Something Interesting in Financial Video July 2015 - page 2

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Forum on trading, automated trading systems and testing trading strategies

Something Interesting in Financial Video May 2014

Sergey Golubev, 2014.05.12 08:54

Ichimoku Kinko Hyo Trading System

A brief look at the terminology, signals and methods for taking trades using Ichimoku Kinko Hyo.

More video on this subject:

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Ichimoku threads/posts on mql5.com forum

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Ichimoku indicator description

  1. Tenkan Sen - moving average of the highest high and lowest low over the last 9 trading days. (Highest high + Lowest low) / 2 over the last 9 trading days
  2. Kijun Sen - moving average of the highest high and lowest low over the last 26 trading days. (Highest high + Lowest low) / 2 over the last 26 trading days.
  3. Senkou Span A - the average of the Tenkan Sen and Kijun Sen, plotted 26 days ahead. (Tenkan Sen + Kijun Sen) / 2 plotted 26 days ahead
  4. Senkou Span B - the average of the highest high and lowest low over the last 52 days, plotted 26 days ahead. (Highest high + Lowest low) / 2 over the last 52 trading days plotted 26 days ahead.
  5. Chikou Span - the closing price plotted 26 days behind.

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How to Tell if Your Broker is Trading Against You
  1. In this video, we're focusing on forex and CFD brokers; this discussion does not apply to stocks and futures brokers.
  2. The simple truth is that most forex and CFD brokers are trading against their clients. The details in how this is accomplished vary greatly from broker to broker. Broadly speaking, we can say there are two types of brokers: A Book brokers and B Book brokers.
  3. A Book brokers may technically be trading against their clients in that they are taking the opposite side of the trade, but they generally are taking a risk neutral approach to the market and are looking to immediately offset the trade. So they are not trading against their client in spirit, only in technicality.
  4. B Book brokers will choose what positions of their clients they wish to offset. As such, they are willing to take a directional position in the market, and thus may be trading against their clients in a more material way. For instance, suppose the B Book broker wants to take a long Euro position in the market. To do this, they may not offset the short Euro trades their clients have put on; rather, they will simply take the other side of these trades.
  5. A Book and B Book brokers can both run into big problems -- for themselves, and in turn, their clients -- if the larger banks and brokerage firms they offset orders with no longer take positions. This risk is known as liquidity risk. We saw liquidity risk have a devastating impact on both A Book and B Book brokers when the Swiss National Bank unpegged the Swiss Franc from the Euro, resulting in a huge move in a matter of minutes.
  6. As a general rule of thumb, the more illiquid instruments a broker offers and the more leverage they offer the more likely they are a B book broker whose positions in the market are a significant part of their business. These types of brokers are giving signals they are comfortable with liquidity risk, which means they are comfortable taking the other side of the customer's position.
  7. B Book brokers have a conflict of interest that makes it seem like they are dishonest and unethical, but they can offer their clients significant benefits that A Book brokers cannot. Namely, their willlingness to take on liquidity risk means they can offer prices and trading opportunities that would otherwise not be available. They bundle their customer orders to customers with lower trading costs, and offer trading free from restrictions like the pattern day trader rule or any uptick rule. As such, B Book brokers are not entirely bad or useless. What matters is whether you value the advantages they offer and that you trust them not to abuse their position as your counterparty.
  8. You can ask your broker directly about their dealing desk policy, though many will be coy about their status. This is largely because they feel uncomfortable about admitting their status as the counterparty to your trade, and because they generally do not educate their staff in the nuances of how they operate and make money.


 

Forum on trading, automated trading systems and testing trading strategies

Something Interesting in Financial Video September 2013

Sergey Golubev, 2013.08.31 08:00

91. How to Determine Your Position Size in the Forex Market

A lesson on the different contract sizes available to active traders and investors in the forex market.




 

How To Trade News Events: Consumer Price Index (CPI)

Consumer Price Index (CPI) measures the price that consumers pay for those goods. Released at 8:30 am eastern standard on approximately the 15th of each month, the Consumer Price Index (CPI) is a measure of the changes in prices paid by urban consumers for a fixed basket of goods and services.

The question that naturally arises when hearing this is wouldn’t those two numbers be the same or at least move in tandem with one another? The answer to that question is not necessarily, for the following reasons:

  • The PPI is designed to measure the entire marketed output of US producers which includes goods and services purchased by other producers. (The CPI includes only goods purchased by consumers)
  • Imports are excluded from PPI but included in CPI
  • Taxes paid as part of the purchasing price by the consumer are not included in PPI but are included in CPI.

The important thing to understand here is that while changes in PPI are normally looked at as having predictive power as to changes in the CPI, a rise or fall in the PPI does not necessarily mean the same rise or fall in the CPI. As this is the case, and as the CPI is the end price paid by the consumer, this number best represents the level of inflation in the US economy.

In addition to showing fluctuations in price for different areas of the country, the CPI also shows the fluctuation in price for different groups of products such as housing, transportation, medical care etc. This allows traders to see not only the price fluctuations of the overall economy but also for different areas of the economy.

There are two main CPI numbers reported which are the CPI for Urban Wage Earners and Clerical Workers (CPI-W) and the CPI for all Urban Consumers (CPI-U) which basically give two separate numbers for the price increases experienced by working people and the price increases experienced by all consumers.

As with the PPI the Consumer Price Index is also presented without volatile food and energy included. This “Core CPI” number or CPI-U minus food and energy is the most widely followed number.


 

How To Trade News Events: Two Trading Mistakes Which Destroy Your Account

  • One of the most common mistakes is sticking in a trade where you know your forex trading strategy is correct, but the market continues to move against you. Famous economist John Maynard Keynes once said: “The markets can remain irrational longer than you can remain solvent”.
  • People’s strong desire to be right will often times keep them in trades that they should have moved on from even though the market may eventually prove them correct. Many times when the market touches a support or resistance level it will have a brief spike upwards or downwards which hits the stops of a trader looking to profit from the reversal, taking him out of the market just as it turns in his favor. Because many traders think a like, often times the level at which the trader is taken out of the market is right at his stop level as well. If the trader gets lucky and the market does turn back in his favor this only goes to support this bad habit which will eventually knock him out of the market.


 

High Probability Trade Entries and Exits

James Chen, CMT, Chief Technical Strategist for City Index Group teaches high probability technical trading strategies that employ confluence principles for maximizing trade entries and exits.


 

Forum on trading, automated trading systems and testing trading strategies

Something Interesting in Financial Video June 2014

Sergey Golubev, 2014.06.29 20:05

Ichimoku Kinkō Hyō

Ichimoku Kinko Hyo (一目均衡表 Ichimoku Kinkō Hyō) usually just called ichimoku is a technical analysis method that builds on candlestick charting to improve the accuracy of forecast price moves. It was developed in the late 1930s by Goichi Hosoda (細田悟一 Hosoda Goichi), a Japanese journalist who used to be known as Ichimoku Sanjin, which can be translated as “What a man in the mountain sees.” He spent thirty years perfecting the technique before releasing his findings to the general public in the late 1960s.


Ichimoku Kinko Hyo translates to ‘one glance equilibrium chart’ or ‘instant look at the balance chart’ and is sometimes referred to as ‘one glance cloud chart’ based on the unique ‘clouds’ that feature in ichimoku charting.

Ichimoku is a moving average-based trend identification system and because it contains more data points than standard candlestick charts, provides a clearer picture of potential price action. The main difference between how moving averages are plotted in ichimoku as opposed to other methods is that ichimoku’s lines are constructed using the 50% point of the highs and lows as opposed to the candle’s closing price.

https://en.wikipedia.org/wiki/Ichimoku_Kinko_Hyo

  1. Ichimoku Charts – An Introduction to Ichimoku Kinko Clouds by Nicole Elliott
  2. Trading with Ichimoku Clouds – The Essential Guide to Ichimoku Kinko Hyo Technical Analysis by Menash Patel
  3. Cloud Charts – Trading Success with the Ichimoku Technique by David Linton

Forum on trading, automated trading systems and testing trading strategies

Something Interesting in Financial Video June 2013

Sergey Golubev, 2013.06.13 11:00

Ichimoku 101 tutorial

This is good tutorial on the high probability strategy for Ichimoku indicator in general. Ichimoku is standard indicator in Metatrader 5 and we can read here about this indicator. Besides, we can use this indicator as a custom one using this entry in MT5 Codebase for example.

From Stocks & Commodities V. 18:10 (22-30):

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Only now, in the early 21st century, are western traders really beginning to understand the power of this charting system created by one Japanese newspaper writer before the second World War.





 

Forum on trading, automated trading systems and testing trading strategies

Something Interesting in Forex Video May 2013

Sergey Golubev, 2013.05.02 15:03

This is very short video of 3 minutes 17 seconds: Why Watching the News Can Hurt Your Trading by Alexander Elder - trader and author, explains why he feels business TV can be detrimental to one's trading and believes standing aside can sometimes be the best approach.

Who is Alexander Elder? read this article Interview with Dr. Alexander Elder: "I want to be a psychiatrist in the market"

 

 


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