Forex Day Trading Why you should not do it

When I started trading forex, one of the first things I was introduced to was day trading. As you know, day trading is the art of opening up positions that last for less than a day and end up with a profit. The reason I write this article is to talk to you about some of the myths, misconceptions and truths surrounding day trading and finally, why day trading is not a positive way to start for a forex newbie.

First I would like to address some of the myths that revolve around day trading.

Day trading is not profitable because intraday market movements are random and chaotic - This is an absolute myth. It evolved because intraday movements seem random and chaotic, which does not mean they are. The thing is that movements that occur within smaller timeframes seem more volatile (hence chaotic) than movements that occur in larger timeframes which seem to adapt better to fundamental analysis. But, you can always see in smaller timeframes (60 min vs 1 day) what you see in bigger ones, you see trends, retracements, etc.

It is impossible for your wins to overcome your losses in day trading - This is absolutely false, it is very possible to win most of the time in day trading. Obviously this depends on your actual strategy and the way you face the market and control yourself.


Now I will tell you some of the truths behind day trading

Day trading is the strategy that benefits brokers the most - This is true and it is one of the reasons why it is one of the most taught strategies (brokers sponsor most classes, right ?). The main reason is that people that trade intraday open and close many trades, which benefits brokers by the spread. The other reason is that day traders often use a tight stoploss criteria which makes them vulnerable to stoploss hunting by the brokers.

Day trading involves a higher risk of loss - This is actually true as the market tends to oscillate more in smaller time frames. This means that it is easier for the market to reach your stoploss also means that you need to risk more lots or increase your leverage to get the profit you would get in higher time frames.

Day trading is harder - It is actually much harder. It is not very hard to see trends, retracements and price patterns on the daily chart but this seems much more obscure on the lower time frames. The reason why many traders tend to day trade is purely emotional. Trading in larger time frames involves a much larger probability trade but with a possibly larger open draw down risk due to temporary market movements.

As you can see from the arguments I just exposed, it is quiet obvious that although day trading may be a profitable strategy for very experienced traders it is NOT a good starting point for the forex newbie. This does not mean that you ignore smaller time frames remember that all charts show you the same data in a different arrangement. Smaller time frames are still absolutely necessary to find entry and exit points for trades that would involve a larger time frame.

For example, if you see that there is a downtrend in GBP/USD in the daily chart you do not enter based on this chart. You go to the one hour or four hours chart and wait for a retracement there to enter the trade.

In fact, almost every experienced trader will agree with me in that middle term trading is the best way to make money for the forex newbie. It is much easier and the probabilities are higher. The only problem is that newbies have a huge problem with market oscillations as they dont fully understand them. They hate having a wider stoploss and waiting four days or two weeks for a trade to finish.

If you are interested in middle term trading you should practice in a demo account to get used and see what normal market oscillations are.

Please comment if you feel this post missed something (or if you liked it !) !

Starting a New Project The Free FXReviews Ebook

If you have been a regular visitor of my website during the past 8-10 months, you will know I have been updating my blog daily for most of this time. There were several reasons why I decided to do this, mainly because I wanted to increase my ability to write creative content and because I wanted to create a loyal based of readers who would always find new articles everyday. I think I have achieved both of these goals in the sense that it is now much easier for me to come up with new posts for the blog and my website is registering a very good 30-40% of returning visitors, some of which I think read my blog on a regular basis (thank you for stopping by ! :o)). Now I feel it is time to take this "daily writing" and all the generated content to the "next level", so to speak. On todays post I will talk to you about a new project I will be starting dealing with all this content that and a new, free ebook that will come out as a result :o).

I have noticed during the past 6 months that most of the articles I write are not read a lot and most of them end up as part of my archives, being accessed only sporadically once or twice every month. Most of the people who find my blog through google end up in articles dealing with backtesting, renko charts, tick charts, Watukushay experts, Ayotl and mainly, in articles dealing with Commercial EA reviews. I feel that this is a waste of content since I believe some of my best contributions are actually the articles that are less-found through search engines.

How to fix this issue ? Some of you have suggested that my navigation system is pretty bad and that I should change it to a more "category sorted", "user friendly" way of finding my different posts and articles. You are absolutely right in this sense but the truth is that I am bound by the limitations of the blogger platform which does not allow me to input posts categories and generate menus with as much freedom as I would like. Of course, changing websites might be a solution for this (changing to a more powerful platform like wordpress) but the fact is that I would lose search engine placement and important links which make this move probably not so good for the blog right now.

After reading some websites dealing with content organization and how to make old, unvisited, yet extremely relevant content surface, I decided that the most productive and so the best way to get my content out there would be to organize it in a free ebook. So what I will be doing right now is pretty simple, I will be taking many of my blog posts and I will edit them so that they can be "stitched together" in an ebook. This ebook will become available totally for free and it will become - hopefully - a vital piece of information for new traders who are looking into becoming long term profitable traders using automated trading systems. The ebook will deal with many issues I have discussed within posts like doing backtests, simulation reliability, backtesting pitfalls, scalping systems, martingale systems, surviving draw down periods, EA design, etc.

Does this make the current ebook irrelevant ? Of course not ! The current ebook contains a lot of content which has never been published on the blog and it is bound to stay as the guide it has always been for people new to automated trading. What I seek with the new free ebook is to organize the blogs content and make it easily accessible for people who will not easily get to all those archived articles. It will be more of a "blog summary" which I think will prove absolutely useful for many people out there. Right now I am aiming for a 30-50 page ebook but the final length will depend on how much content I take from the blog and how much space it takes after editing it to fit a more "ebook feel".

Certainly the current ebook will have some changes (sorry, I know it hasnt been updated for a while !) which I will discuss on tomorrows post. I will be working on a very important remake and content addition in July and other similar changes and I am definitely thinking about offering it only within Asirikuy as for me everything is kind of bundled now and I fear that people buying only the ebook are not getting "the whole picture". Again, I will explain all of this in much more detail on tomorrows post :o).

If you have any suggestions or opinion about this new free ebook project dealing with the blogs contents please leave a comment. Is there any post you would like to see on the ebook ? Do you think the idea is good/bad ? Which posts do you think would be very useful if you were a new trader ? Which posts did you find particularly interesting ? Please leave a comment :o).

If you would like to learn more about automated trading and how you too can learn to design your own trading systems based on sound trading tactics please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

Mental Accounting

Suppose you are going to a movie and as you enter the cinema, you discover that you have lost your movie ticket you’ve just paid RM10 for. Would you spend another RM10 to get a new one? If you are like most people, you would probably think twice because you will feel that you will end up paying RM20 for a movie actually worth RM10!

Now let’s construct the scenario differently. You are going to see a movie. On your way to the movie theatre you drop a RM10 note on the bus. You are disappointed, of course, but would this affect your decision to buy the movie ticket? You will probably say to yourself: “Damn it! That’s my luck!” Arriving at the cinema, you will forget about the incident and stand in line to get a movie ticket.

In fact, the above research was conducted by some psychologists who discovered that only 46 percent of those who lost a ticket were willing to buy a replacement ticket, whereas 88 percent of those who lost an equivalent amount of cash were willing to buy a ticket. Since the lost ticket and the lost cash had the same value, their loss should have been experienced in the same way, but why were there twice as many people willing to ignore the lost cash but not the lost ticket? Why is it that you feel more pain in losing the movie ticket than the ten-dollar note?

This is due to a psychological phenomenon proposed by the famous psychologist, Richard Thaler, known as mental accounting. It says that people tend to separate and categorise income and expenses into different accounts in their heads. For example, you might have an entertainment fund, an investment fund, an education fund for children and so on.

Losing a movie ticket and having to buy a second one takes RM20 out of your entertainment fund when you planned to take only RM10, so it’s “out of my budget”!

Many of us commit this mental mistake in our daily lives without realising it. For example, we treat the company bonuses, capital gains from selling stocks, dividends and tax refunds as a “windfall” source other than our normal source of income. We splurge on luxury items such as LV bags, Caribbean Cruise and Rolex watches with this “windfall” money in spite of having a housing loan and a car loan due for payments.

Somehow we have grouped our income and expenditure into separate mental “funds” or “budgets” that are not easily combined. Money received as part of our salary is treated differently from money received as a bonus. Similarly, money spent to buy a fixed asset is viewed differently from the same amount of money spent to treat ourselves to a dinner at a luxury restaurant.

From an economic perspective, these mental accounting rules violate the economic principle of “fungibility”, which means that all money is equal. A dollar is still a dollar whether you get it as a gift from a friend or from your salary. Hence, when the principle of fungibility is violated, people act in economically irrational ways.

Stock investors often apply mental accounting when making investment decisions. We have the tendency to treat capital gains as windfall money and indulge in luxury goods with the profits. Imagine how much money we can accumulate if we simply reinvest the money into various forms of investment and let our money grow for us.

Free Expert Advisor Portfolio 2 Week 4 Profits are In !

Last week I was very disappointed with the performance of both of my free expert advisor portfolios with both of them reporting loses. I apologize for not making two separate posts - one for each portfolio - as I was busy with new years eve, etc.

The first month has ended for the second expert advisor portfolio. The debuting experts being Ichimoku5, Moneymaker, ADXCrossTrader and UniversalMACross. The rest of the settings are available in earlier posts about this portfolio.

The credit goes primarily to Ichimoku5 and Moneymaker both contributing almost every trade. The UniversalMACross has done one trade, which took profit and the ADXCrossTrader has done almost 10 trades with most of them going out at breakeven and one of them taking a loss.

I was happily surprised when I saw that this portfolio has recovered all of its draw down and is now hovering above a 10% profit. With a maximal draw down of 25% it is still not as bad as the first portfolio which has managed to get to a 40% maximal draw down (although it is in profit right now).

Personally I did not think that this expert portfolio would last this much, and much less, with a profit. I thought the experts would wipe out the account in a matter of days or maybe two weeks at best. I am glad to now know this not to be true. I am pleased to know that there may be a hope that combinations of free expert advisors might work.

We end a first month in profit, the statement, as always, can be viewed here.

Revieweing Thrust VPS a New Cheap and Reliable Option for EA Hosting

The subject of Virtual Private server hosting is a very sensitive one that affects all traders who want to use automated trading systems. Although it is possible to build a "home VPS" by setting up a raid backup server, a secondary internet connection and a large UPS this is not practical for most people and renting the service from a provider located within a data center seems like the best idea. Amongst the realms of shared VPS servers - where a single computer is shared as a host between different servers - Thrust VPS comes out as a new, fresh and reliable service that can be used by forex traders to host their metatrader 4 platforms.

There are several problems that usually happen with Virtual Private Servers that make people very reluctant to use one or another service provider. The most common complaint of traders about their VPS servers are unscheduled reboots (usually done for updates) problems accessing their platform through remote desktop and the lack of responsiveness of some support teams. I would have to say that many of these problems occur from time to time will all VPS providers and unless you are using a dedicated VPS (which is bound to be much more expensive) then you will have to deal with this if you want to have a VPS. (note however that using auto-login solutions and adequate security settings removes about 99% of these problems).

A few weeks ago I decided to try a new VPS solution in the market -called ThrustVPS - after hearing some good comments from fellow traders about their reliability, the speed of their servers and the great price. This company offers simple Windows 2008 VPS setups from 14.95 USD a month with 1GB of RAM, 30GB of disk space and 1TB of bandwidth each month. Compared to other VPS providers the amount of RAM is good but the amount of disk space and bandwidth seems rather limited, although much more than adequate for the needs of a regular metatrader 4 user.
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The payment process, setup and initial configuration of the server was quite easy and fast with everything ready within almost less than 1 business day. The server response is fast and the lag towards IBFX, FXDD and Alpari UK servers is low (5-10 ms) (of course, since the server is located in the US the lag towards Alpari UK is higher). The amount of RAM promised is available for use and the load on the VPSs processor seems to be very low at almost all times. Up until now I have not experienced any reboots or any other unusual behavior that may intervene with the Metatrader 4 platforms I have loaded within it.

However you should bear in mind that ThrustVPS is a young company and VPS providers are generally very good in the beginning before they start to get a lot of customers and start to behave in a greedy way. As a company grows and more clients appear they may resort to piling up more VPS on a single computer instead of buying more hardware something that reflects in an overall reduction in performance for some users. Definitely in the beginning almost all VPS providers are this good but time will tell if they are going to keep this level of performance or if they will just start to fill their current computers with more and more VPS servers without any hardware upgrades.

However right now ThrustVPS seems like a very reliable, cheap and fresh option for people looking for a new hosting provider for their Metatrader 4 platforms. This VPS company provides us with a cheap basic VPS plan with enough RAM and disk space to load several Metatrader 4 platforms with a very fast internet connection and a reduced lag to US forex brokers. As always I advice you setup adequate security measures and an auto-login solution which are absolutely necessary for reliable trading within a VPS. Hopefully ThrustVPS will remain this reliable for years but - as I said before - we wont know this for sure until the company starts receiving more customers.

If you would like to learn more about how you can build your own trading systems to run on a VPS based on sound trading tactics with realistic risk and profit targets please consider joining Asirikuy.com, a website filled with educational videos, trading systems, development and a sound, honest and transparent approach automated trading in general . I hope you enjoyed this article ! :o)

Get Organised With An Investment Form

Last week I mentioned about the importance of reading the analyst reports, however, just sitting down with a pile of financial statements isnt a very efficient or effective way of determining whether or not a company is a good investment decision. Youve got to organize your thoughts - otherwise youre just going to be spinning your wheels. Thats why creating your own investment analysis form can be one of the most valuable investment tools in your arsenal. An investment analysis form is a tool that you can use to help gather numbers and essential information needed to make an investment decision in one easy-to-use format.

An investment analysis form allows you to better interpret your data systematically, as all of the information is collected into a standardized format. Because information is plugged in uniformly, youre guaranteed not to miss anything that you have deemed important.

Moreover, an investment analysis form also allows an investor to simplify his or her research by only looking at information that is relevant to the investment decision.

The first step of creating an analysis form is to decide what you want to include in it. For example, you may want to include the PRINCED rule as your stock investment criteria, together with the 52-wk high/low, and some technical indicators information.

Once youre all set up with a form of your own, youll probably find that collecting your thoughts is a lot easier than it used to be. It just simplifies the process of investment analysis.

What I like about the investment analysis form is that when youre trying to browse through the various companies in the analyst reports, your mind stays active while you jot down the key figures. This helps you to analyse your investment better. Just dont forget that an investment analysis form is just an aide. It wont tell you whether a particular stock is a smart investment, but it can help you organize your thoughts and data so that you can make an informed decision yourself based on facts and figures.




Happy investing,

Pauline Yong

Five Automated Trading Myths Clearing Up Some General Misconceptions

In general I feel a little bit sad when I read every new expert advisor website because I know from experience that most of the things they say about automated trading are simply lies. I think that people believe these sellers due to their desire to find an easy and quick way to build riches but in the end when doing so they only achieve further frustration and financial loss. I feel that after having some years of experience with automated trading - particularly with the metatrader platform - I can now point out some of the "general myths" surrounding automated trading systems (both good and bad) and what I have found out to be the truth behind them and the actual reality behind all the hype or misinformation.

Within the next few paragraphs I will talk to you about what I consider to be the most prominent five myths that have surfaced in automated trading, what is true about them and what is totally false. I will do my best to be bluntly honest in the hopes that my efforts will help those of you who are looking for answers realize what the actual reality behind automated trading - from someone who works at it full time - actually is. So get ready and keep on reading to see what this five BIG automated trading myths actually are.

Myth One. You can be profitable with automated trading even if you dont know anything about forex trading. This is a very common thing EA sellers say and it is the main reason why most people approach automated trading. You feel you dont have enough time or knowledge and you want to trade like a pro so you simply load the EA and it will make you rich ? right ? The truth is that it wont because understanding what the system does is vital for your success. If you dont know the system how will you know if it has become too risky ? How will you know if it uses a sound trading strategy ? How will you know that it is likely to work for the next 10 years and not the next 10 days only ?

Myth Two. There is no emotion in automated trading. This is absolutely false since YOU are deciding if the trading system runs or gets stopped, as a matter of fact automated trading is FILLED with emotions because you are a human and you are making the decision of whether or not to run the strategy. When the strategy goes into draw down you will have emotions of fear and when it goes into profit you will experience greed. There IS A LOT of emotions and psychology in automated trading and ignoring that is a sure path towards failure. Learning to understand these emotions and dealing with draw down and profit periods rationally through analysis and understanding of systems is therefore VITAL for success.

Myth Three. Automated trading systems always stop working as the market changes. This is one of the most common myths amongst those people who have had some experience with automated trading systems and saw that they made some profit and then went into draw down. This myth is in fact a consequence of a general lack of understanding about trading systems and the cycles they go through. I have shown during the past few years (certain long term trading systems like the turtle trading system have shown through the past 3 decades) that a system can keep on working if it adapts to the markets as they change through some simple criteria. So in reality many system will in fact "stop working" as the market changes (they will become extremely risky) but others have shown that through the use of simple adaptive criteria they can survive a WIDE variety of market conditions.

Myth Four. Automated trading system do not work. Again, this is generally a myth that has been put up by those people who have failed to achieve success with algorithmic trading systems. Usually these are people who have gone out, bought commercial experts, expected holy grails and got a load of account-wiping and unsound trading systems that got them nowhere. Automated trading systems do work and the fact that I have been able to achieve a living from them proves this point. It is not that these systems do not work, it is that adequate analysis, expectations and knowledge are necessary to create them and use them properly to achieve long term success. The use of sound techniques, strong reliable evaluation and general long term outlook are vital to achieve success.

Myth Five. If automated trading worked, everybody would be doing it. This is generally one of the first things people who are unfamiliar with the whole world of automated trading ask me. If what you do is simply execute some code into a computer then why couldnt the whole world do this to achieve profitability ? The answer lies in the fact that automated trading systems that are likely to be long term profitable are EXTREMELY difficult to trade. You would think that this is not so bad but in reality only few people can have the confidence and understanding to deal with the draw down periods (which are often long and deep) inherent to the actual trading systems that do make an eventual profit. Donchian channel systems have been out there for 40+ years and have proven to succeed under extremely varied conditions, yet few people ever use them because of the above mentioned reasons.

In the end automated trading is no different than manual trading. It is not a shortcut and it is not an easy way to do things, nonetheless it is also not an impossible thing to do to be profitable. Automated trading - as manual trading - is psychologically demanding, requires extensive knowledge about what you are doing and allows you to achieve realistic profit targets when you do things the right way. Sadly succeeding in automated trading is not something most people can do and the reasons are mainly within the above five myths. Most people simply tackle this as an effortless way to get rich and they do not want to do the actual effort to get a profit and a "down to earth" perspective about what can and cannot be done in trading.

Hopefully some traders in the end realize that it is not easy but that it is doable and they are willing to do the effort and go through the learning process necessary to get there. If you would like to learn more about educating yourself around automated trading and how you too can build systems around sound trading techniques that are likely to be long term profitable please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

The Metatrader 5 Series Trying Metatrader 5 Porting Watukushay FE

I have to confess that I was pretty excited last week when I learned about the release of the full metatrader 5 strategy tester. Being a fan of simulations to accurately model past trading I was dreaming about all the great enhancements that were now available and how all current Asirikuy systems would benefit from these implementations. This week I have been playing extensively with this new platform, mainly getting to know the MQL5 new programming language and all the "new ways" of doing things we must now relearn. I started by analyzing and understanding the sample experts released with the platform and later coded a few very simple systems to get to know the way in which things are done, indicators called, etc within this new trading program. On todays post I want to talk to you about my first "real exercise" which involved the porting of a preliminary version of Watukushay FE to metatrader 5. I will describe the process I went through, what I achieved and some of the things that surprised me when comparing results obtained with the Metatrader 4 backtester.

First of all, I have to say that coding experts for MQL4 has almost nothing to do with coding in MQL5. Almost everything is done differently and even though previous knowledge of MQL4 is useful, the truth is that several things like order placement, reading of indicator values, reading of bar values (high/low/open/close) and order selection are done differently. I found the approach implemented in MQL5 to be a little bit harder but yet a ton more flexible. This is particularly true of the new implementation of indicator and order handling which will now lend itself to an incredible coding flexibility. There are also some very useful functions included within the Trade.mqh file (downloaded with the platform) that will make EA programming a ton easier for those of you looking towards an "easier transition" from MQL4 to MQL5.

After familiarizing myself with the platform I decided to code the system that would be most easily available to all of you. Since Watukushay FE is the most widely used Asirikuy system -due to its free character- I decided to give the porting of Watukushay FE first priority. It is however important to say here that I did this porting merely as an exercise and it wont be the final release version of this EA for metatrader 5 which will probably take a few more months of polishing to develop (since we are currently developing a common MQL5 framework for Asirikuy systems taking advantage of the new classes implementation in this language). However the preliminary EA version I coded contains all the logic of Watukushay FE and follows the exact same logic as the MQL4 version in backtesting.

I have to say that I am amazed with the capabilities of Metatrader 5 regarding speed of execution. Simulations are not only fast but about an order of magnitude faster than in Metatrader 4. Watukushay FE runs a 10 year simulation in MQL4 in about 5 minutes while the Metatrader 5 implementation takes a little bit more than 30 seconds. Added to this absolutely great feature is the fact that multithreading is available for optimizations meaning that I can run a full 200 run optimization in less than half an hour when it previously took about half a day. Being able to run optimizations in parallel is a blessing and it will most likely open up the doors towards the finding of many profitable instruments and setups not currently used with Asirikuy systems. Below you can see an image of an optimization running on the 4 cores of one of my beloved quad processors.
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You are probably also wondering how the Metatrader 5 backtesting results compare with the Metatrader 4 results and I would have to tell you that the results are a little bit puzzling to me. Watukushay FE is definitely long term profitable on both platforms but results are overall much better in Metatrader 5 when compared with the MQL4 version. The nature of this difference seems to be the difference between data sets. Since this version of Metatrader is new, we could assume that the data quality and interpolation mechanisms are better but such an assumption would have to be proved. Right now I am pleased to tell you that the EA - with the exact same settings - performs better on MQL5 and the Metatrader 5 data than on the Metatrader 4 version, meaning that -if anything- Watukushay FE is as good or better than what we think.
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There is also a ton more of things to discuss regarding the optimizations of Watukushay FE and the new features and results available within the Strategy tester but for today I think that all the above information is enough :o). I have now started this series of posts called "The Metatrader 5 Series" which will deal with topics related to simulations, programming and overall features of this new Metatrader 5 platform which is bound to become the standard within the next few years in automated trading. During the next few weeks I will release several new posts on Metatrader 5 and probably Asirikuy members will also be able to enjoy a few videos on the matter :o)

If you would like to learn more about automated trading and how you can code your own likely long term profitable systems based on sound trading tactics please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

Backtesting Gods Gift Consistent Profits Over Several Pairs

A few days ago I introduced my new version of the Gods Gift expert advisor through a blog post (my newsletter subscribers received a detailed email explaining that release in detail as well as the 8and8 expert advisor). Now I want to talk a little bit about the optimization jobs I have been doing with this expert and how the Gods Gift expert advisor proves to be profitable amongst several different forex pairs.

In order to know if the ea was profitable or not, I started by back testing it in the GBP/USD pair using the settings I had known to be profitable form last years forward testing (12 months). According to the values of stop loss and trailing stop used, I realized that they would be the equivalent of about 30% of the ATR for the stop loss and 15% of the ATR for the trailing stop, however, I realized that the trailing stop was much more profitable if it was changed from 15% to 70% of the ATR, also decreasing the risk to reward ratio of the expert advisor. The back test graph I got was the one shown below.
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Now that I knew that the expert could trade the GBP/USD profitably, I wanted to know if this time I could get it to work with other forex pairs. My previous efforts to do this had failed dramatically as I could not find any other pair that was profitable since 2004 or before with Gods Gift 7c besides the GBP/USD.

The first pair I started to test was the EUR/USD. The same settings failed to work straight from 2004 to 2009, but I did see that the settings used for worked perfectly when the pair was in high correlation with the GBP/USD. The solution was to optimize the stochastic parameters of the ea in order to find a better fit for the EUR/USD. In my mind, the stochastic parameters, which determine when to enter a trade, are what defines the "psychology" of the pair. After a lot of effort, I got the backtesting curve you see below (this one is from 2000 to 2009).
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Again, I decided to retest the expert advisor with another pair, the USD/JPY, trying to still refit the stochastic values against the pairs trading style. As if the expert advisor could magically adjust to every market condition, I found a set of parameters that worked the USD/JPY perfectly from 2000 to 2009. The image is shown below.
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As you can see, the new expert advisor does really good in backtest (and we know this correlates very good with forward and live testing according to last years results) and does not have any of the "black holes", so common in todays commercial expert advisors. This expert has good linear equity growth, with loses, fixed stop loss values and trailing stop values you can see and set. The expert has a very good risk to reward ratio as all the backtests show that the average win is almost double the maximum loss.

If you would like to learn more about this new version of the Gods Gift expert advisor I coded and the results we had with this and other expert advisors last year (as well as this one) please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Releasing My Free Ebook An Introduction to Automated Trading

After a lot of thinking and editing, today I am finally releasing the first version of my free ebook "An introduction to automated trading". This new ebook is a compilation of what I consider to be the best content of my blog to this date, the sum of a lot of basic knowledge about automated trading that should largely benefit traders who are new to this field. On this article you will be able to read more about my ebook, what it is about, what its objectives are and finally you will be able to download the pdf and enjoy the fruits of this effort to generate a high quality content guide for those people who are desperate in finding some truth in the world of forex trading.

When I see my websites keyword and search engine analysis it is a little bit disappointing to see how the posts that are visited are never those which I think portray the basic knowledge needed to start a profitable journey in automated trading. I spent a lot of time and effort in the writing of all this content and certainly it is pretty bad to see that it is almost never accessed. Of course, part of this problem is due to the fact that my blogs content management system is so primitive (more like bloggers content management system) but a larger part is due to the fact that updates are too frequent (daily) and therefore very good posts get lost after being only read by my very faithful audience (thanks again for visiting my blog !).

In order to solve this problem I decided that the best thing to do would be to create an ebook that would hold all the best content of my blog such that people could easily access my best posts and read them in an easy and convenient manner. My objective with this ebook is to increase the coverage of these very important posts by making them available within an easier to use format. All of this ebooks contents are already freely available within this blog but the ebook format makes them easy to read and easier to browse. There are literally hundreds of posts on this blog and finding those that I would want to be the most visited ones is very hard, a problem the ebook will solve.

Another important aspect is the fact that the ebook will increase the awareness about the myths and lies portrayed by EA sellers and people who want to push products in the automated trading industry, something that will certainly benefit newbies and generally people who are new to trading. I have the highest hopes that people will share the ebook online and make it a "must read" for those who want to venture in this field, however time will tell if this does become the case.

The ebook contains a lot of content which I consider basic knowledge that everyone who wants to try automated trading should have. The ebook has a section about "market truths", covering basic realities of the market (such as realistic profit targets) , a section dealing with trading system design, another one about automated trading psychology and losing periods and a large section containing posts about the understanding of indicators and how they can be used for the creation of automated trading systems (which is the indicator series of posts). The ebook has 95 pages of content, including more than 30 of my best posts (in my opinion at least). If you would like to suggest the addition of any posts, or you would just like to give your opinion or a suggestion feel free to leave a comment. I would be thrilled to know what you think about this new release !
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It is also worth mentioning that from later today my paid ebook will also become unavailable as a single purchase and it will only be available by joining Asirikuy, this ebook will also be updated later today to include new content :o). If you liked my free ebook and you would like to start a journey in automated trading based on truth, transparency, analysis and understanding please consider joining Asirikuy, my website about automated trading and the achievement of profitable trading using long term profitable systems.

Suggest Your Best Expert Advisor

I have been thinking about designing at least three free expert advisor portfolios. The objective is to buttress my idea that several free expert advisors can remain profitable in a wide range of market conditions. Although I know several free expert advisors, my knowledge is rather limited.

Therefore I appeal to my readers. If you happen to know any free forex expert advisors which you think are profitable, please do suggest them so that I can include them inside one of my portfolios. The experts must follow these guidelines :

- Must be completely free (source code available)
- Must have a stop loss
- Must be a trending, ranging or breakout expert advisor
- Must have a magic number (so that it can trade with other experts)

Please suggest any experts that meet this criteria and you feel could provide a very good addition to my free expert advisor portfolios. Just leave a comment !

Forexhope com DTS 1 Expert Advisor Unbiased Review

I have been following forexhope.com developments for the past two years and I have more often been impressed than not by their expert advisors. Their system Pointbreak has been traded and reviewed by me before (see links on the left and ebook) and their new DTS-1 trading system could be no exception.

According to their website, the DTS-1 or Dreambuilder FX expert advisor seems to be like a version of Pointbreak on steroids. Pointbreak is a sort of grid trading expert advisor that uses, hedging, pyramidying and other useful tecniques to stay on top of the game and always return the account to a profitable return. If you have read my ebook you know the draw downs and possible profits you could be facing with Pointbreak but it seems that the DTS-1 expert advisor has been an improvement over that.

The dreambuilder-FX expert advisor claims to have some new feautres over Pointbreaks logic which eventually translate into accounts with lower draw downs and more profitable returns. When you see the back and forward testing results on forexhope.com website, the results seem a lot like those you would expect from Pointbreak. You get several open draw downs at some points with the account eventually getting eveything back up to profits. The amount of those open draw downs is the subject of interest here. 

I am now familiarized with this type of cycle trading systems and I would consider the DTS-1 expert advisor worth testing, as it seems to have reasonable risk to reward ratios with also reasonable open draw downs. Newsletter subsribers will receive investor access account number and password as well as access to the forward trading results (updated every 4 hours) on my ftp server.

If you would like to learn more about Pointbreak and this type of systems in general as well as other free and commercial profitable trading systems please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Forex Expert Advisors DNAFx Trading a Second Unbiased Review

A few days ago a visitor left a message on the websites chat telling me to redo my review of the DNAFx Trading system in virtue of its new back/live testing evidence which, according to the person who sent the message, is enough to consider changing my past opinion about this trading system. On todays post I am going to do a second review of the DNAFx trading expert advisor in virtue of its new trading evidence which I consider does grant it the possibility to change my previous opinion. Within the following paragraphs you will learn more about my views regarding the new evidence for this trading system as well as if the evidence presented is enough to consider the trading system worth buying and testing. I will also give my opinion about the systems like hood of long term profitability and the reliability of the evidence presented.

Within my previous review of this trading system I had said it was not worth buying or testing in virtue of the complete lack of live trading evidence and the unreliability and unverifiable character of the back testing evidence shown. Now, I have to say that the people behind DNAFx trading have done a good effort and have presented us with a live account linked to a myfxbook widget (showing third party investor access verification) for their expert advisor showing almost 5 months of live testing data. This period of live testing reveals that the trading mechanism of the expert advisor is what they describe with several very profitable trades (which seem to be breakout trades) and a larger yet much smaller number of loses which are typical of breakout systems between profitable periods.

Regarding the systems trading tactic I would have to say that from the live testing statement, the technique used seems to be sound and to follow the two of the most important premises of trading "let your profits run" and "the trend is your friend". The introduction of third party verified live tests which are updated frequently is a true compromise with their own trading system, definitely showing that they want to prove their systems capabilities fully.

However, the systems current profit of +50% with a draw down near 10% does show that the draw down/profit targets deducted from backtests are not accurate possibly due to the fact that backtests are run within the 15 minute timeframe a very inaccurate time frame to run backtests due to the small number of reference points when compared with larger time frames. As a matter of fact, the largest true modeling quality achievable with this timeframe is more around 60-70%. Of course, these problems can be made even worse depending on the trading strategy used reason why the profits seen in backtests are very overestimated, something which is obvious when you consider an 11000% profit with a mere 18% draw down.

I would say that the only thing that the people at DNAFX trading are missing to make a full evaluation of their system is back/live testing consistency analysis, that is, they need to provide a backtest of their live trading period to show if trades match and if simulations provide realistic expectations. Please understand that I am only interested in systems which are able to show the HIGHEST like hood of being profitable for the next 10-20 years and for this robustness through several market conditions MUST be proven, the only way to do this (besides 10 years of live testing) is with 10 year backtests coupled with back/live testing consistency analysis. If this information is not given then the likehood of long term profitability remains low.

Up until now, the people at DNAFX trading have been able to show that their system a) uses the trading tactic they say and b) has been profitable for the past 5 months. However they still lack a validation of their backtesting results meaning that there is actually no way in which we can currently evaluate if the system is able to adapt and survive changes in market conditions. The only thing missing is a backtest of the past 5 months so that live/back testing consistency can be evaluated. If backtesting consistency with live tests is not present, which I suspect would be the case due to the profit/risk figures of the backtest, use of 15 minute time frame, etc, then a live test of a few years would be needed to show the systems adaptability. If back/live testing consistency is present, then this system would have enough evidence to be considered worth buying and testing.

I would have to say that this system still does not satisfy my criteria for long term profitability in the sense that there is no backtest we can compare with live trading (tests within the same period). However these people are very close to providing all evidence necessary to consider the system to have high like hood of long term profitability. Please understand that there is a high responsability for me in recommending any trading system and I cannot recommend in good conscious a system which, even though showing live trading results, does not show conclusive evidence about the validity of the backtests and therefore the possibilities of the system to be long term profitable. (Remember that I am looking for LONG term profitable system, not systems that can merely provide proof of a 6 month testing period)

If anyone from DNAFx Trading is reading this, please provide a backtest of the same period as the live tests so that I can do a live/back testing consistency analysis and evaluate if the system does or does not provide evidence of LONG term profitability. Since this system is only missing this small (but absolutey VITAL) piece of evidence I will email the creators so that they can email me the tests or post them on their website. Meanwhile, I would have to say that I do not consider this system worth buying or testing until this evidence is provided due to the fact that the validity of the backtests (which allow us to evaluate LONG term performance) is missing.

If you would like to learn more about automated trading and how you too can design and trade your own long term profitable systems based in sound trading tactics please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

Forex Expert Advisors Robominer and GT Shadow an Unbiased Review

Many of you may have read my reviews on the Robominer expert advisor. During the last week, there have been some interesting discussions at the robominer forum which have led me to write a third review with all my new perspectives and balanced views about this expert advisor. With this review I plan to analyze the system in depth and give my unbiased opinion about it, its perspectives as a long term profitable trading system, its risks and its trading mechanism. This review will replace all my former reviews on the robominer EA which will be deleted after this post comes out. However, this review keeps the link from my former reviews as a way for people to get here and read this new perspective.

First of all, let me say that the creator of the robominer EA does a good job at explaining the robots trading mechanism and the way in which this trading system trades the forex market. The robominer EA is a grid trading system which tries to capture profit by opening trades towards the median price of currency pairs from "similar" economies such as the EUR/CHF and the AUD/NZD. The problem with this trading methodology is that it is subject to large levels of open draw down because positions have no stop loss and the trade "assumes" that the market will come back to hit the take profit of the orders. As you imagine, this EA will many times open trades against the trends when price is moving to test out the range "extremes".

The robominer system has been tested extensively during the past 1,2 years by the EA seller and many other independent testers, being the most prominent of these reviewers pipcop which has tested the EA for a little bit less than a year. With no doubts, the trading strategy has worked for this period of time for the EUR/CHF and the AUD/NZD, this can be seen perfectly on the one week charts of these pairs which show how the EA has been able to exploit the regression of the pairs extreme values towards the central point of the long term (5-10 year) range.

Can grid trading be a profitable strategy under certain market conditions ? Yes, without a doubt, grid trading can generate money from these returns towards median price but its reliance on the absolute range makes the trading strategy faulted. Should you not use grid trading systems ? Well, the answer is, it depends. What do you want ? If you want an EA that self adapts to the market and is able to trade with minimal intervention from you, then the answer for you is no, do NOT use a grid trading system because they expose your accounts to excesive open draw downs if they are just traded blindly without any supervision. If you want to get profit out of long term ranges but you know when a grid trading system can accumulate potentially hazardous positions then my answer would be yes, use a grid trading system.

It is a true that any grid system will, eventually put peoples accounts in jeopardy, this is not something I am making up or something that will never happen. No matter the range, the currency pair, etc, a grid trading system will always find itself outside of the range with a lot of accumulated open draw down positions. This will happen because in the long term, small economical differences will cause a currency to slowly appreciate over the other. This is a fact and it is reflected in the ten year robominer backtest shown below (statement available here). This was the ONLY ten year backtest (from 1999 to 2009) I could do without an account wipeout before 2004. If you use the current level of risk used by pipcop and other reviewers you will see that it wipes accounts before 2004. This is a backtest done on the LATEST version of robominer II with default settings and a starting 100K balance. Does this mean you should discard grid trading ?
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In my case, I am interested in trading a system in which I can rely on for the very long term, systems that prove to work under varied market conditions and that will never put my account in risk with lots of open positions with a high open draw down. Is this what the robominer offers ? I am sorry but this is not the case. I am not interesting in holding 3 years of open draw down positions, even if they come back to profit. The risk I run into when holding such large loses for such a long time is just very non conservative and, for me, a clear view of an uncapped market exposure.

Is there potential for profit using the robominer EA ? I would certianly say there is, but great care must be used when trading such an EA. For me, grid trading such long term ranges requires some careful analysis. I would, for example, only trade this EA when we are in the extremes of the ranges and breakouts have failed to happen, this will ensure a safe long term ride towards median price with much more moderate risk. Of course, this will happen once every 5 or 6 years so I would only trade the system for 2 out of every 10 years, when market conditions are most favorable to enter positions.

Is the robominer, under my definition, a long term profitable system ? Does it have the potential to generate long term profits during the next 10-20 years without an elevated market exposure ? No, this is not the case as it is shown by not only backtesting, but the trading system strategy in general. I would never put the robominer in a trading account and use it for the next 10-20 years, there is the very strong possibility that during that time it will hold excessive draw downs which will seriously compromise my equity. It does not adapt to changing market conditions and the fact that its market exposure is uncapped makes it a bold risk for long term trading.

Could it be used to profit while the ranges last ? Sure, people could trade this EA to profit from returns towards median price from the edges of the EUR/CHF and the AUD/NZD ranges. I would only use grid trading from the extremes as the most dangerous scenario is an overextension of the range with accumulated draw down from positions opened from places near the median price. Using such a trading system only from the edges of these very long term ranges would somehow further diminish the market exposure and diminish the amount of time people would have to hold onto this very long term open draw down positions.

I have to say that the robominer fulfills its promise as a grid trading system, it will generate profits and remain profitable as a range trading tool but as a long term trading tool to be used with no intervention it will puts peoples equity at a very high risk. There are profits to be made with grid trading but the exact trading opportunities and trading moments have to be carefully chosen so that future draw downs are minimized. Remember that these systems are particularly dangerous in the sense that positions opened near the median price can cause heavy draw downs which will only become apparent in 2-3 years.

My advice ? If you are going to use a grid trading system you should be carefully aware of its logic and the risk in which it puts your equity. Grid trading systems are not systems to be left unattended and to be traded all the time. If you do so the trading system may cause you your whole equity. However, you can get profit from grid trading if you accurately time the moments in which you will open positions and avoid the generation of heavy draw downs by avoiding the entering of positions near the median price. After all, grid trading is one of the only ways to trade an inherent characteristic of the market, which is the development of ranges. However, grid trading assumes that a ranges is "all there is" and therefore it runs its greatest risk when the market trends away from the edges of the grid.

In conclusion, I would say that the robominer is a system that, according to my definition, is not long term profitable and non conservative. However, it can be used profitably if used accurately. Personally, I would not be able to sleep at night with positions holding a 50% open draw down and therefore I know this does not fit what I am comfortable with as a trader. Having an uncapped market exposure is not what I consider to be a long term viable way of trading the forex market. However, should you buy this system and trade it, you should be aware of all the risks it implies and the possibility that you will incur very heavy draw downs or even wipe outs during the next 5 to 10 years if you just "set it and forget it". To sum it up I have prepared the following small Q and A about the EA.

Can it generate profits ? Yes. How much profit can it generate "safely" remains an open questions. Backtesting shows that the current levels of risk generating 5-10% a month were subject to wipeouts in 2004. So now, based on backtesting I would say that a 70-100% profit every ten years seems reasonable. Backtests done with higher risk from April 2008 are consistent with the live results of both the author and the independent reviewers so there is no reason to believe that the backtest from 2000 that predict wipeouts are not realistic.

Does it have an uncapped market exposure ? Yes. The "capping" of the market exposure, in my opinion, must come from the trader when using grid systems. The trader must know when he/she should turn the system on and when it should be turned off.

Will it generate heavy open draw downs ? Backtesting shows it did. And surely trades opened near the median price will generate a lot of draw down when the currency pair heads towards the extremes of the range. The problem is that there is no guarantee that this trades will return to their take profit levels, this is the dangerous assumption made by grid trading systems.

Is it long term profitable ? As I told you, under my definition, it is not, it would be hard to believe that these pairs will hold their ranges for 20 years and the EA lacks adaptability towards changes in the median price.

Would you ever trade a grid system ? I would never assign more than 10% of my forex investments to grid trading because it does not fit my trading style and I believe that the absence of a closing mechanism is not a reliable path towards long term profitability. However, I would always consider allocating a small percent of my trading funds to an account dedicated to grid trading as long term ranges do remain inherent characteristics of the market. That said, I would not use the robominer EA for this purpose.

Now that you have the information, it is up to you to decide if this type of EA fits your trading style and if you would be comfortable trading a system that is subject to unlimited open draw downs while it profits from long term ranges. In my opinion, why would you use such an EA when there are many other commercial and free solutions that do not put your equity at such a large risk and generate similar o superior profits ?

If you would like to learn more about the systems that I use, how they adapt to the market and how you too can program and trade your own long term profitable trading system as well as freely available profitable systems please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Avoiding the Forex Burnout Staying on the Game !

Through the many years I have been trading the forex market and for the past 2 I have been building and trading automated trading systems I have more than a few times thought about quitting forex trading. Many of you may understand what I am saying here. There are a few times when your trading when the frustration and failure are so evident that you are just wishing to forget about the whole thing and move to something else. I want to dedicate todays post to this matter, I want to explain my personal experience to you and give you some advice on how to avoid getting burned out and so frustrated that no other path beyond quitting seems possible.

The first time I wanted to quit trading was definitely when I lost my first live account (sounds familiar ?). It is never easy to go into trading with so many hopes and dreams and then have them crashed within a few weeks. Definitely moving on and continuing to trade was not an easy thing to do and perhaps what mostly motivated me in this area was the fact that I took a deep look into my trades and my mistakes and I was confident that I could get them fixed. However this was actually not what happened leading me into the wiping of my second forex account a few months later. I can say in retrospective that the problem back then was my inevitable desire to get rick quickly. I then kept forex in the background for several months, trying to study as much as I could to try to solve my problems with the market.

Truly what then got me into trading again was the promise made by automated trading and then sometime later by automated trading system creators. I then found out that this was nothing more than a land filled with scams and deceit. Little did I know when I read the first EA product website that everything was nothing but an empty promise. However, being a scientist, I have a very high tolerance for frustration and a very analytical way of approaching things so I decided that if I was going to survive all these scams and find the "one true and good EA" I had to commit myself to do this in a way in which I couldnt easily quit. This is when this website came into shape. I wanted to go out, review and tests experts and find the true jewel which would make me rick.

In time and analysis, I started to realize the true make up of long term profitable trading systems and I started to see the real reasons why all those commercial automated trading systems out there failed. I started to see the holes within the evidence they provided and I started to see through all their "evidence" and gimmicks. Then I realized that if I ever was going to make any money in forex trading I needed to put my knowledge to work and build automated trading systems that could be profitable in the long term by myself. In order to truly commit to this endeavor I learned mql4 (I knew C and fortran form before so it wasnt terribly hard) and started to program what I thought were sound adaptive approaches to trading into expert advisors.

This is about the time when I started the newsletter because I realized that this would be in fact a way of not being able to avoid staying commited. I would not be able to just forget about the market or my systems when things turned sour and draw down periods arrived. I would have to stay there and analyze the most harsh market conditions and worst trading results whenever they happened and this fact that I had to "stay on top" of the market because of my commitment to my subscribers was definitely something which greatly contributed to my understanding of the markets and the subsequent development of more profitable systems.

In retrospective I think that I would have never been able to get to the point of "living from the market" in which I am today if it wasnt for this website. Definitely I found out that having the "obligation" to stay commited helped me a lot to avoid quitting when I felt like doing so, it helped me to deal with bad trading periods adequately and to really trust and have confidence in all the knowledge I have acquired through the years in forex trading. I would certainly recommend this approach to anyone who wants to succeed in trading in the long term. Build a commitment to other people around your trading, make up a blog with a trading journal, make up a thread in a forum around your trading and post there everyday, any idea which makes you "have to" stay on top of your trading regardless of how you feel about it will be a great way to avoid quitting when you want to.

Now I can tell you that I truly enjoy posting on this website everyday and I feel like I have learned tremendously for the past 2 years thanks to it. If you would like to learn more about what I have learned about automated trading systems please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

Uploading Files to a VPS A Simple How To

I have noticed that several people have found my website while searching for things like "get my mt4 into VPS" or "how to move files to VPS", in order to help people find what they are actually looking for I decided to dedicate todays post to a small tutorial on how to move files from your computer to your Virtual Private Server (VPS). Moving files is a vital task which is absolutely necessary in order for you to use your VPS for forex trading. On the following paragraphs will try to explain all the techniques I have used to get files to my VPS and what the advantages and disadvantages of each one are. So how exactly can you get a file from your home computer to your vps ?

The most easy way to move things from your computer to your VPS is to use your email address. Simply send yourself whatever file you want to be on your server and then open your email from your VPS and download the file. This is a very simple way of getting small files into a VPS but it carries the problem of having to access your email, send yourself the file, go into your VPS, access your email and then get the file from the message you send to your VPS. It also has the additional disadvantage of having an inherent size limitation due to your email accounts setup and the added bandwidth use of uploading and then downloading the file.

If you want to send bigger files using email you can always use file sending services such as yousendit.com which lets you send files of up to 100 MB. The website then sends you a link to your email from where you can download the file. This allows you to save you the trouble of accessing your email from your VPS since you can simply copy and paste the link into your VPSs web browser to get your file where you want it.

If however you need to constantly upload files into your VPS, non of these two options will work for you. Most people that actively test or use many trading systems and trading accounts usually need to upload many things from time to time, something which becomes excessively cumbersome when using email. The best solution to this problem is what I use to upload and download files from my VPS and certainly works like a charm. Setup an FTP server. Certainly the task may sound a little bit daunting for the new VPS user but in reality it is a fairly simple thing to do.

In order to setup an FTP server on your VPS just go to the filezilla webpage and download the server to your VPS. Then open up the setup file and install the software (you will need to configure your administrator username and password). After this you just need to go into the Startup Menu item created and click the "Start" button. This will start your VPS. You can also open the Sever Interface where you can create additional users or change your administrator password. Once you do this you need to download the filezilla client from the same webpage and use it on your home computer. From the client you will be able to upload/download files to or from your vps with the ease of dragging and dropping. Youll be able to send or recieve large files or large sets of files and place them easily wherever you want. Simply having an FTP server is the best solution I have been able to find to the problem of downloading/uploading files to or from a VPS.

If you are using your VPS for forex trading and you would like to learn more about automated trading and how you too can design, program and trade your own long term profitable systems please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Can Anyone Trade the Forex Market Well see !

Through the whole time I have traded the forex market and particularly more during this year I have been puzzled by the ever lasting question... Can anyone trade the forex market profitably ? Well, the answer seems to be no, but the opinion seems to be yes. Evidence suggests that the majority of retail traders lose their money. However for some reason people tend to believe that everyone can trade a forex account with a profit. Can this be done ? Can anyone trade the forex market profitably ?

Of course, I am not the first person to ask this question and this has already been answered by Richard Dennis, in the 70s when he traded his turtle traders to get massive amounts of money from the market. However, the turtle experiment has some very particular characteristics that make it hard to apply to the current situation in the foreign exchange market. For example, Richard Dennis gave his traders two million dollars to invest, they traded a rigid system with fixed rules and they traded futures and stocks, not forex.

So Richard Dennis did in fact show that "anyone" could make money in trading, that is, anyone who can follow a rigid set of instructions and execute them without judgment to obtain a given result. He in fact demonstrated the basic premise that allows automated trading systems to make money, the execution of a rigid given set of rules that take advantage of a market inefficiency will generate profit in the long run. However, my point goes a little bit deeper.

I want to know if anyone can make money in the market, understanding the market. Can anyone design a trading system to take advantage of inefficiencies in the foreign exchange market ? Can people with no trading in economics or finances make money trading ? Here is where my little experiment will start.

In order to know if people are able to make money trading with absolutely no knowledge whatsoever I have decided to start a small project that will have as an aim to achieve the sustained profitability of two trading accounts managed by two people who dont have the slightest idea about forex trading. In order to do this I have selected two friends, one of my best friends, who is an electronic engineer and a friend from my little sister who is currently studying for a major in biology. These two people are ideal for this study as they have had no contact with the financial markets and they lack any understanding of how macroeconomics or currency trading works.

My plan for them is actually a 4 month plan which will have a carefully developed agenda to "guarantee" their success in forex trading as much as I can. I will try to teach techniques based solely on price action so that they get a grip of the fundamental forces behind market movements. This is the outline of how they will trade :

• Month 1 : I will teach them the basics of the market (what a pip is, what a pair is, etc, all the basics). They will start a daily journal in which they will write their opinions about the EUR/USD each day. These opinions will be fairly simple and will only answer the question "do you think the pair will close tomorrow higher or lower than today, why ?"
• Month 2 : I will start to trade with them on a paper account. I will sit with them one hour each day and we will discuss the market and enter a trade randomly each day, they will decide the targets of the trade and apply money management techniques we learned in month one. We will also do extensive simulations in which we will execute the same technique.
  
• Month 3 : We will start to trade on a 200 USD real account. I will coach them during the trades but they will ultimately decide whether or not to enter trades, how much to trade and when to exit the trades.
• Month 4 : They will start live trading by themselves and we will see if they can apply all the knowledge they adquired during the first 3 months.
  

They will have to keep trading journals of all the trades and they will also have to reflect upon them and analyze what went wrong in each trade and what could have been done to better exit/manage the trade. My objective is to have them dedicate between one and two hours each day to currency trading and I believe that after these four months I may be able to get some interesting results.

Of course, chances are that after four months of riguruous trading they will still wipe their accounts but I want to do the experiment to learn as much as I can about beginner trader psycology and what the real mistakes new traders make are. More importanly, this will let me analyze exaclty what can be done to help new traders and what particular trading techniques work better for people who are just starting forex trading. Obviously this will also tell me how easy or hard it is for "anyone" to learn to trade the foreign exchange market. As they progress and I find out more about the trading learning process I will write more posts, new posts on this subject will be under the tag "ECT Proyect", ECT being short for "Everyone Can Trade".

When we arrive at the later stages of the proyect I will post their accounts via ftp so that you can all have an updated view on their account progress and the mistakes/successes they are getting. Of course, if you have liked this article and you would like to learn more about automated trading and how you can become profitable trading with expert advisors that have realistic profit and risk targets please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

FEATURES Marketiva

FEATURES Marketiva

FEATURES Marketiva is a broker is to provide bridging finance or aid in the form of a bonus equal to 5 dollars in capital which this money would automatically belong to you as a player in Marketiva.Dari currency forex $ 5 is just used to LEARN TO PLAY FOREX with real money sungguh.Setelah large developing welcome to take, how ngambilnya also already available disini.Bermainlah with stages that do not really play forex inconsequential way your business will be run not known.

Privileges Marketiva (in addition to reward $ 5 real money and $ 10,000 virtual money) theres more, heres another advantage.

Currently in www.marketiva.com provide forex trading in such long-term investment funds (investment fund), in which the trading fund is very different from forex trading is short term. Fund investment over a long term investment (long term).

Here is a specialty Marketiva form of investment instruments that are available there at this time such as:

    * Asiasset (Asiasset Towards the Fund is oriented investments in companies with operations in Asia or with significant exposure to Asia. The fund invests in a broad spectrum of stocks, from small and mid-cap to large, liquid stocks. Fund management team uses comprehensive research methods and fundamental analysis)
    * Indiamond (Indiamond Towards the Fund is oriented investments in companies with operations in India or with significant exposure to India. The fund invests in a broad spectrum of stocks, from small and mid-cap to large, liquid stocks. Fund management team uses comprehensive research methods and fundamental analysis)
    * Brasillion (Brasillion Towards the Fund is oriented investments in companies with operations in Brazil or with significant exposure to Brazil. The fund invests in a broad spectrum of stocks, from small and mid-cap to large, liquid stocks. Fund management team uses comprehensive research methods and fundamental analysis)
    * Yangtze (Yangtze Towards the Fund is oriented investments in companies with operations in China or with significant exposure to China. The fund invests in a broad spectrum of stocks, from small and mid-cap to large, liquid stocks. Fund management team uses comprehensive research methods and fundamental analysis.)
    * Columbus (Columbus Towards the Fund is oriented investments in companies with operations in the United States or with significant exposure to the United States. The fund invests in a broad spectrum of stocks, from small and mid-cap to large, liquid stocks. Fund management team uses comprehensive research methods and fundamental analysis)
    * Nippon (Nippon Towards the Fund is oriented investments in companies with operations in Japan or with significant exposure to Japan. The fund invests in a broad spectrum of stocks, from small and mid-cap to large, liquid stocks. Fund management team uses comprehensive research methods and fundamental analysis), and Constantine (Constantine Fund Relatively AIMS to maintain a fixed yield, with possibility of the yield increase is or Decrease based on the performance of the underlying investments. Fund uses surpluses from profitable periods to offset below-yield performance periods. Yield May be negative only in periods Pls underlying investments suffer losses)

In addition, there are Commodities (Gold, Silver, Platinum, and Palladium) and Indexes (Dow Jones, Nasdaq 100, S & P 500, DAX, and FTSE 100) also lhoo ...

Other privileges are very attractive to new entrants in the world of Online Forex Trading Platform Marketiva.com Trading is the only trading platform that is equipped facility menus Discussion (chat channel), more than 40 chat channels available there. The names of these channels is based on the names of the participants home country trading. So if you want to chat with a specific language, you just choose the appropriate chat channels with the language.

Well .. for those of you who want to discuss with the Marketiva.com, there are also available online chat channel "Support" to speak with a Customer Service Marketiva in English (except if you access the live support facility from the website, then the channel is allowed to use languages ​​other than Bahasa ), Chanel "Advanced Support" This is a development of the Support Channel for Marketiva already too many clients who access the channel at any time, and Chanel "International Support" to speak with a Customer Service marketiva www com with multi-language.

Thus some features FEATURES Marketiva. Anyway, easy to use buanget dech ... the people who are new to futures trading world, will feel very happy to use this trading platform.

Well now lets open your Marketiva account for mencobanya.Setelah have an account at Marketiva, if you want to download Markeiva trading platform please click here: Download Streamster

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A New Website Project Interactively Teaching and Learning How to Trade

During the past few days and thanks to a suggestion made by a fellow trader I have decided to embark myself in a completely new project that will surely make it easier for everyone out there to learn how to effectively and profitably trade the forex market in an automated fashion. What is this new project and what is so revolutionary about it ? I will try to answer this question through the rest of this post.

As you have known, for the past few years I have dedicated my time to the review and programming of different trading systems as well as the evaluation of automated trading systems and the teaching, through my ebook, of how regular traders can learn to design their own trading systems, evaluate existing systems and really analyze and determine which of them have or dont have the potential to be long term profitable. After starting the Watukushay project (which I will keep working on !) and publishing the first results on the ebook, a fellow trader adviced me that there was a better way to communicate all the learning material to my fellow traders.

The idea is simply to build a website offering video based learning that will enable my readers to learn everything I have published on my ebook, as well as new material and programming, through video material. The advantages are obvious, I will be able to make videos of every aspect of automated trading, including programming from the base, the explanation of backtesting, forward testing, analysis, etc. I will have the ability to walk people through all these aspects on videos they can easily follow. This will remove all the misteries from things such as reliable backtesting, VPS setup and much more complex things such as basic programming and strategy building.

The idea is to have this websites contents available through a one time payment (with a video or two added each week). Obviously the reason for this is that it will certainly take me a lot of time to build all this material into the high quality website my customers deserve. However I am a little bit uncertain about how much is a fair price for all this content (of course, I plan a huge discount to all my existing customers). My idea is to start with about 5 hours of videos with about 5 or 10 more minutes added each week. So what do you think ? Please leave your comments with your opinion and suggestions about this idea as well as what you consider would be a fair pricing for a one time fee for such a website.

Now, if you would like to learn more about my ebook and how you can start trading the forex market profitably with long term profitable trading systems please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Forex Expert Advisors Forex NightFox an Unbiased Review

Today I am going to dedicate this post to the review of a trading system which was suggested to me by a few newsletter subscribers. As always, I will honor their request and write a review abouth the forex nightfox expert advisor with my views about its trading. As all my reviews, this review will focus on the evaluation of the claims provided made by the author against the evidence provided as well as my analysis of the experts overall trading and my opinion about its long term profitability. Please remember that as all my reviews this review is as unbiased as it can be with no benefit for me for either positive or negative feedback about the trading system. When you read this review keep in mind that I am as interested as anyone else in finding a reliable, long term profitable trading system, my opinions and anaysis are the fruit of years of experience in the trading and analysis of automated trading systems.

Well, lets start from the beginning. The website starts with some pretty bold claims of profitability. The expert claims to have made 7,595 USD in profits from the forex market in 2009. This seems to be backed up by a trading statement from mt4stats shown later on the website. When you look at the statement it becomes apparent that the account cannot be said to be either demo or live, we dont have the slightest idea if trading came from a live or demo account because no inverstor access account password and login are granted. Now, why is this difference extremely important with this expert advisor ? The answer lies within the trading tactics used by the EA.

Not to my surprise, it turnt out that the forex nightfox expert advisor is a EUR/GBP scalper, what is wrong with that ? First of all, it is extremely important to know this because the EA is taking very small profitable trades in the order of 5 or 4 pips, any spread differences and widening found in live trading would obiously negatively affect the EA. As a matter of fact, many of these scalpers are profitable in demo and unprofitable in live testing due to this single problem with EUR/GBP spreads. Besides this, the problem of a very high 10:1 risk to rewards ratio makes the trading strategy unsound. Furthermore, the fact that the EA is scalpers points out another problem.

If you look at the experts backtesting it is obvious that it suffers from big one minute interpolation errors due to the extremely low TP. This couple with the backtester using a fixed spread makes the backtesting of the forex nightfox and other EUR/GBP scalpers extremely unreliable. Of course, the backtesting that would match the demo testing period is missing, probably because it would be a prove of this lack of consistency. The fact is that backtesting of this type of EA generally shows a lot more profitable trades than demo testing, which still shows profitability, however this is all lost when the EA changes to live testing and real spread widening and requoting starts to happen. Of course, this is the reason why EUR/GBP scalpers are excesively broker dependent and fail to work in long term live trading conditions. More over, the mere scalping strategy is something I dislike since these strategies eventually become void due to changes in the characteristics of the lower timeframe movements.

Since the backtesting is unreliable we cannot know the experts real performance since 2000, furthermore, since there is no way to know the live performance of the EA since the mt4stats statement cannot be trusted to be live there is absolutely no guarantee against the claims provided by the author of the EA. In my opinion, this nightfox EA is as good as the next EUR/GBP scalper, based on an unsound risk to reward ratio and being excesively dependant on the broker spreads, execution and feeds. Of course, you cannot cope with a 2 pip slipage or a 2 pip increase in spreads when you are in fact getting into the market just to take 2 to 5 pips.

Based on all the above analysis about this experts strategy I would have to say that this EA is NOT worth buying. The people at forex nightfox would have to provide LIVE statements with investor password access (to verify they are really live accounts) on several brokers so that people can really see the effects of live broker feeds on this EUR/GBP scalper. If the current statement is in fact a live statement then post the investor access password and the name of the broker so that people can achieve similar results. Of course, a 10:1 risk to reward ratio with a 5 pip TP on the EUR/GBP is bound to be unprofitable in the end because of the change in short term trading conditions, the problems associated with brokers and an eventual streak of loses which will wipe months of profits.

If you would like to learn more about what systems I consider worth testing and how you too can become profitable in forex automated trading using long term profitable trading systems please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Watukushay FE An Intra Instrument Experiment Part No 1

One of the best things about the new metatrader 5 platform - as I mentioned on a previous post - is the extreme quickness in which backtesting and optimizations can be done. It is remarkable how I can now do a 200 run optimization in less than an hour while previously it took more than 5 or 6 hours and even 24-48 for certain trading systems. After porting Watukushay FE and enjoying this very fast simulations capability I decided that it was time to try a multi-instrument approach for this freely available trading system. Certainly I had donde some experiments before on the USD/CHF and the GBP/USD but I had never been able to try as many combinations and settings as I wanted to due to the inherent slowness of MQL4 based backtesting. On today and tomorrows post I want to show you some of the results of my studies on several currency pairs for Watukushay FE and how these results show us a very wide and unique perspective about the Watukushay FE trading system. For those of you who do not know anything about Watukushay FE it is a freely available trading system I coded available at http://watukushayfe.blogspot.com.

It is important to note here that I coded Watukushay FE based solely on my observations of the RSI and trend behavior on the EUR/USD and I had never thought about making this expert trade on other instruments when I first designed and implemented its logic. It is a fallacy that a "good system" should work on "all" currency pairs as it tackles a "vital aspect of market psychology" since different pairs have different trading makeups and volumes which make their particular price action very different. Pairs that people may regard as similar such as the EUR/USD and the USD/CHF are in fact tremendously different with many systems that work on the EUR/USD failing to work on the USD/CHF and vice versa. Some of the reasons why this happens include bank intervention, liquidity, volume, trade deficit difference, etc.

However it is always interesting to look at the performance of systems on other currency pairs since it brings a hint about the differences between instruments, showing us why a system may work on one and not on another. Understanding and knowing the true nature of these differences allows us to develop systems that are "adapted" to each different currency pairs trading nature. An analysis of these differences also allows us to change the design of a system- particularly its exit logic- to better exploit inefficiencies found in a particular instrument.

The first think I did with Watukushay FE was to run the "standard" settings derived from very coarse optimizations on the EUR/USD on the GBP/USD, USD/CHF, AUD/USD and USD/CAD (10 year backtests on Metatrader 5). The results are indeed good -as shown in the graphs below- in the sense that the system is profitable in the long term on all of these currency pairs, however it is important to say here that profitability is much lower than on the EUR/USD with most of these pairs reaching only a compounded yearly profit to maximum draw down ratio of 1:3 to 1:5. This shows us that the system tackles a market inefficiency that is present to a certain extent on all these currency pairs but unfavorable conditions are much more frequent than on the EUR/USD.
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It is evident when comparing the different equity curves that the smoothest of them is the EUR/USD which - of course - achieves the best results. We see that Watukushay FE has smooth periods of profit on most of these instruments but unprofitable periods are simply very destructive for the other pairs while they are only mild for the EUR/USD. Even tough the equity curves seem to show us that all instruments could be traded profitably the potential reward for instruments other than the EUR/USD is simply not enough to compensate for the risk taken. The deeper draw down periods also make Watukushay FE on other currency pairs far more difficult to trade also limiting risk escalation to a great extent.

However it is clear that some very interesting questions arise. Is it possible to do coarse optimizations on other pairs to find more EUR/USD-like results ? It is possible to implement small modification to the logic that improve the trading technique significantly ? Are there any other instruments worth trading for Watukushay FE besides the EUR/USD ? I will tray to address some of these questions on tomorrows post. If you would like to learn more about Watukushay FE and all the Watukushay Project experts please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !