Saturday, December 12, 2020
How to trade forex on news releases - 3 Powerful Strategy [99.99% success]
Watch on YouTube here: How to trade forex on news releases - 3 Powerful Strategy [99.99% success]
Via https://www.youtube.com/channel/UCJqrI1ub1OEPYvml7L31dYA/videos
Monday, December 7, 2020
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Saturday, July 18, 2020
What is Forex Scalping? – Forex Scalping Definition
In order to understand What is Forex Scalping, you need to understand what the term “scalping” actually means. When you are looking to “scalp the market”, you are looking for short term trades, sometimes lasting just a few moments. Because of this, you are not worried about economic conditions or fundamental analysis, you are worrying about places that you may or may not see momentum in the market.
In order to be an effective scalper, you have to be able to get in and out of the market rather quickly. This is because you are not necessarily looking for anything more than a quick gain, taking advantage of little pockets of illiquidity or spaces of “thin air” in the market. Once you get good at reading charts, you can start to recognize support resistance, and more importantly in this case: micro support and micro resistance. It is not uncommon for a scalper to have trades that last for just a few minutes, or even just seconds. Because of this, it takes a very quick mind and nerves of steel to do this type of trading.
Why someone would be a scalper
There are a multitude of reasons why somebody might be a scalper, not the least of which is that it is much “safer” to be in and out of the market that it is to hang on to a long-term position, possibly even losing money overnight while you are not in front of the computer. A true scalper would never consider holding a position overnight, or for that matter several hours. They are looking to pick up little bits and pieces of profit along the way. Many scalpers will point to the fact that they are simply “small fish in a large ocean”, referring to the larger institutions out there. In that sense, they are a bit afraid of going up against the large institutions, but also know that they have an advantage in the sense that they do not have to put so much into the market, meaning that they are going to be much more nimble both entering and exiting.
Scalping takes extreme concentration and discipline
Scalping is not something that you do on a whim. It takes extreme amounts of concentration and is something that also takes a lot of skill. Quite frankly, scalping is not something that traders should do until they have quite a bit of screen time in front of them. Having said that, you can always use a demo account as a great way to practice in live conditions.
Perhaps even more important is the ability to have discipline when trading. If you are in a losing trade, you need to get out sooner rather than later. This is because if you are not quick to take your losses, they can compound rather quickly. This is because quite often scalping is done with large positions, so therefore it can compound against you. Speaking of which, you need the discipline to trade in manageable sizes. Remember, as a scalper you are trading little micro movement, not something that it is developing over the longer term, meaning that the slightest little deviation in monetary flow can move the market for or against you.
A couple of ways to scalp
The first ingredient of a decent scalping market is to find one with a small spread. This is because a market that has say seven pips for the spread, you could struggle to overcome that wide of a gap. However, in a market like the EUR/USD pair that has little in the way of a spread, it makes your job much easier.
Brick walls
When you look at markets, quite often you will see areas where the market cannot get through. You may see several candles in a row that are struggling at the same price, showing that there are either buyers or sellers in that range. If that is going to be the case, then obviously if the market breaks through that level it means that it is likely to continue going in that direction, at least for the short term. You can see the set ups all over the place on short-term charts, but you need to be patient enough to see the market break through these levels. Quite often, a trader will wait for a break of one of these “brick walls” in order to pick up three or four pips. Obviously, it comes down to your trading plan, but that is just an example of how they can be taken advantage of as there will be a little bit of a lack of orders against you once you break through that initial barrier.
Round number bounce
Another potential trading opportunity is when the market is sitting at a round figure. For example, the 1.10 level could be an area of a lot of interest due to the psychology of that big figure. However, there are also other ones that are minor large, round, psychologically significant numbers that could also attract a lot of attention. For example, the 1.08 level might attract a lot of attention. Quite frankly, a lot of scalpers will simply play for a bounce from that level, as they know a lot of the larger funds will have order flow in that area. Again, we are simply looking for a short-term gain of just a few pips.
Make it your own
At the end of the day, you are going to need to trade how you are comfortable with, because of course there is a certain amount of psychology and comfort that is needed in order to be able to perform on a consistent basis. Because of this, you need to demo trade your scalping ideas and recognize when things are working against you. You have to have enough confidence to get out when it is time to, and enough patience to wait for the set up to occur. Even though you are only trying to scalp the market, it is not uncommon for a scalper to sit around and wait for just a couple of opportunities during a trading session. It is not constant action, rather it is quick in and out when you are active.
The post What is Forex Scalping? – Forex Scalping Definition appeared first on The Diary of a Trader.
Friday, July 17, 2020
Thursday, July 16, 2020
Monday, July 13, 2020
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Wednesday, July 8, 2020
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Wednesday, July 1, 2020
Monday, June 29, 2020
Saturday, June 27, 2020
Thursday, June 25, 2020
Monday, June 22, 2020
Sunday, June 21, 2020
Friday, June 19, 2020
Thursday, June 18, 2020
How to trade forex with $100 [ small cap trading strategy ]
so you want to start trading and want to know How to trade forex with $100, then keep reading. For the last 20 years or so, brokers around the world have allowed retail traders to jump in and start trading currencies. Believe it or not, at one point in time you needed at least $1 million to trade currencies, and you would have had to have done so through specific banks. This spread would have typically been several handles, meaning hundreds of pips. This of course has changed in the 21st century as the retail sector has gained so much in popularity.
That being said, attracting a lot of retail traders does open up some specific questions now, due to the fact that retail traders typically trade with small amounts of money. Yes, there will be some people who have significant amount of money to trade with, but most of the people are simply entering the market with little in the way of trading capital.
How to trade forex with $100 – Need to consider
Being undercapitalized can be dangerous
One of the most dangerous things for a retail trader is to be undercapitalized. This is because with high leverage, you can quite often trade 50, 100, or even more times the amount of margin available to place a trade. The biggest problem of course is that although you can enjoy massive gains, being able to trade larger positions also means you can suffer massive losses. Being undercapitalized and not understanding the market is one of the most dangerous combinations the traders come into Forex with.
With all that being said, it does not necessarily mean that being a smalltime trader is a death sentence. You need to have a bit of money management practiced in order to survive. When you are a small Forex trader with a small account, survival is absolutely paramount. Fortunately, Forex accounts quite often can trade with as little as one penny a pip. In other words, it is quite often that you can take very minimal risk. Ironically, it is the high leverage that attracts traders into the currency market that is also their biggest enemy most of the time.
Expectations must be realistic
You must keep your expectations realistic. For example, you cannot expect to open up an account with $100 and become a millionaire by the end of the year. A simple statistical analysis and an understanding of compound interest will tell you just how impossible that is. However, that does not mean that you cannot grow your account over time. If you have a small account, you simply must be more patient with your gains. For example, if you have a $100 account, doubling it will only turn it into a $200 account. Doubling an account is quite a feat, and certainly something that would be an achievement to be proud of. Doubling an account is something that very few traders do unless they are thinking longer-term and protecting their accounts from significant losses. In some ways, trading a smaller account is much more difficult than trading a larger one.
Do not forget you can add to your account
Compound interest will work for and against you. However, one thing that you can do quite easily is simply add a little bit to your account as you gain. For example, you can set incremental deposits into the account, raising the value of account right along with your gains. This is the way to “supercharge” your account, and perhaps grow it into something that is quite profitable over the longer term. At the end of the day, if you choose not to add to the account and simply start with a small deposit, time and patience will be what you need more than anything else. This will be accomplished by using money management and keeping your expectations realistic. You have to keep your position size in line with what your trading, otherwise it is only going to take truly little in the way of losses to wipe you out.
The post How to trade forex with $100 [ small cap trading strategy ] appeared first on The Diary of a Trader.
Tuesday, June 16, 2020
Monday, June 15, 2020
Friday, June 12, 2020
Monday, June 8, 2020
How to use the ADX indicator in Forex – ADX indicator formula
The ADX, also known as the Average Directional Movement Index, is an indicator that Forex traders will use in order to measure the strength of a trend. It represents the average of price ranges that are expanding or contracting. It shows a line that moves up and down with several levels on a window at the bottom of the chart underneath the price graph. It measures the strength of the movement but does not define the direction of the movement. It measures strength using a basic scale.
What ADX Indicator measures
The Average Directional Movement Index measures the moving average of expansion of price during a specific amount of candles. The default setting for this indicator is 14 candles, and that will be by far the largest amount of examples that you will see out there in technical analysis. The indicator has no directionality building, it simply measures whether or not a trend is strengthening or weakening. It will show a single line that goes up and down between the 0 level and the 100 level. It will measure higher levels based upon price expanding over the last set amount of candles. It will also start to drift lower if the price expansion moving average is getting lower over the same set of candlesticks.
It should be noted that there are also +DI and -DI lines on the chart that are calculated, but quite frankly most Forex traders completely ignore them. This is based upon a larger trading system that Bill Williams used to use, so therefore unless you are trying to trade that specific trading system, you will simply ignore those.
What it means
In order to read the ADX, you need to understand that there are certain levels that people pay the most attention to. For example, if the reading is below 25, it tends to mean that there is a weak or nonexistent trend. If the ADX is between 25 and 50, it is considered to be a strong trend, while between 50 and 75 is a very strong trend. Above 75 to the 100 reading is the strongest of all trends.
By looking at the number that the ADX is flashing, it can verify whether or not we are trending, and perhaps more importantly whether or not a specific trait up makes sense. The ADX is in the secondary part of a trade for most traders, as they are looking for candlestick setups or some other such reason to get into the trade, with the ADX confirming whether or not the market is starting to pick up momentum. If you can find a decent set up that also called site quite nicely with a strong ADX reading, it only gives you more of a reason to be involved.
Let profits run? Or heed warning?
The great thing about the ADX is that if you are already in a trend and have already placed your trade, it can give you a bit of a “heads up” if the momentum is slowing down. If they are not, then you simply let your profits continue to run, one of the best ways to make money in the market. However, if the ADX starts to dip lower in your trade, then it can give you an idea that it may be time to start thinking about taking your profit.
Furthermore, there is also the possibility of divergence, meaning that as price moves in one direction, the ADX moves in the other. Because of this, it shows that perhaps although price is moving in a specific direction, there is no real conviction behind the trade, showing what is known as “divergence” by most traders. This is true with all oscillators, but ADX tends to be one of the better ones for this type of trading.
The post How to use the ADX indicator in Forex – ADX indicator formula appeared first on The Diary of a Trader.
Wednesday, June 3, 2020
How to trade forex options – FX Options Explained
You can trade currency using options, instead of betting on the spot price. This allows you to define your total risk, going into the trade. For example, you can buy a call option, which gives you profit if the markets break above a specific level, or you can buy a put option which gives you profit if the markets fall below a specific level. You can also sell both of those options in order to benefit from the market not getting there. There are a whole host of various strategies to go far beyond the scope of this article but suffice to say options are a great way to mitigate risk going into a trade.
It should be noted that the only true options exchange is the CME Group in Chicago. Yes, there are liquidity pools that will match up options just as they will spot Forex and are regulated. However, they are not true exchanges and there is a bit of a difference.
Calls and puts
There are two different types of options, known as “calls” and “puts.” A “call” is betting that the market is going to rise in value while a “put” is the opposite, betting that the market is going to fall in value. The great thing about options is that you buy one of these at a set price and cannot lose any more than the agreed to value of the premium paid. If the market does not do what you want it to do, you simply lose whatever you paid, and the option expires worthless.
However, some people will sell these options, which is a little bit trickier, but does generate income. For example, if you sell a “call” with a strike price of 1.11, meaning that it pays off above that level, and the buyer pays a premium of $300 at the time you are selling, you get to collect at $300. However, it is worth noting that if the trade goes against you, it is likely that your losses will start to accelerate at an exponential value. In other words, it can be quite expensive if you hang on to that position. However, it is a great way to collect premium from a longer-term standpoint, as long as you know basically where the market is not going to go.
Strike price and expiration
Options have both a strike price, meaning where they are geared to and where they pay, and in expiration. Quite often you will see something like a strike price of 1.17 in the EUR/USD, and the expiration can be anything from minutes to hours, days to weeks. Be aware of when the expiration is because the value of the option starts to deteriorate much quicker the closer you are to the expiration if not “in the money”, which means that the market has reached whatever price was expected. If it is getting late in the option life, this is statistically calculated based upon the likelihood of the option becoming valuable.
Hedging
A lot of longer-term Forex traders will buy puts on a long position they plan on holding to for quite some time. For example, if you believe that the Euro is going to rise against the dollar over the next five years, occasionally buying a put is a cheap way to keep yourself in the market. If you buy a put for $200, and the market goes against you and hits the put strike price, you may be able to mitigate quite a bit of your losses from the longer-term “buy-and-hold” spot Forex trade. Worst case scenario, you lose the $200 that you had bought for “insurance purposes.”
Options in general
There are hundreds of options strategies, and that clearly is beyond the scope of this video or article. However, we wished to introduce you to the concept as options are most certainly an unbelievably valuable strategy for those looking to play the market from a longer-term standpoint, or simply defined their risk ahead of time. By being aware of this market, it can expand the way you trade currencies.
The post How to trade forex options – FX Options Explained appeared first on The Diary of a Trader.
Sunday, May 31, 2020
How to read ATR in Forex – Average True Range Indicator Explained
ATR, or the Average True Range indicator measures the volatility of a market by measuring the price range for a defined amount of candlesticks. It is used as a measure of potential volatility and quite often used by traders to determine how far to set targets or even stop losses. While ATR is used with just about any time frame, the original use of ATR was based upon daily candlesticks, analyzing the volatility over the last 14 candlesticks, which is the default setting.
Recently, the ATR indicator has been used by day traders, as it can give traders an idea of how much further a trade can go. It also can suggest perhaps if a market is overbought or oversold, whether or not it has the ability to continue going further before perhaps closing out your positions and going home. Longer-term traders will look at the ATR to determine whether a pullback in a trend, or of bounce from oversold condition is possible.
How to read ATR in Forex and Using the ATR
Using the Average True Range indicator when trading Forex is quite common, but you should remember that the indicator is not necessarily a system in and of itself. It is simply a way to determine whether you are in a trend in environment, and whether or not there is enough left in a potential trend or move for the session to get involved. Obviously, the ATR will be greatly influenced by how quick the pair moves, so the ATR range for a minor pair or exotic pair will be much higher than something like the EUR/USD.
Keep in mind that the ATR reading will change drastically as extreme conditions occur. It should also be noted that this measures volatility, not directionality. In other words, if the ATR comes in at 220 pips on a daily chart, it does not matter whether or not the market is going up or down, it gives you the same reading. In that sense, you should look at the ATR is a secondary indicator, as it will simply tell you the potential size of the move, not which direction you should be trading. Having said that, if you have an ATR of 75 on the chart you are trading, and the recent move has only moved 20 pips, all things being equal you should be looking for a move of 55 pips.
You can also use the ATR to set stops, which is probably one of the biggest uses for the ATR on the whole. Again, if you have an ATR that is 75, a stop loss of 75 pips is quite often used as the potential stop loss. Think of it this way: if the market moves more than the average against you, then it suggests that you are completely wrong in the position, and it is time to get out.
A few things to consider
Keep in mind that the indicator itself is not reason enough to take a trade. It simply a bit of a roadmap of what could happen, not even necessarily what will happen. You need to have a system in place to take trade, using the ATR to back up your stop losses and/or targets. Because of this, you need to already know what you are doing before using this indicator as a supplement.
The post How to read ATR in Forex – Average True Range Indicator Explained appeared first on The Diary of a Trader.
Thursday, May 28, 2020
Wednesday, May 27, 2020
What is price action in Forex?
If you are trading for any time at all, you will eventually come across the term “price action.” It is not an easily defined term, as there is no set parameter as to what would be price action or what would not be price action. Ultimately, price action is the movement of the markets over time. In other words, if the market is rising in a Forex pair, then it would be considered to be “positive price action”, or perhaps “bullish price action.” On the other hand, if a market is falling, then it is considered to be “negative price action”, or sometimes is called “bearish price action.”
Luckily, charting platforms make it quite simple to see whether or not the most recent action or even longer term action in the market is positive or negative, and learning to read price action is the most basic of skills that you will need as a Forex trader. For example, you need to understand whether or not price has been rising or falling over the longer term, giving you the ability to understand the most likely of outcomes for any trade that you have.
Price action encompasses everything that happens
Sometimes, price action is simply the market going back and forth. This is referred to as “consolidation”, is quite often forms various technical patterns that people will pay attention to. Bullish flags, bearish flags, rectangles, triangles, and many other formations are referred to by their name, but essentially it is just a form of the market going back and forth before its next move. In this scenario, you need to pay attention to the fact that the market is going nowhere in the short term, but also recognize when price action suddenly changes, and we break out of an area of back-and-forth trading. This shows that the market is ready to start trending again.
By being able to read what the market is doing, you have the ability to place trades with a bit more confidence, but nothing is 100% accurate. However, over the longer term if you do trade with the market and the price action, then you have much more likelihood of becoming successful.
You should never trade against price action
One of the biggest mistakes that retail traders will make is that they try to trade against price action. For example, they may believe that the currency pair has “fallen too far”, and then start buying it. That is the wrong way to look at the market, because quite frankly the market can move much further than you anticipate. There is a reason that the market has been falling, and simply jumping in because it is “cheap” is a great way to lose money, because things can always get “cheaper.” Obviously, this works the opposite way as well. If the market has “risen too far” it is not time to start trying to sell it.
Recognize when markets break support or resistance
Price action encompasses almost everything you can see on a chart. However, one of the most important things that new traders can learn is to recognize when support or resistance has been broken. If there is a level that the market has had trouble breaking above, but then finally does, that can be for referred to as “the market breaking above resistance.” On the other hand, if there is an area that the market has not been able to fall through, but eventually does, then it becomes a break down below support. These are signs that the market is highly likely to go further, and this gives you a hint that you want to be involved with that move.
Study price action
In order to become a successful technical trader, you will need to learn price action in general. This involves shapes, trends, and even to a lesser extent indicators. If you do not study and then pay attention to price action, you are doomed to fail. You need to know what the market is trying to tell you. While nothing will keep you from having losses, if you work with the market as opposed to against it, you have a much better chance of success.
The post What is price action in Forex? appeared first on The Diary of a Trader.
Sunday, May 24, 2020
Thursday, May 21, 2020
What is Forex Scalping – Forex Scalping Definition
In order to understand what Forex scalping is, you need to understand what the term “scalping” actually means. When you are looking to “scalp the market”, you are looking for short term trades, sometimes lasting just a few moments. Because of this, you are not worried about economic conditions or fundamental analysis, you are worrying about places that you may or may not see momentum in the market.
In order to be an effective scalper, you have to be able to get in and out of the market rather quickly. This is because you are not necessarily looking for anything more than a quick gain, taking advantage of little pockets of illiquidity or spaces of “thin air” in the market. Once you get good at reading charts, you can start to recognize support resistance, and more importantly in this case: micro support and micro resistance. It is not uncommon for a scalper to have trades that last for just a few minutes, or even just seconds. Because of this, it takes a very quick mind and nerves of steel to do this type of trading.
Why someone would be a scalper
There are a multitude of reasons why somebody might be a scalper, not the least of which is that it is much “safer” to be in and out of the market that it is to hang on to a long-term position, possibly even losing money overnight while you are not in front of the computer. A true scalper would never consider holding a position overnight, or for that matter several hours. They are looking to pick up little bits and pieces of profit along the way. Many scalpers will point to the fact that they are simply “small fish in a large ocean”, referring to the larger institutions out there. In that sense, they are a bit afraid of going up against the large institutions, but also know that they have an advantage in the sense that they do not have to put so much into the market, meaning that they are going to be much more nimble both entering and exiting.
Scalping takes extreme concentration and discipline
Scalping is not something that you do on a whim. It takes extreme amounts of concentration and is something that also takes a lot of skill. Quite frankly, scalping is not something that traders should do until they have quite a bit of screen time in front of them. Having said that, you can always use a demo account as a great way to practice in live conditions.
Perhaps even more important is the ability to have discipline when trading. If you are in a losing trade, you need to get out sooner rather than later. This is because if you are not quick to take your losses, they can compound rather quickly. This is because quite often scalping is done with large positions, so therefore it can compound against you. Speaking of which, you need the discipline to trade in manageable sizes. Remember, as a scalper you are trading little micro movement, not something that it is developing over the longer term, meaning that the slightest little deviation in monetary flow can move the market for or against you.
A couple of ways to scalp
The first ingredient of a decent scalping market is to find one with a small spread. This is because a market that has say seven pips for the spread, you could struggle to overcome that wide of a gap. However, in a market like the EUR/USD pair that has little in the way of a spread, it makes your job much easier.
Brick walls
When you look at markets, quite often you will see areas where the market cannot get through. You may see several candles in a row that are struggling at the same price, showing that there are either buyers or sellers in that range. If that is going to be the case, then obviously if the market breaks through that level it means that it is likely to continue going in that direction, at least for the short term. You can see the set ups all over the place on short-term charts, but you need to be patient enough to see the market break through these levels. Quite often, a trader will wait for a break of one of these “brick walls” in order to pick up three or four pips. Obviously, it comes down to your trading plan, but that is just an example of how they can be taken advantage of as there will be a little bit of a lack of orders against you once you break through that initial barrier.
Round number bounce
Another potential trading opportunity is when the market is sitting at a round figure. For example, the 1.10 level could be an area of a lot of interest due to the psychology of that big figure. However, there are also other ones that are minor large, round, psychologically significant numbers that could also attract a lot of attention. For example, the 1.08 level might attract a lot of attention. Quite frankly, a lot of scalpers will simply play for a bounce from that level, as they know a lot of the larger funds will have order flow in that area. Again, we are simply looking for a short-term gain of just a few pips.
Make it your own
At the end of the day, you are going to need to trade how you are comfortable with, because of course there is a certain amount of psychology and comfort that is needed in order to be able to perform on a consistent basis. Because of this, you need to demo trade you’re scalping ideas and recognize when things are working against you. You have to have enough confidence to get out when it is time to, and enough patience to wait for the set up to occur. Even though you are only trying to scalp the market, it is not uncommon for a scalper to sit around and wait for just a couple of opportunities during a trading session. It is not constant action, rather it is quick in and out when you are active.
The post What is Forex Scalping – Forex Scalping Definition appeared first on The Diary of a Trader.
Friday, April 24, 2020
ETX Capital review | trading platforms review, Pros, Cons
If you are looking for a well-established and trusted online brokerage form, ETX Capital could possibly be one of the better choices out there. It has been in business since 1965 and is British base of course it offers all of those extra protections. Read our ETX Capital review to evaluate the pros and cons of this broker and choose if it is suitable for your needs. This article is dedicated to reviewing one of the best regulated brokers and to give you a clearer idea of what to expect in case you decide to open an account with them.
ETX Capital Review
ETX Capital is a British based brokerage firm in London that offers Forex, metals, CFD markets, in order to give retail traders the world. They are highly regulated being British and fall under the auspices of the Financial Conduct Authority. Safety and protection of funds is crucial, and falls under the FSCS, or the Financial Services Compensation Scheme in Britain that protects customers of to 50,000 GBP. This of course allows for traders to feel comfortable.Trading accounts
ETX Capital offers individual accounts only, and of course demo accounts. Because of this, it’s relatively straightforward as all traders have the ability to take advantage of all assets that the broker offers. This is further split by whether you wish to use MetaTrader 4 or their proprietary platform.
The company
ETX Capital is a British based company, offering a non-dealing desk approach to the markets. They are heavily regulated by British authorities and several others around the world. With that in mind, keeping your money here is a safe proposition, especially considering that they have been around since 1965 making them one of the oldest brokerages that we have reviewed.
ETX Capital Trading conditions
Initial deposit
As mentioned previously, ETX Capital doesn’t offer an account for anything less than a $5000 deposit. This is a somewhat high bar to cross, and not all of you will be able to take advantage of this firm. However, if you have more than enough trading capital, this will give you an opportunity to trade with one of the most highly regulated firms in London.
Spreads and conditions
ETX Capital offers tight spreads, in a variable spread environment. The average spread for the EUR/USD is 0.6 pips, while the average spread for gold is 0.09 pips. CFDs such as the Dow Jones 30 average 1 pips. With that type of tight spreads being offered, you can see that fighting profit won’t be overly difficult.
Leverage
ETX Capital offers tight spreads and conditions, with 1:30 leverage. The leverage is a bit lower than some other brokerage firms, but it is much more professional as most of the time when you are offering several hundred times leverage, you are simply trying to get retail traders to blow up their accounts quicker. This gives you more protection, which is the biggest advantage to trading at ETX Capital.
Trading platforms
ETX Capital offers MetaTrader 4, the most widely used platform in the world. This allows the ability to add automated trading strategy and of course thousands upon thousands of indicators that are freely available online. Beyond that, they also have the ETX TraderPro platform, which has access to thousands of assets, and of course a full suite of professional and customizable bells and whistles. They also have a mobile app that mimics TraderPro, albeit in a much more basic way.
Payment methods
ETX Capital offers both deposit and withdrawal options including bank wire, credit card/debit, Union Pay, Neteller, SoFort, and Skrill. This allows traders to be able to access their money and fund their accounts rather easily, as most of you will have plenty of access to these options.
Extras
ETX Capital has a very strong extras section on their website, as there is plenty of educational webinars, videos on specific types of assets that they offer, platform videos, risk management education, and of course all about margin. In fact, this is probably one of the strongest suits, the fact that they offer so much in the way of extras for traders to learn from.
The post ETX Capital review | trading platforms review, Pros, Cons appeared first on The Diary of a Trader.
Thursday, April 23, 2020
Monday, April 6, 2020
Best algorithmic trading strategies (Now you are safe)
Algorithmic trading strategies are making a large foray into the retail sector now, as they take a lot of the emotion out of trading. After years of experience, I can tell you certainly that the psychology of trading is probably the Achilles’ heel for almost everyone. While it seems quite straightforward to look at a chart and decide to make a trade or get out, the reality is that when you are watching your profit and loss statement go up and down erratically, things get much more difficult. This is why demo trading is only so good, and the reality is that trading with real money is 10 times as hard.
Enter the computer
Most professional shops now use a variety of discretionary, systematic, and most certainly algorithmic trading strategies. In fact, if you ever look for a trading job at one of the larger firms, one of the first things that are quite often mentioned is that you should have some type of programming experience. Quite often you will see Python mentioned, but there are other languages that traders will use. This is because what most traders do now is back test a strategy, and then plug that strategy into a program that execute orders over the longer-term. This takes a lot of the guesswork out of trading, and if there is a positive expectancy with the system, over time it stands to reason that the trader should make money.
Markets change
One thing that you should pay attention to though is that markets do change. With that in mind you should recognize that being an algorithmic trader isn’t a “one and done” proposition. Quite frankly, you will back test quite a bit and constantly look for new strategies. It is most commonly used to trade short-term charts, and therefore can be fooled by extreme amounts of volatility.
Systems can be bought
Trading systems can be bought, but keep in mind that most of the professional shops out there are using programs that they spend millions of dollars on using Ivy League PhD’s to write them. Because of this, you should be very cautious about buying a system for $99. That doesn’t mean it can’t work, but the reality is that you will need to back tested and not just plug it in and start trading real money. All things being equal though, if a system performs in a specific market condition, that is exactly what you should be using it for. Unfortunately, far too many people will use one system to trade every market in every time frame. Make sure you read the directions for its specific use.
The post Best algorithmic trading strategies (Now you are safe) appeared first on The Diary of a Trader.
Saturday, April 4, 2020
Sunday, March 29, 2020
Exchange Rate: Currencies and Their Importance in The Markets
It is common when we travel to a foreign country; we have to change our money for the currency of our destination. The same happens when we buy online stores located in those countries. But how are those changes made? What does it depend on? In this article, we will discuss what the exchange rate is and how it affects when going from one currency to another, and in the financial market itself.
Definition of Exchange Rate
The exchange rate corresponds to the proportional relationship that exists between the value of two currencies. This type of change indicates the units that we are going to need from one to be able to get one from the other.
The origin of establishing an exchange rate system is found in the existence of international trade since these countries have different currencies. All those companies that are interested in buying currencies from other countries for their transactions must do so in the currency market. This is in charge of establishing the price of the different currencies in relation to the national currency. That price is called the exchange rate.
As a curious fact, the ten most used currencies in the world are:
- American dollar.
- Euro.
- Japanese yen.
- Pound sterling.
- Australian dollar.
- Swiss franc.
- Canadian dollar.
- Mexican peso.
- Chinese yuan.
- New Zealand Dollar.
Currency market
The currency market is also known as Forex. And it is the abbreviation of the Anglo-Saxon term Foreign Exchange. The different currencies are traded in it, and it is a decentralized and global market.
The origin of this market was intended to simplify and favor the monetary flow from trade between countries. This type of market is the largest in the world in financial terms. With its volume of transactions, it is possible to reach figures of up to five trillion dollars every day.
The currency market has the following characteristics:
- It covers many countries.
- Great variety of people and companies that intervene in the market.
- Trading hours change.
- The factors that generate the exchange rates are very different.
- It operates 24 hours a day. Except for weekends.
- Trading volume.
- Excessive market liquidity.
Forex Analysis
At this point, we will talk about the two types of analyses that are carried out to be able to evaluate the currencies and have certainty of where it could evolve.
#1. Fundamental analysis
It is often used with a long-term view of investors. It estimates the different areas, such as GDP, inflation, the interest rate, the unemployment rate, or the industrial production index. And from there, the possible forecast is developed in relation to the development of these aspects.
#2. Technical analysis
Forex market technical analysis is used in a shorter period, or in the medium term. It is done to determine the evolution of more frequent or day-to-day movements in the currency market. The function of technical analysis is to predict the closest time flows of currency prices.
What affects the exchange rate?
The exchange rate can be affected by various factors. Below we talk about them:
Political factors. The different conflicts or problems of the countries in this area can be reflected in monetary policy, either in the same country or internationally, due to globalization. We have been able to see it many times on the Stock Exchange.
Economic factors. This is caused by problems such as inflation, the public and commercial deficit, unemployment, GDP, or the CPI, among others.
Market psychology. A priori it may seem like the least important factor or the one that can least affect the exchange rate. But the truth is that, especially in recent years, with tools such as social networks, non-real situations have been created that have destabilized the market, due to rumors or false news. As it happened in April 2013, with a hoax posted on Twitter about a possible attack in the White House. This translated into Wall Street indices of a drop of more than 1%. This behavior is reflected in the foreign exchange market prices.
Exchange rate systems: fixed and flexible
There are two exchange rate systems, fixed and flexible. Next, we will see what they consist of and how they differ from each other.
Fixed exchange rate
The competent authorities of the foreign exchange market have established an exchange rate as fixed in order to maintain it. This is not related to the supply and demand that a certain currency may have, but is done to prevent potential investors from speculating on the currencies. This would be the main reason, although there may be others. The tactics that are usually used are to hold the value of the country’s own currency to a foreign one or to attach it to a material good, such as gold.
Establishing fixed exchange rates is not only for investors but also for banks since they will not be able to take measures to act in the currency market. The positive side of this policy is found in the benefits it provides to international trade. It makes it more inalterable before possible exports and imports that may be carried out in the future. As a disadvantage, central banks have the role of influencing currency markets, but they will not be able to touch interest rates.
Setting a fixed exchange rate is done for a long period of time. If a significant problem occurs in politics and/or in the economy, as we said before, it can be subject to adjustment so that it remains in a fair status. But for the exchange rate to be preserved, a series of measures must be taken related to different circumstances.
A fixed exchange rate currency can be found, for example, in the Franc (CFA), the official currency of several countries in sub-Saharan Africa such as Mali, Ivory Coast, Todo, or Benin.
Among the situations that can occur are:
Excess of foreign currency. This supposes an increase in the reserves of the central bank. To deal with this situation, foreign currency will be purchased, offering the national currency of the country in question.
Excess demand for foreign currency. The central government of the countries must offer the foreign currency. This is reflected in a decrease in state reserves.
Flexible exchange rate
In contrast to the fixed, this is related only to supply and demand. Market flows are responsible for regulating the exchange rate between two currencies.
Depending on the circumstances of the moment, a different problem will occur, as was already the case with the fixed exchange rate. An example is a case of having an oversupply of the national currency. The balance is reached when there is a devaluation of this currency, which causes its price to drop. Another situation that may occur is an excess in your demand. The equilibrium in the market will be reached with an increase in its price.
Among the advantages that this type of exchange offers, we find that the system will be more flexible, in addition to monetary autonomy, in which countries will be able to determine interest, depending on the economic situation.
As for its negative side, we can find the speculation that appears when large amounts of money are moved, something that destabilizes the market. This insecurity also damages international trade, being a very big risk for the possible investor.
The post Exchange Rate: Currencies and Their Importance in The Markets appeared first on The Diary of a Trader.
Saturday, March 21, 2020
Tuesday, March 17, 2020
Dukascopy review – Dukascopy europe Brokers Review [Pros & Cons]
Dukascopy is a Forex and CFD brokerage based in Geneva Switzerland. The broker also has a large banking group that it represents, meaning that you can have your bank account as well as your trading account all in one place. That being said, we will focus on the trading part obviously.
Trading accounts
Dukascopy offers only one type of live account but does of course offer a demo account option. At this point, you are either trading with real money or not. There is a huge amount of advantages which we will go through in trading live here, and the account gives you access to not only the Forex but also the CFD markets that Dukascopy offers. You do have the option of trading with a couple of different platforms.
Dukascopy company overview
Dukascopy is a fully regulated Swiss Bank, offering protection up to 100,000 CHF for each client’s account. The trading aspect of the company focuses on active traders, professionals, services banks and hedge funds, and gives you protection in all markets. It is also a publicly traded company, with the shareholder capital reaching 22 billion CHF. Dukascopy has long been one of the true leaders in the ECN arena.
Trading conditions
Initial deposit
The initial deposit at Dukascopy is US$1000, but quite frankly this is a much more professional brokerage than most people deal with on a regular basis. However, with the massive amount of tools and extras available with the company, $1000 should not be a major hurdle.
Spreads and conditions
Dukascopy offers multiple markets to trade, including Forex, Indices, and Crypto. The spreads are extraordinarily tight, such as 0.1 pips on the AUD/USD pair, the 0.3 pips on the EUR/JPY pair, and 0.9 on the XAU/USD pair. Keep in mind that there are also commissions charged, so that will have to be factored as well. However, the commissions are minimal at best.
Leverage
Leverage at Dukascopy goes as high as 1:200, at least in the major and minor currency pairs. Commodity markets are 1:100, while individual equities are 1:10. Cryptocurrencies have leverage up to 1:3, giving you plenty of leverage and various markets.
Trading platforms
Dukascopy uses the well-known MetaTrader ecosystem, using version 4. They also offer Java based platforms, JTrader, iOS, Android, and Web Based platforms for all markets. The broker also offers automated trading through the JTrader platform.
Payment methods
Dukascopy allows features only two ways to fund the account, either credit card or bank wire. This is probably the one area that this broker could improve, but wires are fast as it is an actual bank.
Extras
Dukascopy offers a massive amount of information for traders. Research is thorough, news is released quickly, through their own television station. They have plenty of analysis and fundamental information as well. The trading ideas are robust and precise, just as they offer many other potential benefits such as a sentiment index.
Dukascopy is possibly one of the most complete brokerages in the world. It’s very professional, and unlike many other brokerage firms, you would find it impossible to outgrow the offerings.
The post Dukascopy review – Dukascopy europe Brokers Review [Pros & Cons] appeared first on The Diary of a Trader.
Monday, March 16, 2020
How to Use the ADX for Forex Day Trading
One of the things that you must be aware of as a Forex trader is volatility. Volatility can be your friend, but obviously you need to be on the right side of it. If volatility suddenly disappears, that’s also assigned to get out of the market unless of course you are looking at a range bound trading system. All things being equal, one of the best indicators out there to use on most platforms is going to be the ADX indicator, or the Average Directional Index. in this article i will show you How to use adx indicator for day trading hope you enjoy.
What is the ADX?
The ADX, or Average Directional Index, measures the strength of a trend based upon the highs and lows of price bars over a specific amount of periods, with the typical setting being at 14. As a general, when the ADX crosses the 20 level it is a sign that we are beginning a new trend, either up or down. Alternately, a move lower in the ADX is a sign that a trend is ending.
Unlike many other indicators, the ADX isn’t directional. It simply shows strength. What this means is that you are just as likely to see a high reading in a downtrend as you are in and uptrend. This simply measures the strength of the prevailing trend on the chart over the last 14 candles, or whatever setting you choose.
A few words about the ADX
The first thing you should always remember is that it does not indicate the direction of the trend. Most of the time, traders will use something along the lines of a moving average on the chart to determine the overall trend, and simply use the ADX as a guide as to whether or not the trend is likely to continue. Because of this, it’s very rare that a trader will use the ADX by itself in a system. It should be thought of as a secondary indicator, as it is somewhat reliable, but by itself doesn’t give enough information to make an informed trading decision
It should also be recognize that the ADX is a lagging indicator. This means that it reacts to price, not predicts what is about to happen next. It shows a lack of momentum or an increasing momentum when it comes to trading. Obviously, news events can change the entire outlook of a currency pair, in the blink of an eye. You should always use proper money management when using the ADX, and as mentioned previously it makes quite a bit of sense to look to other indicators to confirm anything that the ADX tells you.
All of that being said
All of that being said, the ADX has been trusted by traders around the world in a multitude of systems. There is a reason why it is so popular, and quite frankly it can provide early warnings as to when a trend is about to end, which is obviously a significant piece of information. It also can confirm that the trend is still strong, which is obviously something that you will want to know getting into one.
The post How to Use the ADX for Forex Day Trading appeared first on The Diary of a Trader.
Friday, March 13, 2020
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