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6/43
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Introduction
Dear traders! The average book or even trading signals from various sites about trading is pretty useless, with a focus mainly on the choice of the point and time of entry, and as a result, all readers will lose money using its advices. Of course, there are books that are on par with the usual nonsense get to a much more important topic of mathematical expectation. However, most of these books again wrongly portrayed this aspect. Either they underestimate its importance, making them look like the already mentioned books. But more often, they even taught entirely wrong to look at the expectation of profits, forcing you to do one more step in the wrong direction, giving its readers the confidence and at the same time forcing them to lose money because of the financial short-sightedness. In this article, I'll try to fix this problem once and for all.
A proverb says: "Losers are focused on their lucrative positions, and the winners are focused on winning." The same item can be viewed in different ways: if we change the point and time of entry, they are important, and if you use a permanent approach to the addition of profitable positions, the point and time of entry almos…
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Viktoria_Kapitonova avatar

WOW! молодец! хорошо сделано!

Golda avatar
Golda 29 Oct.

Мне тоже нравиться, отлично

piter44 avatar
piter44 30 Oct.

+1

SalviLeana avatar

Good job !

Manoj89 avatar
Manoj89 21 Apr.

Interesting

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30/58
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To be successful in trading means to achieve state of consistency. I won Dukascopy contest prizes three times in the past but I found it very hard to keep myself at the consistent prize winning list unless to improve my edge and skills in order to reach to the stage of consistency. So the main question will be how one can be consistently successful? There are four edges in forex:
  • Technical analysis edge
  • Fundamental analysis edge
  • Risk management
  • Psychology
The last two items of the above list matters almost over 80 percent of the trading result. We know that researchers stated that experts in financial analysis are not often good traders. They can predict the market quite accurate but never had emotionally fit for entering and exiting the trade. One can be very good for the technical analysis, defining the exact entry and exit points but if psychology is not prepared then again often cut the profit and run the losses. We can also see that the winner of the Trading Contest often wiped out his entire amount in the very first week when next context starts, it reveals lack of psychology and therefore one not able to keep his consistency.
In order to be consistently successful, trader…
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7/34
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Do you have a winning strategy? How many times have you traded it? If so what is the acurracy ratings? % wins % loss? How long are your losing streaks? Do you use a money management rules? Are you sure you are maximizing risk/reward potential?This article is about loses. knowing how much loses a strategy makes, it give the trader and edge on the psychologicl side of trading. Lets have a little simulation. Suppose that you have a winning strategy, traded 100 times in a year. And its accuracy ratings are 80% win and 20 % in loses. that gives you 80 trades in profit and 20 trades in loses.If that is the case, if you are to continue trading that strategy on the next 100 trades or 1 year , is there a probability of loosing 20 trades in a row, over the next 100 trades to be taken? . We need to learn probabilities and try to compute our probabilities of lossing streaks, and it look something like this.source: www.probabilitiesfordummies.comTo save us from brains injuries lets use a calculator instead. First lets review our given questions and answer them 1 by 1 based on our simulations. 1. Do you have a winning strategy? Yes.2. How many times have you traded it? 100 trades per year3. If s…
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jetaro avatar
jetaro 14 Aug.

youve got it right Likerty. One of the basics in trading , indespensable or one of the important foundation in trading. Sometimes traders get overwhelmed in technical analysis they forgot what they really need in thier trading career.

sofie avatar
sofie 16 Aug.

why me canoot like? can translate in tagalog jet? i canot understand very

jetaro avatar
jetaro 16 Aug.

have you tried google translate sofie?( subukan mo google translate )

Haynes6EU avatar
Haynes6EU 28 Aug.

Good article1

VTTG avatar
VTTG 30 Aug.

It's interesting and good

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2/47
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Premise:Lets consider to start with, that we are given $500. We are given the option to trade and we have a 99.9% chance to gains $1, but at the same time we have a probability of 0.1% that we lose all $500. This trade seems like a no-brainer and lets be honest most rational humans would take this trade, now why is this, and why does this cause problems? Well you would not be wrong in terms of probabilistic returns that this trade would work well, if we were to trade 1,000 during the year the maths would suggest that we win 999 times and lose once. This equates to a $999 gross profit and $500 loss. This leads to a net profit of $499 - 99.8% profit. Because of this very simple maths, we would take this trade no questions asked after all there is a 0.1% to lose. The problem occurs that humans are greedy, and while famously stated that "greed is good" it can also cloud our judgement. Why is this? well once we make a trade, we consider another scenario with the same parameters $1 gain with a probability of 99.9% etc, and of course we take this once again. This goes on and on... all the way until one almost assumes that there is no risk and that we have a 100% chance of success.This of …
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AdrianWS avatar
AdrianWS 16 July

@jetaro this is absolutely true, all numbers in forex. However use of RSI, stochs, MA's candles etc can push the probability marginally in your favour i.e. 55/45 or 60/40 and this is what is key - I use a derivative of this idea but of course I combine Technical analysis to it and not just simply maths. But I know physicists and mathematicians that have no economically/trading experience that trade on methods like this and it does work.

Sergei2 avatar
Sergei2 16 July

Don't get me wrong, I really think your idea is bright and it has a big potential! Basically, we're using well known fact, that a probability of a tiny movement (i.e. 2p.) are disproportionately high regarding the probability of ultra-large movement (600 p.). If not for spread, this alone would be profitable tactic (with the premise, that a lose occurs in less then 1.5 year).. I'll continue to think about this method, thanks :)

Sergei2 avatar
Sergei2 16 July

Ok, I double-checked my backtesting results (in MT4 with 90%) and immediately have found an error (actual candle would not gave the result that is shown in Results tab), so all this 9 losses probably was just my noob mistake all alone, sorry for that lol

xtrader360 avatar
xtrader360 16 July

Excellent job!!!

Victor avatar
Victor 17 July

very nicely written (black/white swan) but as you already mentioned it comes with assumption. But I thik it is worth attempting

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17/43
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1. Some thought about probability and the impact of free informationThe exact time of an extreme event, like e.g. a market crash or the apocalypse, cannot be foreseen. This is due to the fact that such events occur randomly. Statistical inference allows testing some hypothesis about data with random properties – like e.g. the apocalypse will be on the 21th December 2012 (null hypothesis). But even when the data fulfills all criteria for doing inference, it never tells us if it is a valid sample of the object of interest or not.If we use for example a 95% confidence interval, we always face the risk of getting inaccurate results on 5% of all samples. And inaccurate simply means that the confidence interval does not cover the true parameter. Hence, even when the searched value is in between the calculated level C confidence interval, we do not know the exact value of the searched parameter. This is, using random data, impossible. In a nutshell, there might be an apocalypse one day. But the due date will not be the 21th December 2012. There is a higher probability that you win millions with gambling in the casino – and you may be one of the lucky guys who know that the probability of …
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Nicco avatar
Nicco 17 Dec.

Very interesting...but, one may suppose that professional traders are persons with an IQ higher than a mean citizen, I know someone with phD in mathematics who is broker in Chicago, and many smart mathematicians are involved in many financial activities. Of course, these smart mathematiciens (and economists) are responsables with the beginning of actual crisis. I don't believe that a professional trader can consider this foullish thinking about December 21. But, you're right, the smart traders are speculators, not angels, and can initiate something like panics to scalp the nonsmart ones...

Deta avatar
Deta 18 Dec.

Richard Olsen, beautiful person. I didn't know about the book, thank you for sharing.

Deta avatar
Deta 18 Dec.

about the booklet sorry...

SpecialFX avatar
SpecialFX 18 Dec.

I would just like to add one thing regarding this end of the world madness, the Mayans never predicted anything regarding the end of the world, that is just the absurd interpretation that some people have made. Imagine you have a car that has reached 999.999km, if you drive one more km, it will show 000.000, simply because it only has 6 digits, so in order to continue adding kms it goes back to zero. Same thing with the Mayan calendar. Everything else is just insanity :) Wasnt the world supposed to have ended in the year 2000 anyway? ;) I predict that there will be another prediction soon

Nicco avatar
Nicco 19 Dec.

Man kind have many obsessions and one of them is the obsession of round numbers. And everytime man prove a great stupidity: one who can split the atom or a nuclear particle may believe he can forecast the apocalipse, or a lot of strange paranormal things. But he can't forecast the next EUR/USD price...

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12/100
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Hello again, as has been customary in my previous articles I try not to make them very professional, but I try to convey the main information in a way easily understandable by all.My article for this month is about the BASICS that new traders always forget, and try always be an expert when they even do not know what FOREX is...I'll start with a little story that may be about any one of us, here in DFC:As a boy when i played football, my goal was to be the best forward I could be. Then I realized I could not throw, so, I thought I would be a great goalkeeper. After realizing that I could not tackle any better than I could throw. My friends, offered me the best advice for which I could have hoped:"Stop trying to be a specialist, and first be a good football player" As an adult I learned this lesson all over again, and now i think it could be applied to forex trading too: "Stop trying to be a specialist, and just be a disciplined trader first"Since I came to forex trading and through my experience interacting with other traders, I have always been confronted with these three key elements, that make up the formula to be a disciplined trader:PROBABILITYRISKLEVERAGEAll too frequently, br…
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pistek avatar
pistek 21 Dec.

very nice and good presentation......gl4you +1

Bideira avatar
Bideira 21 Dec.

Good Article, keep up the good work Linnux!! And great presentation

ritesh avatar
ritesh 22 Dec.

Wishing you a very happy and prosperous New Year. +1

LinnuxFX avatar
LinnuxFX 23 Dec.

Merry Christmas, with a lot of GREEN PIPS...

AdrianWS avatar
AdrianWS 26 Dec.

great article, happy christmas and good trading +1

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22/100
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by changing only one approach in your trading you can increase your profitability massively! one trading action that typically destroys a lot of accounts can make a fortune if the timing and the situation in which you do it are different! i will explain in this article how to turn a missbehaviour into a massive profit generator! 
we all know that a reasonable and professional trader plans his trade and then trades the plan. like this he does not have to face any surprises on the road after opening a trade. all is well calculated like we have discussed it in segments 1 and 2 of this article series. if we use these guidlines for a reasonable risk- and money management, we know that nothing severe can happen to our account and balance!
following the basic guidelines means that we, the traders, keep control over our trades and over our MONEY!
if we have control over our loss, by pre-defining the max-loss per trade as for example with  1% of the balance, there is no need for wet palms or adrenaline driven emotional roller coasters in front of the computer screen which in 99,9% of the cases will force you to make mistakes, essential mistakes.
i mean that kind of REAL MONEY BURNING and  A…
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skytrader avatar
skytrader 18 Dec.

well doctor the concept of partial profits, i dont know if i think this is the right way to trade or to optimize profitability! in fact i would prefer being able to close partial LOSSES! my experience shows me, when i have a winner i add up volume at every retracement! because already winning i have a chance to make HUGE PROFITS while adding up volume... realizing partial wins does not help me to achieve that goal! after a trade runs in my direction i trail thr SL as soon as possible to breakeven and i prefer to win FULLY LOADED + ADDED VOLUME then taking small profits!

ikhall avatar
ikhall 19 Dec.

love adding on at the retracements points. Its a part of my central strategy and has been for a long time. Noice article!

AdrianWS avatar
AdrianWS 22 Dec.

Definitely the best of your 3

macdak66 avatar
macdak66 26 Dec.

And so. Deposit loss occurs in the absence of strategy or trade system. At the analysis only one period of time. To trade without stop.Thanks !

skytrader avatar

thanx to all of you guys for your support..! i wish all of you a successful 2012.. stay healthy! i hope that i could provide at least to some of you some basic hep with my articles... be careful when you trade real money...! ROCK ON GUYS!

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20/100
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and a computer your exits... because both are not biased by any emotional distortion or market noise. with the right money management and SL and TP settings it is not important why, how and when you enter a trade. it is not even important in which direction you open the trade!  the only success parameters that count on the long run are the relation between your potential loss and your potential profit.: 
lets call it the RISK/REWARD-RATIO or SL / TP-RATIO.
without using any analysis method every time you open a trade, you have a 50% chance that the trade goes in your direction! it may be the case that in 10 trades it goes 8 or 9 times in your direction, or against you... but in 1.000 trades you will have roundabout 500 winners and 500 losers. you can compare that to throwing a coin. the more often you throw a coin the more you can be sure, that the mathematical pobabilitiy will show up and confirm the 50% chance for each side of the coin or each direction of a trade..
knowing this, all you have to do ist to choose a SL / TP-RATIO of 1:2. for example 20 pips SL and 40 pips TP. if you now win every 2nd trade (50%), you will automatically make profits!                        (image ki…
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mortyl avatar
mortyl 22 Dec.

basic but useful

skytrader avatar

all of you guys for your support..! i wish all of you a successful 2012.. stay healthy! i hope that i could provide at least to some of you some basic hep with my articles... be careful when you trade real money...! ROCK ON GUYS!

research_trading avatar

Dear Skytrader, this is a really good article, I would be appreciated if you could send me a copy of your spreadsheet. Many thanks!

plinakos avatar
plinakos 26 Mar.

Nice article but my concern is that does not provide a method of picking up the stop loss pips amount or target. Arbitrary choosing those it may result in disaster, since the SL could be hitten continuously if within volatility or standard deviation limits whilst TP is out of these limits!
Another one concern is... see below...

plinakos avatar
plinakos 26 Mar.

P. 2/2 comment
In addition, I think that the outcome can not simulate the dice probability  since we do not have only 2 outcomes but 4, up, down, up by specific amount, so to reach TP,  down by specific amount so not to reach SL or vice versa. Also the choices are not only 2 but 4, not take or take the trade, long or  short!

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