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strategy correlation real test
Posted on 24 Jan at 16:13 by rokasltu
1. Overview

As I described in my previous article Analysis of Strategy Based on Correlation (part 1) my idea is to detect situations in market when major pairs usually moves in some certain intervals and to run strategy which catches movements inside mentioned intervals in three different pairs - EUR/USD, GBP/USD and EUR/GBP. As at year start where were quite big movements related with faded expectations for sooner than later GBP rate hike, SNB floor removal and ECB QE announcement I think presently pairs might find new fluctuation ranges not going so sharply to one direction as was at the year start. That's why I decided that presently is good time for further analysis of pairs correlation strategy and testing it in demo jforex environment. In this publication further development of strategies for GBP/USD and EUR/GBP pairs will be described (strategy for EUR/USD was described in previous publication) as well as real launch of all three pairs strategies in demo environment.

2. Strategy for EUR/GBP

Not going to deeply to visual jforex programming issues I will explain main principles of strategy prepared for working in EUR/GBP pair. Strategy layout is presented below:

Here is pr…
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Ecb 69.9 Pips Strategy
Ranking 10/34

ABSTRACT
This article tests the the volatility of the EUR/USD exchange rates related to the European Central Bank setting interest rate decision between 11/2013 and 12/2014 and provide a profitable trading strategy. In contrast to previous articles http://www.dukascopy.com/fxcomm/fx-article-contest/?Kiwi-Trading-Strategy-For-Non&action=read&id=2091#read-article and http://www.dukascopy.com/fxcomm/fx-article-contest/?Us-Gdp-Strategy&action=read&id=2138#read-article about NFP strategy and US GDP announcements which employed an hedging strategies at 20 and 10 Pips profits, this strategy provide a 69.9 Pips TP with a risk/reward ratio RR of 0.286.This strategy also differ from the previous in the magnitude hedging from the slippage and the spread of the news. It is improved the efficiency of the strategy considering that the ratio Efficient Profit/Slippage and Efficient Profit/Spread are different from the previous of around 1/10 order of magnitude. In this empirical analysis it is find the support for the hypothesis that central bank intervention is related to a negative differenence between ex ante and ex post measure of the exchange rate volatility. Instead, central bank…
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Introduction
This question above can be subset of broader and evergreen question “Can Robots or Intelligent Systems really replace humans?” However I will take analogy from some intelligent systems to arrive at the conclusion if trading robots can really replace Real Traders.
I will present my logic, benefits and drawbacks for you to take decision. It is based on some facts to help me arrive at conclusion and maybe my biased views but I think it will help in taking rational and informed decision. And maybe it will help in achieving the desired trading results. I cannot put a straight forward conclusion to the Robot Question and so it is my view based on some intelligent systems and may or may not subscribe to individual’s preferences.
Pros of trading with Robots
At the first sight Trading Robots give the feeling that they can earn real income and profits for you. And Unlike humans, robots can trade without sleep and rest - working tirelessly even for a week or for longer durations. One does not need to think a lot about gone trading chances or wasting time entering an order manually while the market moves again to other side making less favorable profitable position. Robots as …
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Trading Strategy "w"
Ranking 13/34
Use two trading strategies, the strategy of the trap which I have already spoken in a previous article and the strategy of "W" presented in this article, at the end of reading the reader will realize the potential for success this strategy.

The success of the strategy of "W" is based on realizing that the mass market make the same mistakes again and again, regardless of the knowledge and intelligence of the participants.

Most market participants base their trading on the following rules:

  • Buying Support
  • Selling on resistance
  • Buy in breaking strength
  • Rupture support sell
A large number of Traders enter the market with an operation after deciding the bias, they place the stop, if the jump stop, complain, analyze whether they have made a mistake, retire for some time to lick their wounds and promise to operate better the next time, after a few hours or days, they try to find a new opportunity in another crossing or market that makes them forget the last missed.
The strategy of "W" requires the Trader to continue focusing on price action though the first market entry has been losing, because if the pattern of "W" is finally confirmed, the Trader must be prepared to enter the…
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1.0 What is “Gap”?

A “gap” is a break that appears on chart between the prices that occurs when the price changes instantly towards up or down without having a trade between. Factors that can create gaps might be pressure on buying or selling, announcements about earning or a change in an outlook given by an analyst or other sorts of news.

The usual thought about the forex is that it is totally closed for the weekends, but that is only true to some extent. For the retails traders, it is closed, but for the central banks and organizations that are related to it, it is actually open 24/7. Transactions at the forex are always on, and they are being conducted electronically, so they can never be stopped. Since this kind of work is always going on, the prices are always changing – due to supply and demand, as somebody is always buying and somebody is always selling.

In article Trend Trading Strategy: Departure Trendline Setup we can see excellent chapter about gaps. There is table in this article where we can see 4 types of gaps. Runaway gap and Breakaway gap are gaps in strong market trend ( "no fill" gaps).

1.1 Runaway Gap

Figure 1: Continuation Gap or Measuring Gap or
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Do not listen to your heart - listen to your Forex broker!

On example of trading with Dukascopy.

This article will be based, on my own experience in trading.

Preface.

All traders know, that the main part of success trading is finding and choosing good Forex Broker. We have many articles about the criteria of good brokers and if you are reading this article here, on Dukascopy web site, you are in right place. When you open your chart in Dukascopy you see: Forex, Fun, Social. I want to add one more – helpful. Dukascopy not only wants to attract you to trade, Dukascopy wants you to trade successes. This is one of the main part in my article.

Today I will give to you all examples of how Dukascopy helps traders to be success. In addition, what can be happened if you will not follow your broker, if you do not listen to him.

Main part: Dukascopy wants you to make money.

Dukascopy team made great job to help to you to make money. They have all instruments to start with Jforex platform, Dukascopy TV, Dukascopy support and etc. Nevertheless, in my opinion, the main part here are news. You can learn all fresh news in one place. You can read them, see them and even discuss.

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When Buyer and Seller agree on both Price and Value, no trade will ever be made.

Buyer and Seller have to disagree on Value, not on Price, in order to make trades. Because there are many buyers and sellers in the world of currencies, there are alway people who value a currency different and so price keeps moving around. If one can predict value, one can predict price.

Fundamental analysis is all about predicting value, while technical analysis is all about predicting price. We can see price moving in the charts and so try to predict where it might be going, but forces we cannot see make the price go up or down. If we could only see those forces…

When observing the way market, volume and price change, we can see similar mechanics in the physics of pressure. Hang on for a few seconds, it’s quite simple.

Pressure and Forex: if i shake a bottle of champaign forcefully, the cork will pop out and champaign will be wasted. So if pressure rises in one places, stuff will go from where the pressure is high to where the pressure is low.

The same proces works for Forex price: if value differs, price will move. And again: by knowing where the pressure is, we can tell w…
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Currency Wars (volume I)
Ranking 19/34


The Forex market is a market made up of several world currencies; which are constantly fluctuating, thus providing an opportunity to make profitable transactions as these currencies appreciate and depreciate. The factors which affect the depreciation and appreciation of a currency are unique to the economy which uses the currency.

United Kingdom: GBP
United States: USD
Australia: AUD

The general principle is that healthy economies give rise to healthy or appreciating currencies; so we tend to see a currency appreciating as its economy improves.

This article will look at the indexes of the three currencies listed above; the analysis is purely from a technical point of view. We will examine some fundamental factors which are responsible for the currency’s appreciation or lack of it. The article will also evaluate the current position of the indexes; so that the information obtained can be useful in the nearest future.

United States Dollar (USD)

The USD index has been in an appreciative state since since May/June 2014. There were several factors responsible for this rise, and they all gradually led to a six-month USD rally.

The United States Dollar started its appreci…
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Different signals from Ichimoku.Everyone know the Ichimoku indicator. And, every time, don't need talk about its pros and cons.but to learn: https://en.wikipedia.org/wiki/Ichimoku_Kink%C5%8D_Hy%C5%8DIchimoku Clouds are extremely versatile in function for forex trading.I would like to explain some of the signals that also work in the trading .to determine UP or DOWN the trend, I use colors of cloud:when ,we have signals from SinkouA and SinkoB lines, we see clouds, which is accompanied by movement of the market UP or DOWN side.The overall trend :When senkouA is rising above senkouB the trend is stronger upward, and is typically colored green.When senkouB rises above senkouA, the trend is stronger downward and is denoted with a red-colored cloud.it the fakt.pic1.


The Tenkan Sen is an indicator of the market trend.
If the Tenkan Sen line is moving up or down, it indicates that the market is trending.
If it moves horizontally, it signals that the market is ranging. it the fakt
but, what if we change the rules?
I use different strategies. is their description here:



Strtaegy_1. The traders who use the ichimoku cloud as the basis for their trading strategy, to be a very reliabl…
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Trading Fundamentals & Price Action Part 1 When I started trading in Forex, almost three years ago, I started like the most of people, technically. With a lot of indicators and colors on the screen. After two years I realized that profitable trading in Forex can be accomplished in different ways and methods.
Some traders use only technical analysis, other fundamental and another a combination of both. And I became one of those who use the combination of both.

Why? Would you ask. Because when I was trading only technically I always had a feeling that something in my trading was missing, the market was still not clear for me. There were things happening in the market that were caused by something else than price action. It were The Fundamentals.

So I started to learn about fundamentals and begun to understand that on the big picture, we do not trade the price. We trade the economies, and their fundamentals. And they move the markets in large. But what is fundamental analysis in Forex anyway?
I think that it can be described as the study of underlying factors that drives the price of a currency, like strength of economy, its growth, political situation, actions of the central ban…
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Investing Vs Trading
Ranking 12/34
Investing vs Trading



Investing:

It is the act of investing; laying out money or capital in an enterprise with the expectation of profit. Well now we know what investing is, so let's move into the types of investing:

Investing in Property:
That can also be sub categorized:
1) Long Term Investment
2) Short Term Investment

1) Long term Property investment:
Investing in a housing land project, and usually investors buy for certain period of time of 10-20years. After the land value increases over the time, the investor can sell it, or build a house on that land or plot he bought with his saving capital.

2) Short term Property Investment:
Purchasing an apartment, commercial office, house and renting the place out for a short time with some tenant or client who is willing to pay some rent for a short period of time that could be between 1-3years per contract.

Investing In Saving Bank:
Savings banks, usually offer some interest over a period of time of 1month, 6month, 1year, depending on the saving plan. Clients start gaining the benefits after they open an account with them. Some saving banks also provide life insurance investment opportunities with clients.

Investing in Bon
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Atr Maniacs
Ranking 7/34
Average true range (ATR) is a technical analysis volatility indicator originally developed by J. Welles Wilder, Jr. for commodities. The indicator does not provide an indication of price trend, simply the degree of price volatility
(by Wikipedia)

Introduction


In this article, we suggest that there is some correlation between the strength of price trend and Average True Range Indicators. We suspect that when that ATR goes down, then a price trend is likely to the end. And we describes that by 3 chapters in this paper.
  1. How To Calculate ATR? Describes a more details of ATR Indicator which was used for this research.
  2. Chart Pattern Analysis. This is an abstract explanation by standard chart patterns. Sections: Double Top, Triangle.
  3. Back Test Analysis. This is a concrete explanation by the 759679 orders of 5 currency pairs back-test result(2004 - 2014). Sections: Trading rule, Filters, EUR/USD(152304). GBP/USD(149175), USD/JPY(152798), USD/CHF(150498), USD/CAD(154904), Summary.
Chapter 1: How To Calculate ATR?

At first, you needs to calculate a true range. The range of a day's trading is a high minus low price. And the true range extends it to yesterday's closing price if it was out…
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You come to Forex, everybody welcomes you with arms wide open (outside the arena all these people from the Forex community are jolly good chaps) and you lose! Yes! You lose! Who’s or what’s to blame? You wonder.

Simple answer: You!


There are no:
  • bad moments;
  • bad feelings;
  • bad boys with deep pockets;
  • bad luck;
  • bad brokers;
  • bad pairs;
  • bad days;
  • bad news and fundamentals;
  • bad technical indicators.

Only you were bad, a bad trader of course! (Sorry for the roughness! But, you know… or at least you should know (!) Forex’s arena is a rough environment!)

Why? Well, let’s analyse this!
[list][/list]…
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Dear Traders,

first of all, I want to wish you a Happy New Year 2015, let’s make it successful together!

Last month, I wrote about my Bollinger Band Strategy for Trending Markets – the full article is here:

http://www.dukascopy.com/fxcomm/fx-article-contest/?My-Bollinger-Band-Strategy-For&action=read&id=2122

I want to thank community user garisan from Spain for asking a very good question about trade management due to the dynamic nature of the Bollinger Bands and promised him to explain it in more detail. This is what my second article is about.

The In-Trade-Management Strategies pointed out here, do not only apply to my mentioned strategy, but you can use them with modifications in your own trades. In this article, I will explain it with my Bollinger Band Strategy for Trending Markets. The trade entry is described in the previous article. At this point we entered the trade, placed our initial stops and targets and we are now in the trade.

First Example:

Let’s begin with the first illustration. I picked a 15 minute chart of EURUSD. We identified the uptrend, our middle band was hit and entered the trade with a long. We set our initial stop and initial target.


Our…
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Bollinger Bands is the second important indicator I use along with candlesticks. In fact, the combination of candlesticks and Bollinger Bands creates the strong trade setup I look for.There are some awesome features in the Bollinger Bands that can not be found in any other indicator. Before talking about the the way we can use Bollinger Bands, lets see what kind of indicator it is, and how it looks like. If you don’t have Bollinger Bands on your chart, please add them and let the settings to be the default settings which is 20, 0, 2.Bollinger Bands are consist of three lines: Bollinger Upper Band, Bollinger Lower Band and Bollinger Middle Band. Bollinger Middle Band is nothing but a simple moving average. Bollinger Upper and Lower Bands measure deviations. I can bring their formula here, but it will not have any usage for your trading. The only thing we should know is that they are so strong in locating the trends and reversals. Combining the candlesticks patterns with Bollinger Bands, creates a great trading system that shows the strongest continuation and reversal setups.

Note: In all the below examples, the Bollinger Band setting is the default setting which is 20 period and 2 …
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