In Forex, there’s a clear distinction between two groups of currencies—the majors and the exotics. The majors include the currencies that we all trade and which are relativity low in volatility, such as the US Dollar, the Japanese Yen and the Pound Sterling. Among the exotics, we can find riskier and more volatile currencies such […]
Can a trading strategy be doing too well? That sounds counter-intuitive, certainly. Like suggesting that someone can be too rich or too successful. You might be thinking there’s no such thing. But when it comes to managing your trading strategy, one that is performing too well is a warning sign. That’s because, quite often, an […]
How many times you have seen an FX pair, or any other instrument for that matter, start moving opposite to the trend? Did you wonder was it a mere correction or were you perhaps witnessing a change in trend? Your conclusion will have an acute impact on how you choose your next trade and thus […]
Trading textbooks are filled with methods and techniques to reduce the tension you feel when trading. Suggestions range from the most common, i.e. starting with small amounts and low leverage to instilling a disciplined strategy. If you’ve just started your trading adventure then this is exactly what you need. But perhaps you’ve got a different […]
Lately, I’ve been asked fairly often why I don’t write more for the novice trader. Well, good news! If you are, indeed, a novice trader then this trading strategy is right up your alley. But even if you’re not a newbie, you might still find this tip useful. This rather simple and straightforward strategy doesn’t […]
The great trade execution debate. Trade execution models and the terms STP, ECN, DMA, B-book / A-book, MM are widely discussed and often casually thrown about in conversations between traders and brokers. However, it goes so much deeper than this and getting an in depth understanding of an ideal execution model, its setup and what […]
Your forex backtests are absolutely worthless if you do not test the statistical entry efficiency and exit efficiency of the strategy. Everyone that runs a backtest inevitably reports the dollars earned as the outcome. Other factors exist like the average win to loss, the profit factor and the Sharpe ratio, but they do not tell […]
As with virtually any trading scenario, we must first determine the direction that we need to trade the pair for the greatest likelihood of success. By looking at the historical 4 hour chart of the GBPUSD below, there are several reasons we know that we want to go long (buy) the pair. Price action is […]
On the first Friday of each month the US Labor Department issues its Nonfarm Payrolls report. Among other labor-related data, that report provides the numbers of new US-based private sector jobs. The NFP, as it’s also sometimes called, is one of the few economic indicators that day traders and investors keenly watch. Usually, when the […]
The single most evident quality of range bound is, quite simply, falling volatility or Standard Deviation. As Standard Deviation falls, the pair has smaller fluctuations and therefore is “bound” within a range. Likewise, when Standard Deviation is low we are stuck in a range. If we can time Standard Deviation (and we can), we can […]
