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A New Way to See Trading Systems

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Although you probably have already noticed it, the trading systems are evolving and becoming increasingly technical. As you can imagine, some professional traders recommend to make a qualitative leap and try to convince once and for all that the use of trend lines, price chart patterns and obsolete oscillators in the same way that comes in thousands of books it is not exactly the best approach to winning in trading. I know this is a very broad and intense debate and that many people are not quite agree, but I plan to present new ways of seeing trading that might be interesting for some.

That said, we will introduce a new way of looking at trading systems. And for this let us first reformulate their classification. Typically, systems classify roughly in the classical groups of trend followers, countertrend and pattern-based. But today I propose a completely different alternative to any other classification that you may have seen.

Considering how a system is developed, we can establish two groups of trading systems: trading systems based on models and trading systems based on exploitation (mining) of data. We will describe these groups in detail.

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Forex Strategy, the Rob Booker System

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Rob Booker is one of the most respected Forex traders in the world, with a lot of history behind him. The Forex strategy that I am going to present today is the system of Rob Booker, denominated Arizona System.

Rob, as all traders is evolving, and currently does not use this system, he is currently promoting his Trifecta system, but we must not forget that with this system he managed to convert $2500 in $100000, which means that this system is no so bad.

When a trader designs a Forex strategy, he does this to take advantage of a market anomaly, which usually gives us an advantage, and consequently benefits for our trading account.

This is not a usual strategy, I would consider it a trading system which joins several strategies under the same idea: define what is really happening in the market, and consequently, to act.

The market has two basic trends, bullish and bearish. There are also markets without a definite trend, where there is a lateral movement, which can be consolidation, accumulation, or distribution, but there are another times in the market, in which we really have no idea what is happening and there are not many opportunities for the trader. Rob intends to find and define through indicators, at what time we are in the market, and act using a Trading technique, or a different Trading strategy.

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Simple trading methods. Long-term trends following

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Continuing with simplicity in concepts and strategies, we will present some simple trading methods. These are certain methods for long-term trends following.

As a historical note about this type of methods, we can say that they have been there since “the origin of time” and, if they have not disappeared is for something and is that simple and effective trading methods endure in time unlike others, much more Sophisticated and complicated, that stop working and disappear.

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What is the Forex Drawdown?

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Forex Drawdown of a trading system is defined as the distance between the maximum and the minimum in the equity of a period, ie it is the worst streak of losses from the last maximum until it is exceeded by the next maximum. It is very common to speak of the maximum or historical Drawdown that is the worst streak of losses occurred during the entire trading period.

It can also refer to a decrease in the balance of a trading account.

For example, if you have an account with 5000 USD and you lose 1000, your account will have 4000 having suffered a drawdown of 20%. Knowing the drawdown suffered in a trading account is an important part of controlling risk. Traders will normally have a maximum drawdown limit that they are willing to assume in their trading plan.

Let’s look at a small example in the currency pair EUR/USD:

Forex drawdown

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Forex Scalping Strategy Based on two EMA

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Today we will present a strategy that requires mainly time. This is a 1 minute Forex scalping strategy. As its name implies, it is designed to perform quick transactions to achieve a series of small gains, which in the end add up and accumulate a big profit.

This technique is ideal for Forex beginners because of its simplicity. Read on to learn how to implement it.

What is Scalping?

Before explaining the strategy, it is worth remembering the concept of “scalping” in Forex trading. Scalping refers to a trading style in which many trades are made in a very short period of time. The goal of this style is to get a few pips of profit and get out of the market quickly.

Due to the short duration of its trades, scalping is a style that develops at a dizzying speed. However, for the same reason, it does not use many indicators or fundamental analysis, which makes it perfect for beginners. In scalping strategies traders usually perform hundreds of trades per day, making it a time-consuming style.

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GKFX – Forex and CFD Broker

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GKFX Review – Forex broker regulated by FCA

GKFX is a regulated Forex and CFD broker from United Kingdom which offers access to many markets, besides Forex, through Contracts For Difference. It was founded in 2009. This broker offer several services to its clients, including a web based trading platform, platforms for mobile devices, regular promotions and more.

GKFX is a Market Maker broker, which means that it offers fixed spreads regardless of market conditions, and can sometimes act as the counterpart of its clients during their trades. However, it also offers a trading account with similar trading conditions to those that characterize STP brokers with variable and extremely low spreads. Because it is a Market Maker, it does not charge commissions directly for the transactions of its clients, obtaining its profits through the spread that charges in the prices.

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CFD Risk Management – How to properly manage the risk in CFD?

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CFD risk management

Risk management in trading or investing is perhaps one of the most important factors in determining the success or failure of a trader, although it is undoubtedly one of the most neglected factors. As Warren Buffett, president of Berkshire Hathaway and possibly the best investor in history, says, “Rule number 1 is never losing money and second, never forget rule number one”. If one of the richest people in the world says this, we must be aware of the importance of proper and systematic risk management in investments. Not in vain, a few wrong or poorly executed market trades can put an end to all or part of our trading account.

Managing risk is not something for which there are exact and simple rules, since it is something totally variable depending on the type of investor we are. In this way, a trader who prefers intraday trading will not assume the same risk in each transaction as a “value investor” whose time horizon is months or years. In the case of the latter they are able to withstand large temporary losses (in some cases higher than 50%) as well as averaging down, aspects that a professional trader can not and should not afford at any time. 

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How to trade false breakouts in the markets?

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Trade false breakouts in a simple way

The trading techniques based on breakouts are very popular because they are quite profitable and can be used to trade in any market.  Many traders know the fact that after the price get caught into an area of consolidation a breakout usually occurs by which the price make a violent and extensive movement outside the area where it was consolidated.

These movements could be so strong that a trader can obtain high profits if enters the market in the right direction. However, the problem is that in many cases the traders who jump when there is what appears is a breakout realize the fact that the price returns to the area of consolidation and ends losing money. This is known as a fakeout or false breakout.

In fact, the fakeouts are so common that many investors trade and make money with strategies based on false breakouts. Therefore, in this article we will show the basic way to trade false breakouts.

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World Wide Markets – Forex Broker

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WWM-Forex Broker Review

World Wide Markets or WWM is a regulated Forex broker founded in 2011 from which also specializes in CFD trading and commodities trading with assets like gold and silver. It is a broker which offers direct market access and many financial assets to trade in the market.
 
WWM is a Non Dealing Desk broker, which means that it does not act as the counterpart of its clients in their trades and does not intervene directly in these transactions. In this way there are no conflicts of interest between the company and the trader since World Wide Markets acts simply as an intermediary between the customer and the market.

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