Basic forex strategies - page 10

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In this paper, an early warning system for foreign exchange online trading system is presented. The warning functionality helps the trader's attention on specific situation on foreign exchange market.. This model is developed using combination of four technical indicators those are Stochastic Oscillator, Moving Average Convergence Divergence, Relative Strength Index and Ease of Movement, continued by execution of the positions. The system has been tested on EUR/USD and GBP/CHF foreign exchange real data pair in a Meta Trader Expert System. The value variation and combination of parameter gives different performance. Back testing using EUR/USD gives 20 combinations providing positive profit, one combination providing zero profit and 3 combinations providing negative profit. Back testing using GBP/CHF currency pair gives 12 combinations providing positive profit, one combination providing zero profit and 11 combinations providing negative profit.
 
Most technical analysis tools focus traditionally on the simple and exponential moving average technique. This study looks at the performance of an optimized fractal adaptive moving average strategy over different frequency intervals, where the Euro/US Dollar currency pair is analyzed due to the increased correlation between the Euro Index and EUR/USD, and the Dollar Index and EUR/USD over the last year compared to the last 15 years. The optimized strategy is evaluated against a buy-and-hold strategy over the 2000- 2015 period, using annualized returns, annualized risk and Sharpe performance measure. Due to the existence of different number of long and short trades in every trading scenario, this paper proposes the use of a new measure called the Sharpe/Total trades ratio which takes into account the number of trades when evaluating the different trading strategies. Findings strongly support the use of the adaptive fractal moving average model over the naïve buy-and-hold strategy where the former yielded higher annualized returns, lower annualized risk, a higher Sharpe value, although it was subject to more trades than the buy-and-hold strategy. The best market timing strategy occurred when using 131 daily fractal data with a Sharpe/Total trades ratio of 0.31%.
 
The use of technical analysis indicators for trading is widely known and discussed. Quite a large number of indicators and the long time period of their usage provide opportunities for creating profitable and successful trading strategies. On the other side technical analysis indicators were constructed for the stock market and therefore to traders on the Forex market it places the question. Can be a strategy based purely on technical analysis indicators profitable on the market with high volatility? Do we use the old, proven indicators, or use the newer ones? Will indicators generate good trading entries in time of crisis? The paper tries to find answers to some of these questions. On the basis of Moving Average Convergence Divergence (MACD) indicator, the trading strategies have been developed and back-tested at the Forex market with different timeframes. An important element of the research is to distinguish the time period of the crisis and beyond the crisis period and tested success of created strategies at the major, most traded currency pair. At the end of the paper the performance and profitability of the created strategies are discussed.

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The question whether the tools and methods characterizing technical analysis can lead to superior performances when it comes to forecast the future evolution of speculative prices (mainly stock prices) represents a matter of permanent debate in the specialized literature. Various surveys show long term equilibrium between the number of empirical studies that confirm these superior capacities and those failing to do so. In the same time, it is suggested that a possible explanation for these heterogeneity resides in the various methodological approaches when testing technical analysis rules. It seems that the subjective choices of the parameters can bias substantially any empirical results through the negative effects of data mining. The paper's objective is to test the sensitivity of the returns generated through the use of the dual moving average crossover rule with respect to the dimension of the investment decision space and the moment in which the investors do the actual trading suggested by the rule. Based on a price of 2,942 observations characterizing the Bucharest Stock Exchange, we ran simulations for 5,670 different trading rules and we found that particular approaches of the trading rule consistently leads to different results, approaches which are more or less prone to boost the rule's profitability. For example, using a two element space of investment decision will always outperform a three element one mainly because of the heavy trading commission fees generated by more frequently changing the investment exposures. We also considered the impact of the trading commissions when evaluating the total returns and that of the net interest that can be earned through borrowing and lending at a differentiated cash rate (namely ROBOR-3M and ROBID-3M).

 
We investigate the role of asymmetric information in affecting order submission strategies. Order aggressiveness depends on the state of the order book and on the asset dynamics. We find that the most important determinants are the depth on the same side of the book and a momentum indicator. When we focus on specific situations characterized by higher probability of information-based trading, we find that orders are less aggressive, suggesting strategic behavior of informed traders. This conjecture is supported by a different response to changes in the investor's information set and by a stronger price impact of less aggressive orders.
 
A comprehensive guide to Forex trading for individual investors Countless money-making opportunities abound in the Foreign Exchange (Forex) market every day, but how does an amateur investor take advantage of these opportunities to earn high returns? This book by CNBC-featured Forex Expert Mario Singh provides a comprehensive solution to this question. Following the first section that explains in plain English-what is Forex trading, how money is made in the Forex "game," the six major players involved, and the importance of knowing one's Trader Profile-the second section focuses on specific and practical guidance which includes: A "Trader Profile Test" to help the reader get a clear picture of his natural trading style and which of five trading profiles he belongs to (Scalper, Day Trader, Swing Trader, Position Trader or Mechanical Trader) 17 proven trading strategies (between 2 to 5 strategies for each trader profile) for the reader to immediately start cashing in on the Forex market Descriptions of an array of real-world trading scenarios, with tips on how to address them A section that shows the reader how to custom-tailor a trading system designed for his sensibilities and risk tolerance Forex hedging strategies for finance professionals at multinational corporations Short on theory and long on practical insights and step-by-step guidance, 17 Proven Currency Trading Strategies-How To Profit in the Forex Market will help anyone-from beginners to professionals, and everyone in between-to master the Forex market and be consistently profitable. © 2013 by John Wiley & Sons Singapore Pte. Ltd. All rights reserved.

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seekers_:

Nice study

After setting levels of S/L and T/P orders the tested strategy has, at H1 timeframe, avoided significant drops in trading balance and the balance ended with the total profit of 26.665 points.
 
Combining two classic indicators, the commodity channel index (CCI) and Bollinger bands, can be a potent timing tool for options trading. STOCKS & COMMODITIES contributor D.W. Davies was inspired by John Bollinger's article "Bollinger Bands" from the 1993 S&C Bonus Issue to develop a way of using the CCI to confirm Bollinger bands' trading opportunities. His technique uses a new variation of the CCI, the dual CCI. Here's how to put the technique to work. To trade options successfully, traders need to consistently and correctly predict three elements of the underlying asset: price, price direction and the amount of time it will take for price to arrive at the expected price changes. Bollinger bands are lines plotted around price to form a trading band or range. The bands are used to identify trading opportunities where market prices are relatively overvalued or undervalued. Rather than providing absolute buy and sell signals, Bollinger bands tell the trader whether prices are high or low on a relative basis. The concept of channels or trading bands is well recognized as an aid in determining the probable range of prices. The centered channel analysis (CCA) technique tries to define cycles and predict price by drawing price bands around centered moving averages of price and measuring the amplitude of price cycles within the price channel. The disadvantage of centered channel analysis is that it requires the trader to visualize or project the channels into the future, which introduces an element of subjectivity. Because of this subjectivity, the CCA is not ideally suited for technical analysis.
 

Rolling spot forex is a growing business. The key problem is whether it could be classified as a financial instrument or could be classified as gambling contract. Each legal system has different approach. Nevertheless the legal position of rolling spot forex is unclear. This submission is divided in three parts. First part gives the explanation of forex trading. It shows what is understood under this term. Second part deals with the types of forex trading. This part gives also a brief explanation of each type of forex trading ant main type characteristics. Third part is main part. It deals with the problem of internet forex trading (which is spread around the world) .This part analyzes types of trading platforms. It shows who could be the counterparty in retail forex trade. It tries to find out what rolling spot forex trading means. Key question is, if rolling spot forex contracts fall under MiFID system. And finally deals with the problem of (il)legality of such trading.


 
In this paper, an early warning system for foreign exchange online trading system is presented. The warning functionality helps the trader's attention on specific situation on foreign exchange market.. This model is developed using combination of four technical indicators those are Stochastic Oscillator, Moving Average Convergence Divergence, Relative Strength Index and Ease of Movement, continued by execution of the positions. The system has been tested on EUR/USD and GBP/CHF foreign exchange real data pair in a Meta Trader Expert System. The value variation and combination of parameter gives different performance. Back testing using EUR/USD gives 20 combinations providing positive profit, one combination providing zero profit and 3 combinations providing negative profit. Back testing using GBP/CHF currency pair gives 12 combinations providing positive profit, one combination providing zero profit and 11 combinations providing negative profit.
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