Monthly Archives: July 2016

How to Make Profits With Automated Forex

If you want to be successful in the Forex market, then automated Forex trading software could be your most precious helper. It will give you a distinct edge against your competition, and it could also decipher the various Forex trading signals rapidly, helping you gain profits by utilizing ideal trading opportunities.

However, having automated Forex trading software should not be the be-all and end-all that determines your success in the Forex market. There are many other things that you need to keep in mind in order to achieve your goals. Being successful in the Forex industry involves a lot more than just having the tools.

It is very important that you stay focused and concentrate on the Forex market. Intuition can play a big part in this however; it can be frightening if you depend on your intuition excessively. Trading the Forex market should also be based on adequate research, comprehension of the market, and proper analysis of trading signals and fluctuation trends. It is very important that you do not allow your emotions to take over your sound judgment when trading in the Forex market. Many times, Forex traders become depressed or frustrated because they missed a golden opportunity. There will always be another golden opportunity so don’t stress the ones you miss.

There are many traders that will tell you that automated Forex trading systems are excellent, because they take away the emotional human factor which can interfere with the trading process. If you lose trades then it will have some impact on your ability to step up and take another trade. It is really important to have a system that has been tested.If, for example, you encounter a losing streak, then take a break from the market for a little bit. It is probably a good idea at this time to make a clean slate in your mind. Remember that even though you are using automated Forex trading software, that it is still possible to lose your money in the market 90% of the time.

You may have heard that automated Forex trading software can help you become more successful in the industry. However, this does not solidify success. It is still necessary that you equip yourself with basic background information, as well as basic trading skills. It’s very important that you familiarize yourself with the way the Forex industry works, how it operates, and the rules and regulations associated with it – prior to even getting involved.

There are many types of automated software programs that are given away for free on some websites, these often have limited functionality and sometimes they have viruses so it is always safer to purchase one. With any software whether free or paid to upgrade to the newest version. There are many good selections in the field of automated Forex trading software. You should opt for software that has great customer support and gives you various ways of giving your feedback about the particular software program. It is a good idea to check other customer feedback which will help the decision making process. Do not depend on opinions – stick with only the facts.

A demo account is also absolutely necessary. Prior to beginning your Forex trading in real time, you would want to give a fair shot to trading with your demo account. This would help you test and learn the Forex automated trading software. It is important to note that some demo accounts work great with some software programs, but once you enter into real trading, trouble arises. This is why it’s important to make sure that the customer service is of optimal quality. And, if the software has a money-back guarantee, if the problem cannot be resolved, then you get the money back.

Money management is the key to trading. Until you get confidence and have some back testing done and even forward testing then keep your trading to small amounts of money. Don’t ever get overly greedy. If you raise your risk too high, this might not be a good idea and catastrophic results could happen. Always use proper money management skills, and you’ll go far in the Forex industry. There is no doubt that an automated Forex trading program can help you get a head start in the market, but you also need a great deal of self-confidence and the proper trading mindset to succeed.

This entry was posted in Auto by .

Forex Trading Strategies

The Trader’s Fallacy

The Trader’s Fallacy is one of the most familiar yet treacherous ways a Forex traders can go wrong. This is a huge pitfall when using any manual Forex trading system. Commonly called the “gambler’s fallacy” or “Monte Carlo fallacy” from gaming theory and also called the “maturity of chances fallacy”.

The Trader’s Fallacy is a powerful temptation that takes many different forms for the Forex trader. Any experienced gambler or Forex trader will recognize this feeling. It is that absolute conviction that because the roulette table has just had 5 red wins in a row that the next spin is more likely to come up black. The way trader’s fallacy really sucks in a trader or gambler is when the trader starts believing that because the “table is ripe” for a black, the trader then also raises his bet to take advantage of the “increased odds” of success. This is a leap into the black hole of “negative expectancy” and a step down the road to “Trader’s Ruin”.

“Expectancy” is a technical statistics term for a relatively simple concept. For Forex traders it is basically whether or not any given trade or series of trades is likely to make a profit. Positive expectancy defined in its most simple form for Forex traders, is that on the average, over time and many trades, for any give Forex trading system there is a probability that you will make more money than you will lose.

“Traders Ruin” is the statistical certainty in gambling or the Forex market that the player with the larger bankroll is more likely to end up with ALL the money! Since the Forex market has a functionally infinite bankroll the mathematical certainty is that over time the Trader will inevitably lose all his money to the market, EVEN IF THE ODDS ARE IN THE TRADERS FAVOR! Luckily there are steps the Forex trader can take to prevent this! You can read my other articles on Positive Expectancy and Trader’s Ruin to get more information on these concepts.

Back To The Trader’s Fallacy

If some random or chaotic process, like a roll of dice, the flip of a coin, or the Forex market appears to depart from normal random behavior over a series of normal cycles — for example if a coin flip comes up 7 heads in a row – the gambler’s fallacy is that irresistible feeling that the next flip has a higher chance of coming up tails. In a truly random process, like a coin flip, the odds are always the same. In the case of the coin flip, even after 7 heads in a row, the chances that the next flip will come up heads again are still 50%. The gambler might win the next toss or he might lose, but the odds are still only 50-50.

What often happens is the gambler will compound his error by raising his bet in the expectation that there is a better chance that the next flip will be tails. HE IS WRONG. If a gambler bets consistently like this over time, the statistical probability that he will lose all his money is near certain.The only thing that can save this turkey is an even less probable run of incredible luck.

The Forex market is not really random, but it is chaotic and there are so many variables in the market that true prediction is beyond current technology. What traders can do is stick to the probabilities of known situations. This is where technical analysis of charts and patterns in the market come into play along with studies of other factors that affect the market. Many traders spend thousands of hours and thousands of dollars studying market patterns and charts trying to predict market movements.

Most traders know of the various patterns that are used to help predict Forex market moves. These chart patterns or formations come with often colorful descriptive names like “head and shoulders,” “flag,” “gap,” and other patterns associated with candlestick charts like “engulfing,” or “hanging man” formations. Keeping track of these patterns over long periods of time may result in being able to predict a “probable” direction and sometimes even a value that the market will move. A Forex trading system can be devised to take advantage of this situation.

The trick is to use these patterns with strict mathematical discipline, something few traders can do on their own.

A greatly simplified example; after watching the market and it’s chart patterns for a long period of time, a trader might figure out that a “bull flag” pattern will end with an upward move in the market 7 out of 10 times (these are “made up numbers” just for this example). So the trader knows that over many trades, he can expect a trade to be profitable 70% of the time if he goes long on a bull flag. This is his Forex trading signal. If he then calculates his expectancy, he can establish an account size, a trade size, and stop loss value that will ensure positive expectancy for this trade.If the trader starts trading this system and follows the rules, over time he will make a profit.

Winning 70% of the time does not mean the trader will win 7 out of every 10 trades. It may happen that the trader gets 10 or more consecutive losses. This where the Forex trader can really get into trouble — when the system seems to stop working. It doesn’t take too many losses to induce frustration or even a little desperation in the average small trader; after all, we are only human and taking losses hurts! Especially if we follow our rules and get stopped out of trades that later would have been profitable.

If the Forex trading signal shows again after a series of losses, a trader can react one of several ways. Bad ways to react: The trader can think that the win is “due” because of the repeated failure and make a larger trade than normal hoping to recover losses from the losing trades on the feeling that his luck is “due for a change.” The trader can place the trade and then hold onto the trade even if it moves against him, taking on larger losses hoping that the situation will turn around. These are just two ways of falling for the Trader’s Fallacy and they will most likely result in the trader losing money.

There are two correct ways to respond, and both require that “iron willed discipline” that is so rare in traders. One correct response is to “trust the numbers” and merely place the trade on the signal as normal and if it turns against the trader, once again immediately quit the trade and take another small loss, or the trader can merely decided not to trade this pattern and watch the pattern long enough to ensure that with statistical certainty that the pattern has changed probability. These last two Forex trading strategies are the only moves that will over time fill the traders account with winnings.

Forex Trading Robots – A Way To Beat Trader’s Fallacy

The Forex market is chaotic and influenced by many factors that also affect the trader’s feelings and decisions. One of the easiest ways to avoid the temptation and aggravation of trying to integrate the thousands of variable factors in Forex trading is to adopt a mechanical Forex trading system. Forex trading software systems based on Forex trading signals and currency trading systems with carefully researched automated FX trading rules can take much of the frustration and guesswork out of Forex trading. These automatic Forex trading programs introduce the “discipline” necessary to actually achieve positive expectancy and avoid the pitfalls of Trader’s Ruin and the temptations of Trader’s Fallacy.

Automated Forex trading systems and mechanical trading software enforce trading discipline. This keeps losses small, and lets winning positions run with built in positive expectancy. It is Forex made easy. There are many excellent Online Forex Reviews of automated Forex trading systems that can do simulated Forex trading online, using Forex demo accounts, where the average trader can test them for up to 60 days without risk. The best of these programs also have 100% money back guarantees. Many will help the trader pick the best Forex broker compatible with their online Forex trading platform. Most offer full support setting up Forex demo accounts. Both beginning and experienced traders, can learn a tremendous amount just from the running the automated Forex trading software on the demo accounts. This experience will help you decide which is the best Forex system trading software for your goals. Let the experts develop winning systems while you just test their work for profitable results. Then relax and watch the Forex autotrading robots make money while you rake in the profits.

Ben Theranbak is an avid student of history, economics, statistics and the markets. He has an MBA, an MS in Aeronautical Engineering and is a graduate of the Naval War College. A former Naval Aviator, Ben is a skydiver and world traveler.

Importance of Forex Trading

Online Forex trading is one of the most exciting, fast-paced market around.With well over $2 trillion transactions everyday, its obvious that no other market can do that and every body wants a cut of the pie. Until recently, Forex trading in the currency market had been the domain of large financial institutions, corporations, central banks, hedge funds and extremely wealthy individuals. The emergence of the internet has changed all of this, and now it is possible for average investors/trader to buy and sell currencies easily with the click of a mouse through online brokerage accounts.

With this emergence comes different people that are participating in the market and as such giving room for development in the way people trade currency.

People started using different methods and parameters to determine when to buy and sell currencies.These methods are what guide them in their decision making and as time evolve people begin to automate these methods to give them free time to do other things.

These automated methods are what is called Forex trading softwares today. Forex trading software also called EA’s or ROBOT have so many benefits over manual trading.

Some of the benefits of Forex Trading Softwares include:

* Emotion free, so less trader error
* Better, more consistent risk management strategies possible
* Frees up time and energy
* More complex AutoTrading strategies can be programmed
* Multiple timeframes can be examined simultaneously
* Multiple indicators can be examined simultaneously
* Multiple conditions can be examined simultaneously
* Allows system for defining market conditions ie Volatility, Trending, Consolidation.
* Allows for chart pattern recognition
* Allows for accurate practice testing of AutoTrade strategies prior to launch of funded accounts
* Faster Market entry and exits are possible
* Never sleeps so greater access to Market opportunities
* Virtually any trading style can be programmed to allow more consistent results
* Very cost efficient to program
And so much more.

What Is Automated Forex Trading?

With the continuous development in the field of information technology, the span of skills that artificial intelligence exhibit keeps on expanding wider and wider. Now, with the mode on trading foreign currency through the Internet becoming the main means of trading, artificial intelligence has now penetrated this field with automated forex trading. Forex autotrading, as some may also call it, is a trading strategy where buying or selling of a pair of currencies is automated by using a program whose functions are designed based on certain trading strategies. Usually, a forex trading program would do its buying or selling when certain preset criteria are met by the conditions of the market. This means of trading in the foreign exchange market is usually used by traders who have a significantly higher rate of trading and volume compared to the average trader.

The trading strategy used by one automated forex trading program will vary from that of another. The variety of strategies being used can vary as much as the variations between trading styles of real people have. The variation is usually caused by the programmer who designed the software. Depending on his preference, research, or beliefs, the programmer may include or omit certain indicators in the market, all of which could guide the program in deciding whether to buy or sell a pair of currencies at a certain point. Despite the wide variability, the inclination of the programs is always toward technical analysis, which is the use of mathematical indicators in deciding the move of a certain trader in the market. So, if you are more inclined to side with the fundamental analysis techniques, using forex autotrading may not be the option for you. This is because usually, once you have given the software control over your trading accounts, chances are likely that the program might have already made its move before you have decided to interfere.

If you still want to have control over you account, it is recommended that you find a forex autotrading program that will need your approval first before making its move. Although the disadvantage of this is that you may lag behind the trend if you missed out on approving the move at a critical point in the trend. All in all, the greatest advantage that automated forex trading programs can do for you is that it can do both the trading and analysis for you while you sleep on your money.

This entry was posted in Auto by .