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Part 2

This is the second article in the series of two. In the first article I wrote about pyramiding and scaling in. If You didn't manage to read it click on the link Trade Management Techniques, Part 1 .

In this article I will cover:
  • Scaling in
  • Martingale and anti-martingale
  • Trailing stops
Scaling in ( averaging out )

This method should be used in trending market conditions, especially in swing trading. The idea here is to protect the largest part of the profit and expose to risk only the remaining part of a position. It is done by closing part of a position at predetermined price level. Usually half of the position is getting closed, but different percentage can be used to fit your strategy. It repeats once the next price level is reached until the stop loss is hit. Stop loss also has to be moved or trailed. It means that once the trend is over the most of the profits are safe and only the remaining position will result in loss. Obviously this is a good way to protect Your profits especially when the trend doesn't continue for too long, but if it does then we miss the opportunity to capitalize on a full position size. This is almost completely opposite to pyramid
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In the market map, Forex is an archipelago.

PROXIMITY CONSTANT

At a quick glance we can see that the islands are related by proximity. This is evident, for example, for the pairs that share a base currency: EURUSD, EURGBP... As a result, movement in one of the islands affect the movement of the adjacent: the move of EURSD affect to EURGBP, EURJPY...

This relationship is mathematically explicit by a simple equation:

EURUSD = x * EURGBP

Where x is something that explains the relationship between EURUSD and EURGBP; in this case x = GBPUSD

That is, the price of a pair can be deduced through the product of the proximate pairs. This algebraic equality can be expressed geometrically:


This equality is a constant that is deducted from the first axiom of the market: the no-arbitrage. Or, likewise: it’s impossible to obtain profitability without risk.

The above equality is what is known as a triangular position, but we can create all sorts of positions; for example, a square position:

EURJPY = EURGBP * GBPUSD * USDJPY

These algebraic equalities are much easier to see if we replace the name of the currency with a number:

EUR = 1
USD = 2
GBP = 3
JPY = 4

As a result of this replacem…
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Do you want to become filthy rich over night and earn six figures per day by simply taking your slice out of the daily $5,3 Triillion turnover in the fx-market? Just adopt "this holy grail bs system" and you will soon climb to the top of this years forbes list.
Sounds familiar? In the last few years a whole industrie has grown promissing the quick Sucess in trading the markets. Newbes fall often for theese "Piped Pipers of Hamelin" and eventually throw they money away twice by deploying worthless products on real $ accounts. Most give up out of frustration and the rest understand that this is not a get rich quick kind of business and it is just rewarding if you work hard and smart.

In business the first years are tough, slow to none growth stuggeling to break even no hollyday vacations 110% commitment just to survive the first few years. Many fail because their lack of commitment and stamina. Rougly 56% of businesses fail during the first 5 years what is still encouraging compared with trading failures which I estimate much higher.

The good thing is even if its hard it is still possible to be successfull in this business if you are following some key principles.

  • Focus your energy towards achieving your goal.
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volatility FX trading gamma
Posted on 15 Apr at 20:18 GMT by AdrianWS
Intro:

It is no surprise to anyone that the FX markets are dead right now... We are glad when the EUR moves 50 points these days. Gone are the days of the 300-500 point daily swings of 2011 - at least for the foreseeable future anyway. In a year such as this one so far, it is beyond critical to adapt our horizons in a realistic way.

This year has been so against consensus it is crazy. Going into the year, everyone was expecting the USDJPY to rally towards 110, the Nikkei to hugely outperform and Global rates to be rising, and fast. Yet none of these have happened. USDJPY is 4% lower, the Nikkei is a huge -11.15% down (in USD terms) and US 10's are 40bps lower. So it is fair to say that this year has been a tough one, one of the toughest in terms of alpha generation since 2008 in my opinion.

Here is JPM's FX volatility index.

As we can see it is very low, and still heading lower, and given the lack of any huge events its not a surprise.

In a previous article here I discussed how to use Volatility to aid in trading, and this article, while similar will focus on how we need to adapt to low vol environments, giving a few tips I've learnt from my times trading both high and low v…
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OOOPS this is daily support level
Oh price retraced from monthly support level
Aaah here comes the fib retracement
Ouch 89 days moving average approaching.
Market is oversold …………..

Why there are so many complexities, how much things to remember, isthere a simple way to trade and do the Market movers take into account all these level,

People usually think in round numbers are more comfortable to start or end a trade in round numbers, which will help them in easy calculations. This is general psychology of human beings. If some one were to ask you how much you spent on your computer, you’d likely respond with an amount rounded to the nearest hundred like $900, or $800. For simplicity, most people most of the time will automatically round to the nearest whole number.

And this happens in trading too.

Sowhen a large number of traders are trying to close their trade when the price reaches a round number, there will be a change in momentum of price. If the price is in uptrend and when more traders are trying to take their profit at a round number level, the price will cease to move up causing a change in direction.

The wholenumbers trading

Traders will oftencall…
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This is a series of 2 articles.

Part 1
Trade management or money management? Often times it is confusing. I would refer to money management when choosing how to treat all of capital available for trading. For instance, trader wants to increase his lot size per each trade only after the capital has increased by 20%. However we would talk about the trade management when trader decided to move his stop loss to break even as soon as the trade has moved certain amount of pips in his favor. These are just two simple examples to illustrate the difference between both.

By knowing the proper ways of how to implement trade management based on a specific strategy trader can improve his overall performance significantly. Trade management is used mainly for 3 reasons which are to protect capital, to increase profits and to improve entry and exit.
These two articles will cover following techniques:
  1. Pyramiding ( averaging in or averaging up )
  2. Scaling in ( averaging down )
  3. Scaling out ( averaging out )
  4. Trailing stops
  5. Martingale and anti-martingale
Each of these 5 techniques will be covered in detail including variations. You will also see how it looks on a chart and will find out …
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Welcome to the world of Binary Options !! I don't think any of you is unknown from binary options trading , but for those who are new to the market I'll brief you with it. . According to Investopedia, the defination of binary option is " A type of option in which the payoff is structured to be either a fixed amount of compensation if the option expires in the money, or nothing at all if the option expires out of the money. The success of a binary option is thus based on a yes/no proposition, hence “binary”. A binary option automatically exercises, meaning the option holder does not have the choice to buy or sell the underlying asset. " Blah Blah Blah . In simple words Binary Options is the form of Trading , in which you earn by predicting asset's direction of the trend either Up/Long or Down/short for the selected time period .


For example - You are damn sure that Better NFP figures can pull EUR/USD down after the release or if your technical indicators are suggesting to short the pair , you 'll decide to choose the option DOWN/PUT at say X price . Next step would be to select time period of the contract ( T ) or the expiry of the contract . In our case , by expiry of the c…
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Trading Success Displine Trade Rules
Posted on 10 Apr at 14:29 GMT by Tinktank
Hi,

I would like to share some trading tips I learned a long time ago when I started trading Forex. Many of us are familiar with the many 'secrets' to successful trading but how many of us actually employ these truths while trading? The problem is that many of these lessons seem like common sense so we tend not to appreciate them. We believe that there must be something more, some other esoteric tips that successful traders employ. After all, if everyone knows the real secrets that we often hear about, why isn't everyone successful?

The reason why majority of traders fail is because they don't understand the significance of these common tips. Although these tips sound like common sense, they have deeper meaning that few are able to grasp. I will be revealing some of their real significance in the coming weeks so we appreciate them better and utilize them.

1. Timing is Everything

You have probably heard that timing is everything but how does this translate to successful trading?

Let me show you.

The chart image shows a classic ascending wedge pattern with resistance points at A, B and C. Rising trend line support was tested at point D, E and F. Point G represents the breakou…
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Introduction

On 31 March 2014, Michael Lewis published his book Flash Boys which focused on high frequency trading. In this book he makes sensational claims that the financial markets are rigged in favor of High Frequency Traders, sending the whole system into a frenzy. Ever since High Frequency Trading has dominated financial news and United States Federal Bureau of Investigation (FBI) has since announced an investigation into High Frequency Trading on the possibility of front-running, market manipulation and insider trading. It is impossible to ignore such an activity that seems to tilt the playing field in favor of a select few and has had the whole world talking.

What is high frequency trading?

Definition
.

High Frequency Trading is a very powerful program that uses super-fast computers to transact a large number of orders and high speeds making use of very complex algorithms to analyze markets and execute orders based on market conditions. In much simpler terms, it is trading algorithms that trade on market inefficiencies. Some of the basic characteristic of the High Frequency Traders are as follows:
  • The time horizon for the trades is very short, typically milliseconds. They move in and out of the markets in a space of milliseconds hoping to capture a very small profit on the trade.
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Hello everyone today i would like to say one of the key points regard pamm services.i want to discuss on following topics
1.what is pamm?
2.how pamm helps the pamm manager?
3.how to attract the pamm investors?
4.how pamm helps pamm investor?
5.how to invest in safe pamm trader?
Let us discuss about each of the above in the following which might helps you.
1.what is pamm?
pamm mean percent allocation management module which is introduces in forex trading where investors can invest into the pamm traders based on agreed percentage of share between them.

2.how pamm helps the pamm manager?
if you are a good trader and you dont have enough money or else you want more capital you can thus make use of pamm manager services which are provided in pamm system where you will be putting your own limits of % share you want to give investors who invested in your account. pamm managing is really like a gift for those who wnat to grow their income more by attracting investors with their results of trading.
How to attract investors?
attracting investors is not so easy first of all you need to show consistent profits and also with less drawdown,later on you need to advertise your pamm link in online…
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Disclaimer

Dear Dukascopy Community member, before you start reading please take into account that the following article was written for the sole purpose of cheering up and it's my own personal interpretation of Forex candlestick patterns. Please, keep in mind that
I drew every single image you'll see on this article and can provide proof of it. Last but not least, if you feel too "Pro" to read the
article please don't make any comments as this article is not intended to teach anyone about forex.

Introduction

This is the second article regarding this subject, in order to fully understand the concepts please read Forex Basics through a Dummy's Eyes.

Single Candlestick Patterns through a Dummy's Eyes

So again we meet, today we will learn all there is to know about candlestick patterns, we'll go slowly and we'll start from easiest one
to spot: the single candlestick patterns.

  1. Step One: Read the introduction and follow the link if you haven't read the
    first article, if you're too lazy just take a look at the drawings.
  2. Step Two: Have you heard about Doji? Harami?
  3. Step Three: If you said that you had some Harami for dinner last week, then
    go to step four. Otherwise go to your local japanese restaurant and ask
    for some Harami with Doji sauce.
  4. Step Four: Sit tight, you're ready for today's lesson.
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I don’t want to offend dear fellow chartists but in my opinion technical analysis
has little value if it has any. For these guys interest rate decisions, unemployment data,
trade deficits...has little meaning compared to the study of charts. Most of you are
familiar with the jargon; test of lows, breaking key resistance levels,
new target levels, intermediate term down trends, trend channels etc. In
my opinion it is impossible toprove technical analysis wrong. For example I see
a triangle on the EUR/USD chart, it is going up for sure, then what? it
crashes! Of course I didn’t notice the head and shoulder formation and
didn’t take RSI and MACD into consideration! it was obvious. Do you see
what I mean, it is nonsense because many technical indicators may
contradict each other at any given time. Technical analysis can never be
wrong, but an analyst can be. There is always an explanation for a price
move from the perspective of Technical Analysis.

Secondly there is no universally accepted methodology telling you where to use
which indicator. Five different analysts can look at the same chart and
make contradicting predictions and all of them successfully support their predictions
w…
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Forex for Beginners!
Ranking 10/31
Welcome to Forex!
Posted on 7 Apr at 18:04 GMT by Convallium
Forex forbeginners!

Idiscovered Forex two months ago.I had manyquestions and I had to spend a lot of time to find answers on these questions.
I knowthere are many beginners on this site wholike me do not know many useful information about Dukascopy and
Forex.Therefore,I decided to write this article to explain for freshmen basic
things about
Forex. I want to speak about-

-What youshould know about Forex?

- How tostart trade?-

What pairs the best for beginners?-

To be ornot to be?

Only these several questionswere important for me two months ago.
In addition, when I have found the answersto these questions I started my trading.That is why I have written this
article.
If you are beginner you should not to search alot of information in internet, and you must not to waste your time to ask
other traders
about Forex, I have made it for you and me! NowI will share with you what I have found out about Forex.

What youshould know about Forex?

Forex it is a big net market, every day it hasturnover about 3 trillion dollars and it is always develop. Forex can
brings you a lot of opportunities and money if you will join to this
amazing world of trading !However,you should know the…
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INTRODUCTION:

In forex,there are plenty of ways to do trading,and would be impossible to name them all here,but we can,broadly, define two basic ways to do trading,the first would do trading basing our strategy on technical indicators and the second would be to base our esstrategy on price action.

It is common in retail trading,especially among beginners,that trading strategies is based on technical indicators;trading strategies based only on price action are usually used by traders with more experienced in the market.

In this article I will explain how work in forex both ways of trading,obviously the article willbe based on my experience and knowledge that I have gained over the years about forex market,doesn't have to be the right,and I would like this article serve that each one expose his experience and the reasons because you prefer one or other way to do trading.

TECHNICAL INDICATORS:

It is common when we started to do trading in forex that we think that the secret of success will be at the indicators and we seek the perfect indicator,that never fail.Always when we do a visual backtesting can be seen perfectly in the chart,with static price,that the indicator, that we…
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Fibo Time trader’s toolbox Fibonacci
Posted on 6 Apr at 21:06 GMT by Skif
Fibonacci numbers

In this article I would like to share such tool As Fibonacci Time periods. In my opinion,this analysis tool,unfairly deprived of attention.
More information is sufficiently small, I hope this article will be informative and useful.

The magic time of Fibonacci numbers

______________________________________________________________________________________________

Using this tool we can we can find:

1. Length of the future movement

2. Begining and the end of the correction

3. Time “windows” of possible reverse


And also the use of the meted in Currency movements.In addition, if we use Fibonacci retracements, we’re getting the instrument which help us to have clear understanding of what’s happening on the market.
The method itself is very simple, as we can say - we can write the whole method on the other site of the postal stamp.

The levels we use:

0 , 38.2 , 61.8 , 100 , 1.382 , 1.50 , 1.618 , 200 , 2.382 , 2.618

I’m sure that there’s nothing new to you all, as we can see the same levels, while using Fibo Retracements.Use the minimums and maximums established markets.
Usual Fibonacci used to determine t…
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