Archive for the "Trading" Category

04.02.2010 Post in Trading

Forex market has its own strict rules. Trading operations are carried out within a certain timeframe which is shown in a trading session timetable. The trading session is opened around-the-clock: in weekdays – from Monday midnight till Friday 22:00. As the banking activity is low during the weekends, the currency market does not work.

However, the world time differs in all countries and continents, so as soon as in one part of the world the trading comes to an end, in another one – it just begins. These time peculiarities are set out in the trading session timetable at Forex. That is why, there is nothing more important for a trader than to be at the right time and place.

It is essential for the category of active partakers at the trading platforms. For traders it is important to be in touch with the market situation constantly to have an opportunity of making the deals in the real-time mode with the most beneficial result.

The trading session timetable contains rather huge data volume which is impossible to keep in mind all the time. At this point, the trader can find support in various Internet-resources, where the current timetable of all trading sessions is entirely available. Moreover, there were created special programs which request information on the work schedule automatically and display it in a comfortable graph form.

Often, a certain trading tendency of one continent can be different for a trader from the aspect of investment profitability. In this case, he can rely on the trading session timetable in order to orientate himself in a great many of current events which are presented on-line and permanently up-dated. Being at the peak of economic activity, traders can work clock round in accordance with the scheduled sessions.

In consequence of the economic downturn and instability, a massive managers quit is currently observed. More and more new employees come into the labor market, they often have a higher education and necessary skills to make analytical forecasts for the market. It is this kind of people who become traders today. And the trading session timetable of Forex market appears to be a good aid for them.

Take a look at the trading session schedule in the following table:

Region City Winter time
open/close
Summer time
open/close
ASIA Tokyo
Hong Kong
Singapore
03:00    11:000
04:00    12:00
04:00    12:00
04:00       12:00
05:00       13:00
04:00       12:00
EUROPE Frankfurt
Zurich
Paris
London
09:00    17:00
09:00    17:00
09:00    17:00
10:00    18:00
09:00       17:00
09:00       17:00
09:00       17:00
10:00       18:00
AMERICA New York
Chicago
16:00    24:00
17:00    01:00
16:00       24:00
17:00       01:00
PACIFIC Wellington
Sydney
00:00    08:00
01:00    09:00
00:00       08:00
01:00       09:00

Added by Evgeny Galaev,
Chief Manager of InstaForex Client Relations Department

20.01.2010 Post in Trading

The modern Forex, on the assumption of list of services, provided by brokers, is a system of exchange trade of currency, metals, contacts for difference, etc. The work with rates increase and decrease at cent accounts does not differ from a classic work at real Forex market. At first sight it seems that this structure is very difficult, but having worked a little, you understand that everything is more simply. If you worked out in cent accounts, be sure, that the door in successful activity is slightly opened for you, and investors will be ready to entrust you the management of thousand dollars accounts.

If you are at the beginning of trader’s way, you should start from cent accounts. A lot of brokers offer to trade at mini-Forex starting with 10 cents. The point is that work at mini-Forex does not have essential differences from the work at “large” market.

Cent account can be used as intermediary from demo to real. Demo-account is attractive by the fact that any losses which you will, probably, have, in no way affect your wallet. However, there is one significant disadvantage, connected with the psychological part of trading. Being confident about your monies safety, you will not be able to plunge into the whirlpool of financial business, where on the next day after you have won a million you can lose everything. In order to overcome two main enemies of trader the fear and greed, you just need to feel the trading process, and that can be done only with real money at the real market. That is why the intermediate trading process at the cent account is the optimum alternative for the newbie. Minimizing the risks of losses in the case of trend reversal to the unfavorable side, you can continue the training at cent account. At that your small victories will be rewarded with the small but very pleasing profit. Of course, when the cost of point is 1 cent, you should not expect the huge earnings. Use the cent account only in order to study the market with its sometimes sharp movements, as well as for experiments with trading strategies and systems.

On the assumption of all mentioned above, the idea of cent accounts is that almost each beginning trader can, investing the small amounts of assets, learn the work skills with the real accounts. This is necessary for reduction of newbies’ potential risks. The major financial mistakes, which a lot of novices make working with the cent accounts, are minimized and can not be a barrier at the beginning of the trader’s professional way.

However, today because of the situation that market is oversaturated with traders a lot of brokers strive to decrease as much as possible the supply on the cent accounts, forcing in this way all traders to work with dollar accounts, as it was at the very beginning of Forex market development.

In such way, it can be said that cent accounts is a perfect launch platform, which gives an opportunity to any trader to learn all necessary skills and gain trading experience, realistically assessing his/her own possibilities for the real work at the currency market.

Added by Svetlana Milyushko,
InstaForex Clients’ relationship manager

13.01.2010 Post in Trading

As a rule, currency pairs’ movement on Forex market is directed, i.e. trend which is clearly determined after it finished. However, for more efficient work traders should know its direction at the beginning of a week.

Factors forming trend on Forex market:

Two factors can help you to determine the direction of weekly trend:

  1. Friday currency pairs movement on American stock exchange.
  2. Opening GAP (significant difference between the price at the end of previous and beginning of following day) at midnight from Sunday to Monday (Asian session). The result is currency pairs draw their resistance levels, breaking through one of them they turn it into support level, push off from it and will move in this direction the whole week.

Between American session on Monday and Asian session on Friday the channel of pikes resistance levels (by fractals and zigzags) determines the starting point of currency pairs breaking through up and down and as a rule, the whole week move in the preset direction.

The first and fundamental moment of currency pairs’ behavior on Forex market is their movement on Friday at American stock exchange. It is test through released news, strength and trend direction.

If extremely negative or positive news issue did not influence the currency pairs’ fluctuations on Forex market on Friday, it means that brokers and banks were not ready to such fluctuations and movement will start on Monday.

There are two variants of developments, if currency made abrupt jump in trend:

  1. New trend wave, for example 400 pips, which currency pairs moved in for the previous week, turns by Elliot into the first wave and the third wave in the same direction will be equal to 640 pips which is 60 % longer.
  2. Being at the beginning of medium-term trend wave from h4 to daily and weekly charts in this case pullbacks are from 23% to 62% – movement is trend-forming – new week – new jump along the trend.

If during the American session on Friday currency on Forex market did not start its movement it means that brokers can not determine the trend or movement direction for the next week and this direction will be known only on Monday.

We can make a conclusion from all above: depending on the Elliot waves’ behavior Friday determines the currency movement for the beginning of the next week.

  1. If potential trend strength is very big and there was leap in trend on Friday, then on Monday correction or reverse or news wave in trend is expected.
  2. If on Friday currency jumped against the trend, then this Friday movement will turn into correction or the first wave of reversed trend.
  3. If currency did not start its movement on Friday, it means we can expect the formation of movement on Monday or Tuesday.

One more Forex market peculiarity is analysis of news calendar for the next week. Events which can influence trend’s mood and all corrections should be pointed out.

There is also characteristics which was noticed by A. Elder – you should pay attention to the gap which appears at midnight to Monday – whether currency pairs of allies opened up or down and what direction currency will move after that at Asian trading session – as a rule, the same direction currency will move the next week.

To earn at Forex market, you should understand that intraday trend does not exist by itself.

The main conclusion which should be made by a trader: currency moves the main part of its distance before the news release and just a little movement can be noticed when news was officially confirmed in case it has justifies the forecasts.

To be right, trader should observe only two rules:

  1. It is necessary to use strong movement during the whole week in direction of published news.
  2. You should be ready for reverse if the news did no justify expectations.

Added by Alexey Talesnik,

InstaForex Clients´ relationship manager

26.09.2009 Post in Trading

For some reason people inclined to believe, that making deals professional traders rely on just their own skills, experience and foresight, and trading via expert systems is predestination of newbies, who have not acclimatized at the market and gotten hand in making decisions yet. But actually these systems – so called expert advisors – are being written mostly by gurus of the currency market for the purpose of optimization their work and increasing its effectiveness. So the fact of using autoassistant by trader can not point out if he/she has experience.

It is impossible to give an unambiguous answer to the question, what trading will bring more profit: manual or automated? As the saying goes, to each his own. But with no doubt it can be declared, that trusting a good advisor, you make your brainwork much easier (because robot is able to process the information in a fraction of a second) and save time for more pleasant occupations (because it is unnecessary to watch the market fluctuations during long hours). Moreover, utilization of mechanical trading systems lets exclude reflecting of psychologic factor on your bargaining, because experts act according to the distinct algorithm, and no any human emotion can make them deviate from it. Benefit of computer systems is also in that they are adjusted to take the maximum gain while risks are limited to the utmost.

But everywhere there are its hidden agendas, about which you should better learn beforehand than meet with them during the process of EA’s exploitation. First of all, you have not to rely on a robot completely, because every program is imperfect and able to make a mistake. Paradoxically, but a specialist coding software to automatize trading process can put human factor in it.

The second disadvantage of advisors is in the scantiness of processing the data by them: at the heart of making decision scheme there is estimation of a certain indicators’ readouts. Thus, EAs are allowed not to take into account rates of some indicators, which can be determinative in the concrete market situation. The consequence of that is a decrease of risks’ control by human, which is also imperfection of expert programs.

I should also mention a trader’s estrangement from the market among the defects of advisors. Automizing of bargaining let us handle without permanent analysis of currency movements. In this situation trader is keen on watching deals, which are made by a program, not his own trading.

The notion of “good advisor” implies not only impeccably written code, but in first turn, suitability of his usage for some or another trading instrument in one or another market state. If you want an expert system to make a good profit, it should be right for you. But how to find such a robot?

The best way is to code an EA by yourself and put the ideas of your trading strategy in it. If learning of the programming nuts and bolts is too hard for you, you should work for a while to study at least the main principles, which automated system follows during the process of making decisions. Profitability of chosen advisor directly depends on how good you will get on with it.

Do not let loud advertisement to impose the praised EA on you. Not always the gain is equal to the number of its preferences described in the promotional announcement. You should also be careful with the offers to download a mechanical trading system for free. Sometimes, resources providing such services break author’s rights of the real software creators.

Added by Daniel Shchagin,

InstaForex Clients’ relationship manager

You can also find useful articles from website http://mql4.instaforex.com, which is dedicated to expert advisors.

08.09.2009 Post in Trading

Forex-trader, producer, promoter, PR-manager, speechwriter are the termes signifying the types of activity or professions, that introduced new ideas in our life during the last 15 – 20 years. We heard about many of them, instinctively felt that such types of activity can exist, about others we have known at first. For example, I doubt whether somebody knew who are forex traders in the USSR times. Perhaps, nobody or just few people did, because you could be deportated for so called “curency operations”. Nowadays it is the prestigious, respected and interesting profession, allowing earn good money and feel yourself maximally independent.

The content of the trader’s job in general is the trading of securities: safety stock, loan securities, futures, options and so on. The curency trader’s job lies in a trading of “valuable stocks” – the currency which can be issued only by the goverment. Forex trader works at the particularized international currency market Forex, trading sessions at which are held 24 hours a day, 5 days a week. The essense of the trader’s job is making profit from rate exchange fluctuations. He/she can either buy one currency, for example US dollar at the lowest course, then sell it at the highest course, or make it inside out, that is to sell the currency at the highest course and buy it when the course is decreased.

On the one hand, all happenning at the internstional foreign exchange market is simple. Rates of exchange (eur/usd, eur/gbp, usd/jen) can move just in two directions – up and down. But to guess a trend of the movement is whole science and skill. And if you mistake, you will punished immidiately – you can loss all funds at you deposited and these can be the whole fortune. At that this money could belong to other people. That is why playful moods of people attended at the market in some way are possible, but decisive significance is belong to the activities of the professionals. While taking a decision about market operations, this kind of people bases on their skills, experience and, certainly, special psychological qualities, without which any diploma, even Harvard Diploma, is just clean paper to be hanged on the wall instead of drawing.

Any formal knowledge about currency trading is relative enough. Trading education, of course, increases competence, insure against the row of the evident mistakes, but does not guarantee anything special. Moreover, currency market is served by lots of analytical agencies, giving daily forecasts about “where the trend will go” – today, tomorrow or in the foreseeable future. They do this work on basis of so called fundamental and technical researches, which let to look at the market from macroeconomic positions and from the point of view of the market prices movement, supposing that market has already taken into account everything by itself. So, Forex forecasts of these agencies also do not guarantee much. And they can allow a bug, which can force a trader leave the market one day after being kicked.

Professional trader differs from amateur in that he does not toy with market, but play, in other words, works for winning. That’s is why being inclined to risk, he nevertheless needs to control his actions and make them (open position, close position, set stops) in the basis of rational decisions, deep enough research and understanding of the market. For getting stable profit he/she should have a well though-out system of regulations of behaving at the market. Overincomes are lot of either dilettante who is lucky today and is not tomorrow, or professional of the high level, deeply understanding the market and even having possibilities to influence on it. However, for the overwhelming majority working at Forex there is no any ability to affect the market, and they can earn only when they reckon on fitting into an intense trend appeared at rate exchange and guessed by them. Such is the trading psychology, that trader’s mastery also concludes in his/her indifferent relation to the market. There are no places at Forex for heat, emotions concerning the winnings or defeats, “blind” opening positions, relying on luck. Forex is not a casino and you should work at it with clear mind, nerves of steel and fast hands.

Article was added by Svetlana Milyushko,

News editor of  InstaForex