Follow many currencies?

Many people ask how emerging economies should follow? When you begin to understand that they are overwhelmed with too much information. You can start thinking about all the different countries, depending on different economic data, especially from all the countries comprising the euro. You have not created a business model and philosophy does not digest and understand it. The truth is that there are a lot of financial information that the market does not care so you can draw directly from your list and do not worry about it. For example, the market does not care about the number of Japanese consumer price index, the market has a lot more important things to worry about.
When you have knowledge of how to determine the sensitivity of the market, you can monitor currency pair that you can know what is important and what is not.
Too much work?
While some entrepreneurs believe that after working eight major currencies too. Therefore, the USD, EUR, GBP and CHF, JPY, AUD, NZD, CAD work too.
If you feel discouraged me and I will only recommend starting with the U.S. after the major currencies as well as another of your choice, preferably in euros or pounds. So you can start at least after every other way the economy is to understand the strength of world economic currency.
When I started there after, I decided to do everything at once. The reason is that I do not want to spend six months in a single currency, then turn the other six months later. It will take years to get well at all. I do not want to take 5 years to learn a global macro.
I want to know how the forces of global macro and economic diversity can interact with each other and where everyone in the business cycle, the cycle of interest and how it affects the price.
Troubled global macroeconomic situation
If you think this is too much work then you can only choose to follow one or two countries. The only problem with this is that marketers get a description of only one or two types of economies in which the business cycle. The risk you run if you select only one or two currencies to follow is that you stick to trading the currency pair that is the trend and very unstable. There is nothing wrong with marketing nothing unstable currency pair. There are many ways to trade in a volatile market.
For example, if you choose to learn only the USD and CAD, then you become an expert in trading USD / CAD. And you definitely want to get some good business. But you will not achieve great 1000 pips global macroeconomic environment for the currency pair USD / CAD is not conducive to a great cause 1000 points. Interest there are only a big step.
Large movements of global macroeconomic
On the other hand, if you follow all the coins, then you will be able to benefit from the large difference between monetary policy in the U.S. and Australia to play the global trends in macro AUD / USD.
After all you want to trade volatility as a potential explosion is the largest and most viable. If possible, the largest ongoing acne. If you're stuck with only the knowledge of CAD and GBP economic environment, then the chances of achieving global trends in the current macroeconomic environment has been reduced, because the British economy is still weak and have just the opportunity for relaxation volume of traffic they deteriorate further. Canadian economy is doing better than the U.S. because it is a commodity economy, but have not increased, but due to slower U.S. growth and a strong Canadian dollar remained on their economies. So you have volatile price action on GBP / USD and USD / CAD currency pair.
Therefore, when I heard the news, expectations and global economic, chose to do it for eight currencies simultaneously. So I got exposure to all the different economies and how economic and international economic environment has affected everyone. I got exposure to risk and how to avoid the risk of them all. I get exposure to trading in different market environments, the Central Bank intervention, how the economic crisis in the currency pair, etc.
Not only develop tunnel vision and focus on one or two big currencies.
I'm just learning a lot about little.
I want to know a lot about multi-currency, with the right system for assessing the sensitivity of the market.
And so you can see great progress in the various currency pairs, not restricted to one or two pairs. You can turn your trading capital to benefit from changes in macroeconomic conditions globally in all different pairs

Sacrifice of a trader

Looking back at my trip to the dealer finally hit me that many of them are ready to make the sacrifices necessary to become.
The most successful traders have to sacrifice a lot of time in their early years, so they have more money than their neighbors in the years after treatment for a good trader.
You have to sacrifice now for more money and success that your neighbor tomorrow.
There are many sacrifices that entrepreneurs may choose to do to succeed.
If you choose to spend the holidays this year and instead invest the money on hold, you are not sacrificing a lot of people do. You want more money for your trading today, so you can test your business ideas and get a feel for the market with money to live action. This increases the chance you have a revelation of order flow.
When you select a 3-week vacation that you are involved in a heavy flow of daily trading, and research spending, sacrifice, and not many people make.
If you choose to go home from your day's work tired and exhausted, but instead of watching TV, you put a summary of the flux of the order of market action, you make sacrifices, not many people do.
If you choose to wake up in the middle of the night before because you think the explosion of trade volatility is going to happen, you make sacrifices.
If you choose to cut funding over multiple representations of your care, you make sacrifices.
If you choose to spend less time with family, because you are trading order flow and execution of research, a sacrifice.
You make the necessary sacrifices now much more than most people in the future.
You make sacrifices today to become wealthy in the future.
You delay gratification today so you can very great satisfaction that most people my wildest dreams to have when you finally succeed.
People who choose not to sacrifice to become an operator is not possible to achieve success. You may not need all the sacrifices. But chances are that you need to make sacrifices in life.
Many traders make sacrifices and prospective cost-benefit analysis.
If someone is trapped in a cycle of novice operator elects to take a leap of faith to take the order flow analysis to try, they make sacrifices. They want to get out of their comfort zone to something new, whether the real reason why the market moves to try.
If someone chooses to 20 hours per week surfing the various trade forum to find the next hot robot or an indicator for shopping, rather than building a strong foundation of negotiations, they make a choice.
If someone chooses to pass around violin with consultants Metatrader code, or change the parameters of the stochastic and moving average, instead of carrying news, sentiment and the macro world, they make a choice.
If you make a list of people who succeed and those who held the poor, you will see that those who managed to sacrifice, and doing the right thing. He gives 110%
Those who do not are those who do not have the necessary sacrifices and can not do what it takes. They gave him a small portion of their time and attention, and thus fail.

Order flow trading

Someone asked me the question, and wanted to know how the order flow, liquidity and efficiency to be determined.
Order Flow
I order the flow of the transaction flow. Do you want to enter a command and executed. This may come in the form of market orders, limit orders hitting the stands. Or come in the form of a limit order becomes the best limit order. Do you want to flow. Flow of a series of transactions in the market, and implemented. Or are there in large enough that you should consume limit orders at various prices. But a series of transactions and limit orders to touch at various price levels.
If a market order of $ 100 million consumers because they consume liquidity in the limit laws.
Order flow is usually in the form of market orders. These aggressive commands are generally necessary in order to drive the market.
There are other ways to make a transaction, or only a small number of transactions.
For example, if the limits of the best bid and best offer for a different limit switch, without the transaction price levels, this will cause prices to move. This is usually the time required is usually associated with a lack of liquidity and news. While some transactions are usually at different price levels, even if small.
Liquidity
I love a lot of liquidity to limit orders. If you use a limit order $ 50 million to 50 pips from market price, adding liquidity. Limit the number of the best order of liquidity in terms of size, and they distributed between minimum fluctuations.
For example, if $ 100 million limit order is available on the EUR / USD is the best bid / offer, $ 100 million will be distributed in an increase in the pits, this is a very liquid market.
There must be many orders to limit the liquidity to consume. Because if a large market order arrives, and you want to do, you need to seek liquidity in limit order.
When spreads are tight, it may indicate that a liquid market. But it is also possible that a tight spread, pray bid / best and next to a small limit order. It is likely to spread in EUR / USD a pip, but only 10 million dollars in cash pip.
See my article on what a liquid currency pairs.
The best is when market liquidity and tight spreads a large number of limit orders available on every pip.
Inefficiency
There are many inefficiencies in the market. There are opportunities for arbitrage, not the stop loss, etc.
Weak points you want to trade large market movements. The market moves higher, the greater the efficiency of my head.
Big market moves enough =
Do not forget that there is already a major market force, both in liquid and liquid environments.
Most likely, the market moves 300 pips and consume a large border to prevent the price movement guarantee. This is both in the country, sooner or later, as long as willing to take command of the limit order.
There is also a large market movements in illiquid environment, where a small limit order occur.
You can use both. Big market moves that occurred when the consumption of large limit orders are generally the most durable. This is usually the most durable because they are usually in the news / mood / core / macro forces on their side. This means that the result is a significant step

Win rate and risk reward part 2

Frequency Trading
Already a trading system of the above. It's all pretty discretion, but the system is fixed.
You should be aware of the expected trading frequency.
Trading system to win most of the fire: low prices, high reward for the Risk System.
Trading system of the fire, the average signal: Winrate high-risk low-reward system
Trading system of the fire in the complete absence of signal: Winrate large, high-reward venture system.
Logical, no? The signal system was shot in one of the lowest in the most profit potential. Shoot your system, the average trading system more profitable. And finally a shot at the least sign of the most profitable.
Trade my winrate is low, high reward to risk ratio of the system, and keep me busy and occupied while waiting for the opportunity to go to a large vein winrate trading system. This is my trading philosophy.
What kind of system a lot of hedge funds and large trading? Many hedge funds trade at low win rate, high reward to risk ratio in the system. One reason is that they do not know how to trade better. But the bigger reason is that greater trade and position worth hundreds of millions of billions of dollars, this type of trading system that is capable of meeting the liquidity constraints and still generate a decent amount of wins is low signal, high risk-reward systems.
Also note that if you try, if the trade is a huge amount of capital above system, you can even destroy a profit because the market system can not handle it. Or what will happen, you can reduce the frequency of trades in the system, only those who can handle the large amounts of capital.
For example, if you have a trading system, which is 80% winrate, and won three times what the risk. The signals generated 25 per year. The signals generated 25 per year, if you try to trade for a small / mid-caps, say, a million dollars.
If you decide to trade such a system is a huge amount of capital, say $ 1 billion. Or you will destroy the system. Or even more likely that the number of signals that occurs every drop of the year. So if you are 25 years of trading signals every 1 million dollar capital system. If the "commercial" system $ 1 billion in capital, taking into account the new constraints and the liquidity effect of a larger order, you only get your 10 transactions per year.
How do I know these things?
I just know.


Notice that I did not mention anything to win the low rate, low risk reward ratio of the system, either by a high winrate, the risk reward ratio below 1:01. He did not mention them because they are not worth trading.
There is no reason for the trading system, which is a win rate of 80% and the risk-reward ratio of 0.50
There is no reason to trade the system a 30% winrate, where the prize is only twice the loss.
Not traded in the system.
Instead, a better trading system.


I hope you like the article.

Spot Forex and Future Contracts

I’ve heard a lot and have been discussed a lot about Futures contract and Spot Forex. A lot of people try to argue that futures contracts are much “better” than Spot Forex. The term “better” here could interpreted in a way that it’s easier and more transparent to trade with. In this article, I’ll try to break through the argument.
People said that futures contracts are traded on a centralized exchange but likewise spot forex is not being traded on a centralized exchange.  People talk about the “shaving” “shady” activities made by brokers since there is no centralized exchange and also regulated exchange. People talk about how broker profit from event such as news to widen spread or even to catch stoploss. Those who talk to me use such argument to talk down spot forex not to be traded with and there’re little way to profit unless you are a broker.
It’s correct that spot forex is decentralized market. From what I’ve seen, pricing is also a little bit different from broker to broker; and out there, there’re a lot of shady brokers with no real information who take advantage of trader to benefit themselves when they shading price and widen spreads or even take out stoploss when price isn’t reached there yet.
But the thing here to talk about is illiquidity and widening of spreads happened and currently happening a lot in futures contrack as well. First, we need to understand why spread is widening. Spread widening happened when there’s illiquidity in the market where there’re little sellers and buyers. That’s why we see spread in spot forex often higher during Asian market.
Forex futures has better spreads and more consistent pricing from what I see, therefore if you are a scalper or a short-term trader, forex futures could be your choice since a few pips could make such a difference. Most of my friend are arbitrage and scalpers in forex futures market and they are doing well since pricing is so consistent.
But the fact is that scalpers or super fast trading are not where the big money at. They are just a small swing that is a plafrom a big swing that is concurrently happening.  I wonder why they are looking for 5 pips instead of 500 pips without much of that headache.
Scalpers may be trying to catch 5 ticks on Euro Futures Contract but I’m here to catch 50 pips on EUR/USD spot market. And for me, 0.5 pip of spread difference doesn’t really matter because I’m there for 50 pips, not 5 pips. As for 50 pips move, you’ll have more room for liquidity to play out rather than 5 pips move. For 5 pips move, a sudden swing could wipe you out. I’ll happy to let the arbitrageurs and quant funds try to grab that tenth of a pip or half a pip between platforms.
There’re theory about forex brokers do stophunting. I believe that they don’t do do that since they don’t have the required capital to do that. People who are doing stop-hunting are real traders, big traders or our competitor, they have to catch retail traders stops to benefit themselves and to send out a telegram to other big traders that they are actually stop-hunting and ready to move in another direction.
Remember the time when George Soros broke the Bank of England, he didn’t use futures contracts.  He used the spot forex market.  George Soros sold a few billions worth of pounds, profiting from the UK government's reluctance to either raise its interest rates and then converted them into Deutsche Marks.  At that time there are also difference of pricing from broker to broker.  But do you really think that he would care about it. He’s in there for the long-hunt and made a fortune and a few dollars difference won’t affect such a fortune. A little off spread cents wouldn’t have any significance either
Therefore I believe a few pip difference difference in pricing doesn’t really affect anyone performance since the moves are all the same.
I believe during the Soros time, in 1992, the spot forex markets are just as inefficient as today, with much more liquidity to boost. Therefore for those of you think futures contracts are “better” choice, please think it over.

Win rate and risk reward part 1

Trading system and the position of many sizes depending on what level you are and what your reward is victory for the risk ratio.
Statistic is quite simple huh?
Steve Cohen, billionaire hedge fund manager using simple statistics as well. In a CNBC article: What Works Now SAC Capital, Cohen said:
We keep score with simple statistics, such as baseball. You obviously want your winning trade to make money more than you lose losing trade.The article then proceeded to say that the merchant is evaluated based on two basic dimensions: their win / loss percentage and the relative size of their wins and losses.
There are different flow systems that you can develop and trade. Some of them have a high winrate of 70% + but low risk reward ratio with the winner only made about 1-3 times what you bet.
Other stream order system has a low level of win / average around 30-60%, but the risk reward ratio is very high with the winner to make more than 4 times what you bet.
Then there was the remarkable trading system that has a high winrates SECOND appreciation for the risk ratio. They are the ones where you can go to jugularis on.Soros knew about this when he broke the Bank of England and take full advantage of both high perceived win percentage and high yield potential.
There are important differences between each of the trading system you need to know. There are certain market principles that if you try to challenge them, the market will only destroy you by giving you a lot of damage, loss, or blow your account.
Win High Level, Low Reward for Risk System
Listed system types can be listed with the percentage of low risk, or risk a high percentage. Because trading is a high winrate, they can not happen often. Therefore, if you choose to trade only with the percentage of low risk, you may not get the most bang for your buck.
Also because they take the risk reward ratio is low, the percentage of their business with low risk will not make you much money.
For example, say you have a high winrate, low appreciation of the risk ratio with 90% winrate, the risk-reward ratio of 1:1.
If you only trade the system with a 0.50% risk per trade, then you only make a maximum of 0.50% per trade. You can not make more than that in the trade as a reward system for low risk ratio ratio. The strength of this system is not in the business of winning. This strength in a large number of commercial consecutive win.Consecutive profit.
Therefore, with this system, you may want to try to trade using the system at greater risk of a trade of 0.50%. For example, if you listed the same system with the risk of 10% per trade of 0.50%, then assuming the same series of trade and trade your performance will be much higher return.
Of course you run the risk of suffering a loss in the first trade down 10%, which is undesirable. But the triumph of high levels of the system should provide compensation for the next series of trade.
Trading system with a high win the desired level and is generally preferred because of low probability trade suffered consecutive losses.
This is the type of trading system that is usually used if you want to quickly grow from a five-digit account number to the range of six to one million dollars in coverage.Once you enter the range of millions of dollars of liquidity constraints and protection of your capital becomes more important and you are under the risk of a trade Ratchet.
When you have to take account of five to one million figure you do not want to bet too much per trade. You do not want to bet your lifestyle.
The only goal of using high leverage and high risk of a trade so get your account up to a high enough level where you can Ratchet the risk of a trade and still achieve a significant amount of money.
Low / Average Win Rate, High Reward to Risk Ratio
This is the type of trading system that most traders are trying to grow. Specific to your technical indicators or chart patterns traders are able to develop a system with about 30-60% winrate, but with a very large winners to compensate the loss of trade.
There's nothing wrong with any system type. I did the trading system as well.
Due to the lower level you win, you have the possibility of consecutive losing trades is much larger. Because chances are you suffer consecutive losing trades is greater, you MUST use a low risk trade.
Try to trade this system using a commercial high-risk will turn into a disaster. You can catch a good winner, but volatility is obstruction of hair.
Say you have a system with a winrate of 30%, and your winner is six times what you bet.
If you decide to trade using a risk of 10% per trade, then you may be lucky and catch the winner in your first trade. If you have your account up to 60%. If you catch the other side of the losing series in a row, then your account will begin to decrease 10% per trade. And because you only have win 30% level, you can have 3, 4, 5, or 6 consecutive losing trades. If the series winner lost first place before you, you can go down 50% from your account before you see your first winner.
That's why this system is designed to be traded with a low risk trade. You can only truly open up the potential of this system if you use a low risk trade.
Low to win the low risk level requires the total trade. That is the main rule.
High rate winch system should not require a high risk of total trade. You can easily trade a high level using the low-risk win a trade and still get significant numbers.However, if you truly want to open up the potential of high-value system to win, then you should set the pot in addition to capital and trade system with a high risk per trade.
High won the high risk level requires total per trade if you want to unlock their full potential.
Win High Level, High Reward to Risk Ratio
Types of trading systems are some of the coolest around. This is the kind you dream of trading in your career. This is the moment when you can go to jugularis on them.
This is the type of trading system where you can have 70% + stage win, but still have abnormally high reward to risk ratio with a potential yield of more than five times what you bet.
This is the type of trade where you can make 50%, 100%, or 200% in a single trade.
Types of trading systems are very rare and do not shoot that often signal. But when they do so, you should take full advantage of them.
Types of trading systems should not be listed with a high risk per trade. Well you can do trading with a low risk trade.
However, if you want to get the full potential of this trade you will need to use high risk per trade.

Handling the losing streak

Although the efforts of everyone in the formulation of trade, monitor and control your emotions, the period of inevitable loss can come. It is important to know the different strategies you can use to manage the time to lose. It is also useful to know the variables that can be tweaked to determine the style that suits you.
There are many ways dangerous and ultra safe way to handle the withdrawal period. Your choice which one you want to use.
You can change the variables
A. Trading Systems - If you do not believe in your trading system more, then of course you can switch to a system of completely new business.
Two. The risk of trade - can change the risk by trading more or less.
Three. Frequency of trade - can change how often you place an order on average higher or lower.


Strategies to attract the funding period
Now knowing the above variables, you can mix together to form a variety of strategies that can be used to manage the withdrawal period.
There are about 7 different ways to handle a series of losing trades. Seven different ways that you can draw period.


A. Major risks to business and commerce Increased Frequency trying to make money faster.
Suppose you're risking 2% per transaction and placing an average of 5 transactions per month. You fell 6% and try to recover. You increase the risk of trading at 3% per transaction, and at the same time you increase the frequency of exchanges on average 10 transactions per month.
This is definitely the most dangerous strategy that can feed itself and leads blown in the account.


Two. Increased risk of the trade to try to get money. You keep trading the same frequency.
Suppose you are risking 2% per transaction, and placed 5 trades per month. You fell 6% and try to recover. You increase the risk through trading up 3%, but keep the frequency of exchanges even close to 5 transactions per month.
This is the second most dangerous strategy, because while you hold the frequency of exchanges as well, you still increase the risk of trading.


Three. Keep the risk of the same trade. Increase the frequency of trading.
You do not take more risk in your trading. But you increase the frequency of exchanges in an effort to find other opportunities for a month. This is similar to the risks and dangers to number 2 above.


4. Keep risk to the same trade. Keep the frequency of exchanges as well. You just keep going and follow your system. No change.
Suppose you are risking 2% per transaction, and placed 5 trades per month. You fell 6% and to recover, you do not change anything. You still run the operating system you suspect you have an edge in the market. After all, if the system is good then your transaction will heal itself without changing any settings.
If your business system has real advantages, and you risk the right amount of trade which does not cause a significant loss if a series of consecutive losing trades happen, then you just have to keep doing what the risks and have the same amount and get the same job. Your membership will be recovered.
This is the strategy most likely to be implemented. It's right in the middle of a very dangerous strategy and ultra safe.


Five. Keep risk to the same trade, but a lower frequency of Commerce. This is starting to get more secure.
You do not risk more about your business. But you reduce the frequency of exchanges. So if you were to place five trades per month on average, you can cut two or three. Begin to be more selective in your trade and try to find the big winners. The best risk reward trade.


6. And finally, the safest is to reduce risk through trade and reduce the frequency of exchanges.
With this approach, you reduce risk by lowering trade and reduce your rate. If you have used a 2% risk per trade to five trades per month. You drop to 1% risk per trade and just looking for places 2-3 times per month.
Now you may ask, how are you supposed to recover from a draw when you reduce your risk per trade and reduce the frequency of exchange? This is where the big winners in. nailing Nailing of 5R, 10R, the 20R trade. You are more selective in your trading so hopefully your win rate increased slightly and / or your winners bigger.
This is by far the safest way to recover ultra withdrawal period.


There is another special method that involves a greater risk of the trade, but at the same time reduce your conversion rate drastically. So if you are risking 2% per trade and put the 5 transactions per month, you risk 5% per trade, and only put one or two transactions per month. How risky is this strategy will depend on what your system winrate. If you win the level very high, then it can work. If you win the level is low, then it could backfire and you have to choose one over the safety risks involved with reducing the trade and / or frequency of trading down.
The final method is to reduce the risk of trade, while increasing the frequency of exchanges.
Explain the relationship between risk and reward rate of victory in my previous post.