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It is quite sure many traders follow the latest, daily or even hourly technical analyses, which can predict (with about 70-75% hit ratio) the prices in the near future. My purpose is in this two-piece article to show a theoretical outline the difficulties of the technical analyses, and illustrate them by an own analysis in the second part.
Efficient Market Theory
The most important principal: technical analyses only work in an idealized market. This idealized market is called Efficient Market, and the rules of this structure (which is not the real market) based on three axioms.

Axioms of the Efficient Market

  1. Market price is the only information
  2. The price does not break the trend
  3. Similar cases cause similar movement

Explanation of the Axioms

Market price is the only information
The current price reflects all the market information and news from the future as well as the past, even insider information. Practically it means that important events like rate-decisions, speeches or announcements do not influence the market and the current price. A recent example: the GBP’s market would not have made a 200-pip-gap in Monday opening because of the rumour of the Hard-Brexit, if it was an …
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zarina avatar
zarina 19 Feb.

очень интересно !

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Have you ever wondered if you can trade the same way as you can gamble in casino games? In theory, you can use gambling techniques in trading too, but with a few adjustments.
We can view trading as a simple up or down movement of the price, which can be compared to an occurrence of black and white in roulette. Imagine a standard casino roulette which has a 37 component wheel: 18 black, 18 red and 1 white. The white one has a 2.7% chance of happening which assures a loss the same way the trading costs are in trading. Statistically, if we bet continuously on only the black or red we will break even over a long horizon, less the 2.7% from the white slot. So the only way of changing the odds is by managing the money, meaning to vary the size of the bets. Some well known methods of gambling, like Martingales, are based on the probability of sequences occurring, the Theory of Runs. On each roulette spin, the likelihood of the same color reoccurring is 50%, ignoring the white slot. If we want to define a run of 3 reds, for example, we need to take a black on each side for a complete run, like this Black - Red - Red - Red - Black. Because we have a probability of 50% at each spin, the tot…
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rh6899 avatar
rh6899 20 July

in gambling there is a probability that we always get head and never see tails; for 600k ++ spins in slot i only meet once 5 wild in line(pay 1000x bet) and never meet 5 wild inline iside free spins (pay 3000x bet), and the nature in gambling is get worst is always breakout while we never meet simultaneously jackpot.

Ivory avatar
Ivory 23 July

Thanks for the feedback. The probability that you won't see one side in a coin toss on the long run is so small that won't happen. That is if we speak about a pure 50/50 chance of happening, you exemplify something else. With the slots the probabilities change.

WallStreet6 avatar

Very interesting approach! Have a question: Does the coin toss theory applied to FOREX means that if a currency pair appreciates then the probability of depreciation increases? This could lead to the impresion that it's better to trade against the trend- which usually is no good. Long term trends occur on the markets and they don't fit this thoery, I think.

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Sometimes love is elusive,the more we reject more we fell in love,the first years of our lives of traders while we are learning how difficult that is the world of forex,to us it seemed so easy at the beginning,we try to get that great love matches us,we lose our trading account trying to conquer it,In this case we don´t spend our money on chocolates, flowers or gifts,but we left our account of trading in bad positions committing the same mistakes over and over again.When we got to conquer our great love, for a few months is an idyllic love story our positions are in accordance with the trading system and our account begins to rise with a stable curve.Then appears on the scene who believe friend but it's really a great enemy... "the confidence",and invites us to get out of cups and then as usual our great love learns our unfaithfulness and will be on our side ,then confidence only us wanted to pass the time is going fast and we send to the most feared of our enemies..."the fear", and this comes without any compassion and in a single day, thanks to the trust, thank you to think you're the best trader in the world and that it is not possible for that mistake, you stab your trading acc…
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Teo avatar
Teo 24 Feb.

good one..

williamwoo avatar
williamwoo 25 Feb.


jezz avatar
jezz 25 Feb.

Copy paste doesn't work well and you have to re check the text, but uploading is evidently worse... I must admit I posted my article several times before he became 'normal'.

independeceday32 avatar

Thanks jezz , I guess that the first all fail, already have learned the lesson... first draft !! :))

anton_dang avatar
anton_dang 27 Feb.

nice one :)

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1. OverviewThere are a lot of theories in FOREX market. You can use various indicators, trade signals, copy others trades, etc. But in every such a case you will use some theory, which will be used by many others. Of course it is great job to choose relevant method and apply it during right conditions. But can you create your own theory? This question arises sooner or later after spending some years in FOREX market.2. Movements prediction method descriptionWhen creating theory for predictions some kind of statistical method could be used. I will assume that if some pair is in the middle of its highs and lows (lets assume analyzing only 10 past years) from statistical point of view it is unlikely that during coming 2-3 years such pair will break highs or lows. Of course it is from statistical point of view as in real world different matters could occur and ruin statistical predictions. But there is no 100% accurate predictions in any case.For this analysis monthly charts will be used.Further on from statistical point of view if we will take shorter period lets say 2 years and look at highs and lows for this period and if rate is somewhere in the middle again once again from statisti…
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marius24 avatar
marius24 21 Aug.

a new idea in this article..good job :)

rokasltu avatar
rokasltu 28 Aug.

First test of strategy had a result of >+150 pips, you can check it Next month I will trade in Trader contest using this strategy!

apsu avatar
apsu 28 Aug.

Good article!

amirjani007 avatar

good one



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Hello everyone. This is my first post so let me introduce myself first and I will outline the structure of my articles.I have been trading demo successfully for a while, then I decided to open a real account with my personal saving. Unfortunately, I lost all of my saving after a couple of weeks. Reasons for my loss are simple: I did not learn enough and I was too confident. I then came back to trade on the demo account however I take it more serious, read more books and did my homework, aka analysis, more carefully. It took me awhile to not losing in the FX market and now I am on my journey to seek for profits. I just knew about this contest a couple of months ago and I thought it was a great opportunity to share and learn. Therefore I signed up for this contest and I want to write about my own story to help you better understand the market and later on make profits for your self. I was thinking about the structure of my article and I decided to come up with this idea: I will divide my article into 3 parts. The first part of my article is for FX 101 in which I will explain basics of the Fx market, the mechanism of  the market and the relationship between FX and other markets. The r…
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HoangSaVC avatar

Very informative article! Nice work! Thanks for your post!

honamkts avatar
honamkts 9 Jan.

Thanks your post. it is very important

ritesh avatar
ritesh 20 Jan.

keep more coming dude...your rank chart shows accumulation ;)

LinnuxFX avatar
LinnuxFX 20 Jan.

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LinnuxFX avatar
LinnuxFX 25 Jan.

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