Sunday, May 24, 2020
what is price action in forex Trading
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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
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