Author: rcanessa - Page 58

What is a Robust Trading System?

The difficult part to begin to trade in any market is to define the strategy or trading system that we are going to apply to make money, as there are many trading systems but:

Which trading systems are really robust?
What are the main features of robust trading system?

A robust trading system is a trading strategy that is designed to perform well under different market conditions and over long periods of time. A robust trading system is not overly sensitive to minor changes in the market or to specific market conditions, but rather has a built-in flexibility to adapt to changing market environments.

A robust trading system typically involves a combination of different trading strategies and risk management techniques that are tailored to the individual needs and objectives of the trader. The system should have clear rules for entering and exiting trades, as well as a well-defined risk management plan that includes strategies for managing drawdowns and minimizing losses.

A key characteristic of a robust system is that it has been thoroughly tested using historical market data to ensure that it has a high probability of success in the future. This testing should include multiple market scenarios and time periods to ensure that the trading system can perform consistently over a wide range of market conditions.

Overall, a robust system is designed to help traders achieve their trading goals while minimizing risk and maximizing long-term profitability. By having a well-designed and thoroughly tested trading system, traders can have confidence in their ability to navigate the markets and make informed trading decisions.

We can do a practical exercise to evaluate the robustness of two well-known trading strategies:

Ascending Triangle Chart Pattern

by rcanessa

The Ascending triangle is a common chart pattern that is used in making market technical analysis and consists of a clear shape with 2 trend lines. This formation is used by many traders that operate regularly in financial markets like Forex. When it comes to ascending triangle, 1 trend lines is set horizontally which prevents the rate from going higher whereas the 2nd trend line joins the increasing trough series. Investors march forward to take over the long positions while the rates break towards the high resistance.

As the ascending triangle is usually deliberated as a continuation chart pattern, it is found during the consolidation period during the uptrend. When the breakthrough happens, buyers keep sending the rates insistently for the assets with higher value and probably they will be of higher volume as well. The pricing objective is usually fixed to the entry rate complementing the vertical height in the triangle.

Symmetrical Triangle Chart Pattern

by rcanessa

The Symmetrical Triangle is a chart formation that is also addressed as a coil and it is generally formed while the trend occurs as a continuation pattern. This pattern incorporates 2 lower highs and 2 higher lows. While the points get connected, then it forms a Symmetrical triangle by means of line coverage. Moreover the connectors remain wide in the start and it gets narrowed down at last. Although it is a trend continuation pattern, many reports have shown the importance of symmetrical triangle and even they play a dominant role in the trend reversals. They result with a continuation with the present market trend. Never mind whether it is reversal or continuation, the succeeding moves could be fairly discovered by means of a potential breakout.

Generally, price action within the triangle is usually identified by zigzag movements of three waves. This is better understood if one observes the following example:

Mirror Trading Platform of Trade24

by rcanessa

The Forex broker Trade24 currently has an automated trading platform called Mirror Trader (it is based in the concept of Mirror Trading and was developed by the company Tradency), which allows the clients of this broker to trade in the Forex market using trading signals generated by systems developed by expert traders with years of experience in the market. Likewise, the investor has the option to trade on the basis of trading signals generated by real traders. Trade24 is a broker which specializes in transactions with currency pairs (Forex), commodities, CFD and other instruments.

The trading signals generated by the automated systems and the traders who used this application free the investor from the task of analyzing the market, open positions, managing open positions and finally close these trades in order to take profits or limit losses. Because these are systems that operate without the intervention of the trader, are an excellent option even for those investors with little experience and knowledge of financial markets that wish to exploit the enormous potential of the Forex market for profit.

Gold Prices

by rcanessa

Gold is one of the most popular forms of investment today. It is used by many investors as a safe haven during times of financial instability. Large and small investors have large amounts of money placed in physical gold or trading instruments based on this commodity. The following chart shows the real-time price of gold in the spot market. XAUUSD … Read more

Mirror Trading Platform MyFXbook Autotrade of ICMarkets

by rcanessa

ICMarkets is an ECN Forex broker in Australia that has a license from ASIC, the regulator of financial services in that nation. This company offers ECN trading conditions with variable and low spreads, fast execution of orders, and 0 requotes. Its Metatrader 4 platform is connected with its main liquidity providers, which allows the trader to trade with low spreads that can reach even the 0.0 pips.

Among its additional services, ICMarkets offers its customers the ability to connect their trading accounts with the Mirror Trading Platform Myfbook Autotrade, one of the most complete and used in the sector. This service allows the trader to copy all transactions generated by any trading system selected. Each copied trade is executed directly on the MT4 account of ICMarkets using the capital deposited by the trader. Among the advantages of Myfbook Autotrade, we emphasize that the trader does not have to install any complex software or pay any commission based on trading volume. The process is very simple and involves connecting the trading account with Myfxbook and selecting the system or signal provider you want to follow.

ICMarkets ECN Forex Broker – Complete Review

by rcanessa

ICMarkets

– ECN/STP broker from Australia specialized in Forex and CFD

-Regulated by organizations such as ASIC

-Tight spreads and low commissions

Visit Broker Website

ICMarkets – Broker Review

ICMarkets is a regulated Forex broker from Australia which was founded in 2012. It is an ECN broker specialized in Forex and CFD trading which offers more than 50 currency pairs and excellent trading conditions including very low and variable spreads and fast executions. ICMarkets offers direct market access (to the main liquidity providers, including major banks) which in turn provides its clients with access to market depth with Level II Quotes. In other words, it is a true ECN Forex broker.

Also, this company offers the advantage of being regulated by ASIC.

Over The Counter Markets (OTC)

by rcanessa

Over The Counter trading refers to financial instruments trading on a different context than organized financial markets or exchanges.

The term OTC trading or OTC market can be used for contracts on financial instruments made directly between two parties and also for trading with derivative financial instruments traded through a dealer and not through a centralized market (such as the stock exhange).

For example, a futures contract is a standardized product traded in the futures market while a forward contract is an OTC product.

Alligator Technical Indicator

by rcanessa

This indicator was designed to detect market trends by reading the distance between three moving averages. The Alligator is a very dynamic and easy to use technical indicator. It was discovered by Bill Williams who presented it in the book Trading Chaos (published 1995 by Marketplace Books, Inc.). This is a powerful indicator that combines moving averages, nonlinear dynamics and fractal theory in a technical indicator that is widely used by traders for confirmation of market trends in many financial markets such as Forex.

Most of the time, the market remains stationary. In fact, it is estimated that only 15 -30 percent of the time, the market moves with a clear trend either up or down, which are the periods when most traders take their profits. For this reason, the famous Bill Williams sought to develop an indicator that would serve precisely to provide entry signals in the periods when the market is most active, mainly those in which the price moves with a definite trend.

Fractals Indicator – How to use the Fractals Indicator?

by rcanessa

What are fractals?

Fractal geometry, defined by mathematician Benoit Mandelbrot, is a geometric figure that can be decomposed into parts, each one of these parts identical on a smaller scale to the original figure. However, the “fractal finance” applied to technical analysis is a geometric pattern that can be observed regardless of the time frame used, either 1 hour, 30, 15 or 1 minute. There are some books on this subject and one of the most popular is “Trading Chaos” that was written by Dr. Bill Williams. In this book, Dr. Williams entered two important concepts, the “Fractal UP” and “Down Fractal”, which can be used as support and resistance respectively. When both formations are crossed by the price, that indicate new levels for prices in both bull and bear markets.

The “Fractal Up” (it indicates a possible resistance), defined by Williams (Using a bar chart) is one pattern where the central bar has a maximum price that is greater than the maximum of the two bars to the right and higher than the maximum of the two bars on the left. On the other hand, the “Fractal Down” (it indicates a possible support) is one pattern where the central bar has a minimum price that is less than the minimum of the two bars to the right and less than minimum of two bars on the left. We can observe the ideal fractal in the image:

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