Forex Books - page 19

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Free FIBONACCI TRADER Journal (15 issues of the journal downloadable from the provided link) : Free 15 issues

 
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Free FIBONACCI TRADER Journal (15 issues of the journal downloadable from the provided link) : Free 15 issues

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In its traditional formulation as an explanatory principle, reflexivity means that any object of thought contains in itself the thinking activity that generates it. Applying the concept of reflexivity to the question of financial markets valuation, Soros concludes that economic reality is actively shaped by the perceptions of market participants. This leads him to a theory of investment radically different from other existing approaches.

Existing approaches try to make sense of market reality by delineating factors that are determinants of price and identifying indicators that can be used to predict the future course of prices. Different theories emphasize different factors, they differ with respect to the definition of factors that determine market events. But the different approaches share the assumption that market events are determined by factors that function like logical units. The unit-like factors function like the discrete terms in a logical calculus, remaining fixed, unchanged through the process of events. What is not covered by such factors is viewed as just indeterminate and unpredictable.

But this traditional explanatory structure, based on deductive logic, cannot capture reflexive processes. The fluidity and particularity that characterizes the unfolding of events do not match the constancy of logico-mathematical patterns. In reflexive processes, we cannot assume discrete entities at the bottom: any factors we isolate might not survive the process of events in their original form.

How George Soros Knows What He Knows : how_george_soros_knows_what_he_knows.pdf

 
Though machine learning has been applied to the foreign exchange market for algorithmic trading for quiet some time now, and neural networks(NN) have been shown to yield positive results, in most modern approaches the NN systems are optimized through traditional methods like the backpropagation algorithm for example, and their input signals are price lists, and lists composed of other technical indicator elements. The aim of this paper is twofold: the presentation and testing of the application of topology and weight evolving artificial neural network (TWEANN) systems to automated currency trading, and to demonstrate the performance when using Forex chart images as input to geometrical regularity aware indirectly encoded neural network systems, enabling them to use the patterns & trends within, when trading. This paper presents the benchmark results of NN based automated currency trading systems evolved using TWEANNs, and compares the performance and generalization capabilities of these direct encoded NNs which use the standard sliding-window based price vector inputs, and the indirect (substrate) encoded NNs which use charts as input. The TWEANN algorithm I will use in this paper to evolve these currency trading agents is the memetic algorithm based TWEANN system called Deus Ex Neural Network (DXNN) platform.

Evolving Chart Pattern Sensitive Neural Network Based Forex Trading Agents : evolving_chart_pattern_sensitive_neural_network_based_forex_trading_agents.pdf

 

Position-sizing Effects on Trader Performance: An experimental analys

Non-academic literature on stock and futures trading emphasizes the importance of “money management”, here defined as "how much of available capital is to be allocated in a specific market position", also called position size. The effect of position size was experimentally studied by letting two groups trade fictitious capital through a series of trades, with only one variable available for manipulation by the participants, that is, how much of available capital to be put at risk in each and every trade. The treatment group had received a three-hour lecture in position sizing, risk management, and psychological biases, whereas the control group did not. The results showed that participants in the treatment group lost all their money to a lesser extent (p < .01) than those in the control group. However, the treatment group did not gain significantly higher profits than the control group. Traders being able to gain money over the long run were taking smaller positions than losing and bankrupt traders were (p < .0001). By receiving a theoretical education, without any practical training, the risk for a trader of going bankrupt when trading simulated stocks was decreased to a tenth.

position_sizing.pdf

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position_sizing.pdf  144 kb
 

Fine tuning your money management system :fine-tuning-your-money-management.pdf

 

Money Management: Controlling Risk and Capturing Profits :

Money management is the process of analyzing trades for risk and potential profits, determining how much risk, if any, is acceptable and managing a trade position (if taken) to control risk and maximize profitability. Many traders pay lip service to money management while spending the bulk of their time and energy trying to find the perfect (read: imaginary) trading system or entry method. But traders ignore money management at their own peril.

money_management_controlling_risk_and_capturing_profits.pdf

 

Money Management and Risk Management

A common goal among many traders is to achieve $1 million in trading profits in their lifetime. It is a dream that most traders do not expect to actualize in less than 20 years (unless they are beginners, who think they can reach $1 million in trading profits in a little over an hour). However, the following numbers are what you need to achieve $1 million in profits with the help of the money management techniques in this book. These numbers are based on a conservative money management approach (as opposed to aggressive).

money_management_and_risk_management.pdf

 
Money management is like beauty — its true quality is in the eye of the beholder. If you asked a cross-section of market participants from new traders to professional fund managers to give their definition of money management, what different answers would you receive? A more telling question would be to ask about the expectation of risk and return plus their plans for future trading as assets grow. When looking at these questions, individual traders and fund managers are as different as night and day. And they should be. Some view hedge fund managers as “being in the big leagues,” reflecting what many traders want to become when they grow up. Of course, not all great traders are fund managers. Consider Larry Williams and Sheldon Knight. Their feats of turning small accounts of less than $50,000 into more than $1 million in less than a year are comparable to Barry Bonds hitting 100 home runs and batting .400 in a single season. Williams did it twice, starting with $10,000 in 1987 and $50,000 in 1997. Knight did it during 1986-87, starting with $50,000.

The truth about money management : the_truth_about_money_management.pdf

 
seekers:
Money Management and Risk Management money_management_and_risk_management.pdf

Interesting reading. Thanks for sharing

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