September 17, at Are those systems still profitable? Everything, from entries to exits, position sizing to money management, everything was clearly established to the very last detail.
XE Currency Charts
Consequently, the upside targets are at the psychological handle before a test of the July peak at To contact Justin, email him at Justin. Fundamental Forecast for GBP: After starting the week well, with positive noises coming out of the EU over the proposal, the EU told the UK that the plan was unworkable and would need major revisions, something the UK has already ruled out. In normally circumstances, and these are anything but, a bearish view would be warranted but both sides still need to make an agreement as a no-deal would badly affect both economies.
The sidelines remain the place to be for now. And before then the annual four-day Conservative Party conference, starting on September 30, may well see a fresh leadership challenge unless the PM can convince the party faithful to back her. The best Brexit-pair, EURGBP , shows how damaging the last 24 hours has been for Sterling sentiment with the pair rebounding sharply to a fresh two week high.
Traders may be interested in two of our trading guides — Traits of Successful Traders and Top Trading Lessons — while technical analysts are likely to be interested in our latest Elliott Wave Guide. To contact Nick, email him at nicholas. Fundamental Forecast for Gold: Gold posted a moderate rally this week, trading higher until Friday when the metal surrendered earlier established gains.
Also on Friday, the hourly chart reveals multiple tests of short-term support which dates back to mid-August. A break higher would likely need a significant fundamental development to carry through with conviction, which is rather unlikely with a quiet economic calendar this next week.
However, one notable event is present Wednesday. The Federal Reserve is due to announce their decision on the interest rate range which currently rests at 1. Although the event will be watched closely by investors, markets have already priced in a hike.
Falling in line with the current trend of 25 basis point hikes, CME futures have the probability of an increase to 2. Historically, gold demand wavers as equities provide strong returns. As US equities push to record heights, gold interest should dip. It could be argued the ongoing trade wars should stoke some safe haven interest but this has not been seen in the past few months, with gold posting a multi-month decline.
Conversely, retail positioning at IG remains net-long on gold. View how our clients are positioned on gold and other assets. All in all, it looks as though gold is positioned for a break lower. Considering the limited upside potential, waning safe haven demand, strong equities, and priced in Fed decision, we could see gold test support dating back to in the upcoming week. Fundamental Forecast for CAD: The past week saw the Canadian Dollar weaken towards 1.
The Bank of Canada provided a relatively balanced statement, leaving the door open for a hike in October. As we look towards next week, the Canadian Dollar may see somewhat of a quieter week from the data front with a lack of tier 1 data to drive price action in the CAD.
Fundamental Australian Dollar Forecast: The Australian Dollar has risen to three-week highs against its big US brother, getting perhaps even more of a respite than I predicted this time last week. This is perhaps surprising in an environment of terrible trade relations between Washington and Beijing. However, some investors are clearly betting that events will stop short of a full-blown trade war, and that might be translating into a bit of current Aussie Dollar strength.
That said the coming week may not offer Aussie bulls a lot more to charge at. They have been there since August and, according to rate futures market pricing, are expected to stay put for the rest of this year and all of next. The rate gulf has kept AUD under broad pressure for much of this year and, although that long downtrend line is now perhaps under threat, it is still in place.
Of course, the Australian Dollar is like all other currencies very much in thrall to global risk appetite and, if that holds up, it may well continue to gain. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. Be sure to make the most of them all.
Previously, the New Zealand Dollar was on pace to deliver its best performance against the US Dollar in a week this year so far. It could thank a better-than-expected New Zealand GDP report and market pre-positioning for the risk of a relatively dovish Fed. The week ahead boasts a couple of notable event risk starting with the Reserve Bank of New Zealand interest rate announcement. Overnight index swaps are now pricing in a Despite the rosy GDP data, annualized rates of growth have slowed from the strong performance seen in Meanwhile the country has been experiencing mild disinflation since The markets are widely anticipating a rate hike and that may very well be.
But they are also strongly pricing in another one for December. This would help lift the US Dollar once more. With that in mind, while the New Zealand Dollar has edged out a remarkable rally, there is the risk that it could come to a halt or reverse course. The outlook will be bearish. Doing the math in advance proves this to be true in most cases. Another important aspect of taking large losses quickly is the amount of damage that can be done to the account and what it takes to recover.
If the calculations are not done in advance, the damage can be catastrophic. Here is a quick example. The new balance is back to break even, correct? No it is not! That is a negative effect of compounding. The account is now down By what amount do I need to increase the balance now just to get to break even? No, in fact I have to increase by about Now you can see how it is possible to dig the hole so deep that it may take a long time, if at all, to recover.
Note also that my lot sizes will have to decrease if I take the same risk. This alone contributes to a longer period of time to recover. To sum it all up, can a trader make a lot of profit quickly with an Expert Adviser? In addition to all of the new regulations that went in to effect on October 18, and that affect all US citizens, there is a new CFTC risk disclosure that contains many interesting elements. The purpose of this article is to point out some of the more important aspects of this disclosure.
The full text can be found at most broker sites. In addition, you can send an email to mt4tradingforum gmail. Rather than quote the entire text, only portions will be noted.
Beginning with the very first point, it would seem that the CFTC has not done its homework. Even though this is clearly the case with dealing desk brokers market makers , apparently the CFTC does not understand that STP brokers are indeed not a counter party in transactions. That is a discussion for another day. In any case, this statement makes it perfectly clear that market makers clearly trade against clients. As we discussed in a previous article, who do you think is better at trading, the broker or you?
It would seem the deck may be clearly stacked against the average retail trader. In fact, there is no central exchange in the Forex market. Since it is worldwide market, there may never be such a central exchange. That is why prices and spreads can be very different among brokers. Would having a central exchange level the playing field? The third point is especially striking. In essence, the broker can do whatever they please with client funds. That does not look as though the broker is acting in the client's best interests, does it?
After reading point 4, you may begin asking yourself why you even trade in Forex! For all intents and purposes, the broker can charge anything it wants for spreads and can fill orders at any prices it chooses.
It is somewhat ironic that IB's are now required to be registered yet they are still able to have conflicts of interest with clients. To sum it all up, these disclosures do not seem to bring much comfort to the retail trader. What is a trader to do then? One suggestion is to read the disclosure, understand the risks and continue trading!
After all, what market is not risky? Arguments could be made that all markets are rigged in some way or another. The key is to enter with one's eyes wide open, manage the risk and develop and use an edge that provides more profits than losses. Simple, or so it would seem. In a previous article on slippage, we discussed the distinction between dealing desk brokers market makers or MM's and Straight Through Processing STP brokers.
Both types of brokers have orders filled using Liquidity Providers or LP's. So what exactly is an LP? Very simply, it is generally either a bank or financial institution that fills currency orders placed on what is known as the spot forex market. The opposite is true if I sell the currency or take a short position. Each pip has a monetary value based on the current value of each currency traded. If the LP makes two pips on the transaction, then that is what they keep for filling your order.
The volume and liquidity available for a specific currency are very important factors in determining spread. As a result, spreads will often be very low compared to less liquid currencies. Liquidity is determined by the marketplace. In other words, the currencies that are traded the most tend to have the lowest spreads. Volume, on the other hand, is determined mostly by the time of day and the time of year that currencies are traded.
There are 3 distinct sessions and these will be covered in another article. In addition, summer time in the Northern Hemisphere and holiday time tend to offer lower volume. The lowest volume session is usually the Asian session. Basically there are many fewer traders during this time. Since there has to be a buyer for every seller and vice verse, having less volume at this time makes perfect sense.
Less volume can mean more difficulty in getting orders filled. This should be taken into account when using either trading robots or when manually trading. If you recall from the previous article on slippage, dealing desk brokers make their own market. STP brokers do not. Even though both use LP's to fill orders, there is much more room for profit taking with a market maker. With STP brokers, you are trading against other traders. It is important to note that the price feeds offered by LP's break down into two categories: These categories also apply to two distinct types of traders.
Institutional traders make up the vast majority of the market and comprise banks, hedge funds and any larger financial institutions. If you do the math, you will quickly see that there is not as much liquidity available each day as you may have been led to believe.
Another reason for this is leverage, a topic that will be covered separately. That is a complete myth. Just try to open and close trades during important news events. At these times, spreads for ANY currency can widen substantially.
You guessed it, the dealing desk brokers tend to make a killing during these times. On the other hand, orders from STP brokers are simply filled at whatever prices are available at that point in time in the actual market. The technology used by all parties is by no means perfect and that must be factored into the equation. The MetaTrader 4 MT4 platform is completely free yet rises to the occasion quite well, all things considered. Assuming your trading account is hosted with a VPS Virtual Private Server that protects against power outages and dropped Internet connections, most orders are placed flawlessly in seconds.
However there can be disconnects either at the broker or the LP end and the user must be diligent in watching for these occurrences.
To sum up, an LP is the party that ultimately fills all orders in the Forex marketplace. The huge difference is that market makers can tack on more cost spread to each transaction arbitrarily. STP brokers give the user whatever the market is offering at any point in time. The difference in results can be tremendous. Be on the lookout for future articles covering leverage, margin calls, VPS services and more. Spot Forex is traded in lots. Currencies are measured in pips, which is the smallest increment of that currency.
To take advantage of these small amounts, you need to trade large amounts of a particular currency in order to make either a significant profit or loss.
The end result shows the value per pip. Your broker may have a different method for calculating pip value. Be sure to check with them if you have any questions. As the market moves, so will the pip value depending on the currency. A Forex margin call happens when a client's account equity falls below the required margin. Leverage financed with credit is one definition of a margin account.
This is very common in Forex. A margined account is a leveraged account in which Forex currencies can be purchased for a combination of cash or collateral. Various brokers accept different limits. Investing on margin isn't the same as gambling. There are some similarities between margin trading and the casino. Margin is a high-risk strategy that can yield a huge profit if handled correctly. The dark side of margin is that you can lose your shirt and many other assets you own.
Investing on margin without understanding what you're doing is very risky. As with any other investment research is the key to not losing your shirt! At this point, some or all of the client's open positions will be closed immediately at current prices. Positions will be automatically closed once usable margin drops below zero. Check with your broker for specifics since requirements vary. Traders may avoid margin calls by either using stop loss orders or maintaining adequate funds in the account.
Normally the broker will have a minimum account size also known as account margin or initial margin e. Once you have deposited your money you will then be able to trade. Can a margin call hurt me? The answer is yes and very badly. But as in any other business there are things you can do to minimize your risk.
If for any reason the broker thinks that your position is in danger--i. Automatic stop loss is utilized as the safety net where the position is forced to cut automatically when the losses are at a certain point. It happens when the balance of margin account, that is, the asset value with deducting the losses, falls short of the margin limits set by your Forex broker. This practice is a common practice in the Forex market. There is a difference from weekday trading and over the weekend trading.
Reduced leverage is available leverage for over-the-weekend. The purpose of this policy is to protect clients from the risks caused by possible price swings during market closure. This could have a very serious affect on your invested funds. There are some common sense ways to avoid a margin call: Good money management, manage how you trade.
Use a stop loss for every position if you don't have adequate margin. Do not over trade. Have rules and stick to them. A pip is the smallest price increment in forex trading - pip stands for percentage in point.
In this example we can see that the spread is 3 pips wide. It is also important to note that pips are not the same in every currency pair. The exception is JPY. Previous articles have touched on using proper Money Management MM when trading, especially when trading with a live account. It is said by some traders that the only thing that matters when trading is risk, period.
In other words, as long as I know my risk per trade and I manage that risk, then I will be successful at trading in the long run. Let's do some analysis and you can draw your own conclusions. One of the simplest measures is percentage. Note that pip values vary by currency. Be sure to always know a currency's exact value when doing these calculations. Currency converters are readily available by doing a Google search. Therefore, my stop loss SL must be 20 pips for this example because 20 x 10 equals As a result, I need 2 wins for every loss just to break even.
That's a big difference. It should be obvious that in order to risk more pips per trade, I simply decrease my lot size. By trading with 0. You can do the math for other scenarios. Note that these rules generally apply to both manual trading and automated trading.
In the end, you must determine your risk tolerance in advance. In other words, you ask yourself how much you are willing to lose when a trade goes against you. Risking more per trade can mean higher gains when you win but also higher losses when you lose. A primary goal of trading should not just be making a profit but living to trade another day.
In forex, investors use leverage to profit from the fluctuations in exchange rates between two different countries. The leverage that is achievable in the forex market is one of the highest that investors can obtain. Leverage is a loan that is provided to an investor by the broker that is handling his or her forex account. When an investor decides to invest in the forex market, he or she must first open up a margin account with a broker.
Usually, the amount of leverage provided is either Standard trading is done on , units of currency, so for a trade of this size, the leverage provided is usually The leverage provided on a trade like this is Leverage of this size is significantly larger than the 2: If currencies fluctuated as much as equities, brokers would not be able to provide as much leverage.
Although the ability to earn significant profits by using leverage is substantial, leverage can also work against investors.
For example, if the currency underlying one of your trades moves in the opposite direction of what you believed would happen, leverage will greatly amplify the potential losses. To avoid such a catastrophe, forex traders usually implement a strict trading style that includes the use of stop and limit orders.
Coupled with the fact that there are fewer devices such as firewalls in the way, this ensures that we are able to deliver the trades as quickly as possible. We also do not oversubscribe our servers. As they are part of our own infrastructure, in the event of a problem, we can support you completely rather than referring you to your VPS provider, who would probably refer you to us.
We take complete ownership of any problems. Our VPS's can be used by other software though, so if you are in a position where you already have a VPS with another provider, you can switch everything over to our service. A number of our clients use our servers to great affect with other applications. FAQ Results per page: We appreciate your business and do all that we can to service your needs Q How does your replicator work?
A Our replicator works with any broker world wide who support an MT4 account. Q How to Allocate Trading Capital A Depending upon a trader's financial resources, it is vital to understand how to properly allocate trading capital.
Q How to Calculate Risk A This article will cover calculating risk in manual trading and also how to check Expert Advisers EA's to make sure they are making this calculation properly. Q Performance based billing A If you have a service which is on a performance fee based plan, then there will be additional charges based on the performance that the provider attains in your account.
Q Refund Request A Per the terms of service, if a trade copier is not cancelled before the invoice date then the invoice is final.