution lets you apply the power of an algorithmic trading system directly to online stock trading.

Sunday, March 15, 2009

MCFX - Great Forex Automated Trading Software

The Power of Simplicity!Charting, Technical Analysis, and Automated Trading Software for Forex Trading MCFX is specifically designed for Forex strategy trading. We believe that such an efficient combination of the unparalleled simplicity of use with the advanced technical analysis and strategy trading features has never been as affordable with traditional Forex trading software.

Whether you are a seasoned Forex trader or just starting with the currency trading, MCFX propels you to become a more confident trader with the full array of powerful features:
user-friendly Forex charts with high-end capabilities, full seven years of historical data for the 24 key currency pairs, in a range of resolutions, thousands of ready indicators as well as support for writing your own trading system, and Forex trading strategy optimization and back-testing.

High performance and reliability consistently bring MCFX to the top of the Forex trading software.

Thursday, March 12, 2009

Forex Strategy Builder -

Forex Strategy Builder is a visual forex strategy back tester. It uses combinations of technical indicators and logic rules to simulate a trading process employing historical forex rates. An included automatic strategy generator enables you to compose a profitable strategy. An optimizer, an intraday scanner, a bar explorer and an interpolation methods comparator are included to guarantee the maximum quality of your forex strategy development.

Forex Strategy Builder screenshot

Forex Strategy Builder is to provide a reliable free tool for testing trading strategies based on actual historical data. In doing so we want to incorporate the most common methods of technical analysis and great variety of technical indicators in just one user friendly program. In the last few years we've extended the list of indicators to almost 100 and we are working on the possibility of enabling the users to test their trading strategies on the stock market as well as on the forex market.

The reason we have been developing so rapidly is that we receive constant feedback from the Forex Strategy Builder users whose suggestions have been used to direct all future development of the software.

It is possible a trading system to show excellent results in the historical test and after that to lead to a catastrophic outcome. Some reasons could be faulty back test, over-optimization or tricky indicators. Forex Strategy Builder can help you in this situation. It easily recognizes the pitfalls of testing trading systems. It notices all ambiguous bars in the back test. The program can find the average balance line between all possible market scenarios. It also has techniques for recognizing the curve fitting.

It is advantageous that Forex Strategy Builder is being continually updated and you can partake in its shaping in the way you prefer. So, feel free to share with us the things you believe can be improved. Be certain that we will follow your recommendations in the next versions. This program aims at making the process of creating profitable strategies, based on technical analysis, an easier task.

While you are not on the real market, do not hesitate to test all strategies or combinations of technical indicators you can think of. You will gain more experience and understanding of how the different logic rules and parameters influence the foreign exchange trading.

This program is absolutely free. It is not necessary to pay money or to make any registration. You can start testing your trading system with historical market data right now. Step into the world of Forex Strategy Builder. It is 100% Free forex software.
Visit our forex download page. You can find installation hints, download links, system requirements and other useful information there.

Sunday, March 1, 2009

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