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Forex Trading Systems
2006-12-02 16:12:07
I recently added another directory category for Chart-Based Trading System s, so there are now two categories devoted to trading systems, which I thought I'd highlight here: Automated Trading Systems Includes: FX Engines, MetaTrader 4, ProSignal, TradeBolt, OneDayTrades, Strategy Runner. Chart-Based Trading Systems Includes: BunnyGirl Cross, RickyD System, Ichimoku Kinko Hyo, Trendfollower, Simple Candlestick System, Woodie's CCI System. Since there are dozens if not hundreds of systems available, I'm sure I've just scratched the surface of what's out there. So any suggestions for ones I've missed would be much appreciated! More directory topics...
More About: Forex , Forex Trading

In case you're wondering about that Thanksgiving dollar melt
2006-12-02 16:12:07
If, like me, you'd just publicly stated you were looking forward to a nice, quiet carry trade through the holiday and then discovered on Wednesday that your stops were gone, and then discovered on Friday that the dollar had been pounded down even further, you might be excused for wondering what the hell just happened. Since I certainly don't have the answers (just scroll down a bit to my previous post for proof of this) I'll hand you over to Kathy Lien and Boris Schlossberg at Daily FX for an excellent analysis of the holiday craziness: Carry Trade Liquidation Hits the US Dollar [Note to self: next year consider liquidating your trade before the holiday rather than blogging about it.] Euro and Pound Reach Multi Month Highs Looking for more forex news? Check out these Forex News Services.
More About: Thanksgiving , Hat , About , Ring

Marketocracy
2006-12-02 16:12:07
OK, so this isn't strictly forex related - but it's a cool concept and may make you some money too: Mark et ocracy.com Marketocracy tracks the portfolios of a community of investors, and then combines the 100 best-performing ones into a fund called the m100 Index. Here's how they describe their strategy: "Marketocracy has recruited over 55,000 people to manage over 65,000 model portfolios at www.marketocracy.com that compete to become the best investors. For over 3 years we have tracked, analyzed, and evaluated their virtual trading activity and have accumulated a massive database; following over 10,000 stock positions at any one time and more than four million trades." If you believe their performance chart, it's worked pretty well so far: As far as I can tell forex traders aren't included in the Marketocracy community, but they should be. Maybe there's an opportunity to develop a similar fund focused around a community of currency traders? Or maybe one already exists...I...

How Often Do You Break Your Trading Rules?
2006-12-02 16:12:07
In my opinion two of the quickest ways to end your trading career are (1) trade without a system and (2) break your trading system's rules constantly, which is basically the same thing. I've also found that one of the best ways to improve your trading consistency, and the performance of your trading system, is to develop feedback loops that identify flawed strategies and costly behavior patterns and filter them out of future trades. One way to do this is by keeping a detailed log of every time you break your trading rules. Each time you break a rule, record what rule you broke, what reason you gave yourself for breaking it, and the outcome of the rule-breaking trade (or missed trade). Reasons you might give yourself for breaking a rule are: This was an extra-special one-of-a-kind case because X happened That's a bad rule anyway This trade doesn't really count I have a second unofficial trading system that exists in a parallel universe I was angry about the previous trade ...
More About: Trading , Break , Your , Rules , Rule

What's the biggest thing you've ever thrown after a losing t
2006-12-02 16:12:07
Being human, I usually get seriously annoyed after a trade goes the wrong way...I haven't thrown anything yet, but I have been known to mutter and curse angrily at my screen, the cat, my coffee, and anything else that happens to be in the room. Forex trading can be a pretty solitary pursuit, and as a result you can sometimes feel like the only person getting frustrated by the market...so it's always good to get some perspective and realize you're not the only one with issues. As Rich over at Forex Project pointed out this week, even the experts don't always make a killing. The reason I ask about the throwing is because I was reading about a noted stock picker you've probably heard of because he's all over the place. I'm not going to name him because (a) guessing games are fun and (b) I don't want him throwing anything at me. But according to his Wikipedia bio, during his days running a (very successful) hedge fund he was noted for throwing telephones and computers around th...
More About: What , Hat , Sing , Ever , After

The Economist Covers Carry Trading
2006-12-02 16:12:07
Not long ago the Economist ran a good article on the risks and rewards of carry trading. Here are a few of the highlights: "In the foreign-exchange version of the carry trade, an investor receives an income by borrowing a low interest rate currency and owning a higher-yielding one. This produces a positive return most months, but the risk is that the high-rate currency will devalue, resulting in a heavy loss." "Cynics have described these bets as 'picking up nickels in front of steamrollers'. [Great quote, huh?] A long series of small gains is punctuated by the occasional wipe-out. However, from the point of view of a hedge-fund manager, it is a perfectly rational approach." The article also makes the point that trading against the interest-positive direction (or "anti-carry trading," as it could be called) will usually be a losing strategy, unless the market is clearly trending that way. However, it concludes rather ominously by stating that: "Low volatility and the carry trade...
More About: Trading , Carr , Cover , Over

The Thanksgiving Carry Trade...Or, How I've Been Short the E
2006-12-02 16:12:07
[Well, Murphy's Law kicked in and it's up over 1.2900 today, taking my stops with it...so no Thanksgiving carry trade after all. This trade turned out to be quite a turkey.] For the past week or thereabouts I've been sitting on a short EUR/USD position that has been possibly the most boring trade I've ever had the displeasure to make. A week ago the pair was hovering around 1.2820 and aside from a 30 pip run up in the last couple hours it's been doing the same thing this week. Tomorrow I won't be surprised if it's back somewhere between 1.2820 and 1.2830. Since I'm not expecting a lot of volatility over the Thanksgiving holiday and weekend - especially considering the tedious and annoying lack of volatility lately - I think I'll end up just holding this interest-positive position until next week and make a few dollars from the holiday carry trade. Unless of course I wake up tomorrow and suddenly the EUR/USD is above 1.2900 and heading higher, in which case please disregar...
More About: Carr , Trade , Giving , Short

Tired of Moving Averages? Try a Moving Median
2006-08-09 03:09:02
One day I got bored with testing out different moving averages, perhaps the most common indicator in use among traders. So I decided play around with a related statistical function, the median. According to Wikipedia, "In probability theory and statistics, a median is a number dividing the higher half of a sample, a population, or a probability distribution from the lower half." Interestingly, in strict statistical terms the median is actually a type of average, since the term "average" describes a variety of different methods for determining the central tendency or "middle" of a set of data (read more about this in the Wikipedia article on averages.) What most people typically understand to be an average is in fact the "arithmetic mean," which like the median is one of several measures of the middle of a data set. Going back to Wikipedia, the arithmetic mean is "the sum of all the members of the list divided by the number of items in the list." So if you have five prices from five...
More About: Media , Moving , Rage , Dian , Vera

Forex & Currency Trading Blogs
2006-07-12 19:04:00
If you ever get bored with this forex blog (unlikely, I know, but still possible) I highly recommend these other online purveyors of forex wisdom. I've included their RSS or XML feeds when I could find 'em so you can subscribe if you have an RSS reader (My Yahoo is free and easy to set up, here's where to get started.) Enjoy! The Forex Project Frequent updates from a trader who's testing out
More About: Currency Trading , Trading , Blogs , Currency

Weighting your trading signals to improve performance
2006-05-11 20:55:00
One strategy I've considered while designing forex trading signals is assigning a weight to each signal based on its overall performance in predicting market movements. Just as a weighted moving average assigns greater importance to more recent price data with the goal of improving its predictive accuracy, weighted signals would gain or lose importance versus other signals based on certain types
More About: Performance , Trading , Improve , Signal , Form