For anyone interested in trading no matter what level of experience please read on. For FX Investors please go here.
Trading the FX markets is not easy. Its not supposed to be. If it was easy, everyone would be doing it and brokers would lose money.
You cannot always win when trading but you can always lose or at least you will always eventually lose if you do not fully understand what you are up against. You will only eventually win after spending many many hours, days and weeks staring at trading charts and understanding how and why prices move.
There is no one reason why traders lose but the overwhelming reason is because we are human. We make mistakes. We see trades that are not there. We are “certain” the price of EUR/USD should be lower so we look for reasons to short the pair. We ignore fundamentals. We ignore news releases.
We make discretionary decisions based on intuition. We are at the mercy of market psychology. We don’t close losing trades soon enough. We close wining trades too soon. We add to losing positions. We don’t set stops. We don’t lock in profit or we settle for 20 pips when the trade makes over 200.
Many traders are just bad traders.
When I first started trading back in 2006 I put aside £5000 as a limit to learn how to trade and if I couldn’t trade profitably after losing £5,000 I would walk away from FX. I was fooling myself. I can’t remember how long the first £5,000 lasted. I know it was soon followed by another £5000 which lasted longer. I measured my success in how long I could keep an account alive before blowing it up.
Eventually my accounts were lasting longer and longer and I was no longer refunding them with the odd £500 or £1000.
I was working out a method. Every trader needs a method. No two methods are identical. There is no one way to trade. There are millions of different methods and ideas that are used by traders. Most new traders without a method will adopt and adapt someone else’s method and make it there own.
It makes no difference what method you use as long as it works.The method I developed didn’t always work. No methods work without failure. Losing and winning are all part of trading. If you have a method that gives consistent winning results on back testing and stays ahead of the game when paper trading then you may be on your way to having a winning method.
Every method should be logical and most importantly programmable. If your method relies on conjecture, supposition, intuition and self-belief – you have no method. You are trading discretionary. Discretionary trading is not impossible but no-one without extensive and a deep knowledge of trading can trade discretionary. If you have literally years of studying charts and you have your finger on the pulse of every piece of major market news and you are experienced enough, then you may be able to trade discretionary but only professional traders can do this.
If you are new or inexperienced you must have a method that is programmable or in other words, capable of being turned into an Expert Adviser or EA. It doesn’t matter if you do or you don’t turn your method into an EA but the logic of your method must capable of being turned into one.
However, having a method is not enough. What you also need is discipline.
With a good method with good discipline – you will win.
With a fair method with good discipline – you may win.
A poor method with good discipline – you will eventually lose.
A good method with poor discipline – you may win.
A fair method with poor discipline – you will eventually lose.
A poor method with poor discipline you will lose very quickly.
Trading is all about mathematics and odds. You are not looking for killer trades by scouring charts 8 hours a day. You are looking for an advantage.
A method or strategy is built on observation.
You notice that when the price is at a level of support or resistance the direction of a trading pair changes.
You notice that the RSI is at a certain value.
You experiment and discard many indicators then you find one that confirms your theory.
The Traders Dynamic Index is reading above a certain level and there is a doji reversal candle on the H4 chart.
A method is like a jigsaw puzzle.
You can never complete the jigsaw because you don’t know what the picture is and you don’t know how many pieces there are but the more pieces you can join up, then the more chance you have of beating the market.
Remember, you are only looking for a tiny advantage over a coin flip.
If you can predict that the roulette ball will land more frequently on red than black then that will be enough of an advantage to beat the market.
So with a reliable method will find you a trade , the question now is have you the discipline to apply rules to that trade? Not every trader has the discipline required to trade and its something that cannot be taught and is tough to learn.
So what do you do if you have no reliable method and you can’t help taking trades on impulse?
Answer. Use an EA.
EA’s (Expert Advisers) take the hard work out of trading. With a good EA you can trade with very limited FX experience. More experience is better of course but if you think your trading is going nowhere then consider using an EA.
Questions about the FXP_EA.
Q. What does the FXP_EA do?
The FXP_EA has been developed over a long period. It is essentially a reverse trend EA and attempts to find trades that have exhausted their run and need to drop back. This image describes what is happening.
The BULLS have found support and they charge north. The BEARS stay where they are and they repel the BULLS (A).
The BULLS pull back and charge again but again are repelled (B).
The BULLS are now weakening and are having to pull even further back to pick up support and charge again (C).
Once more the BULLS are defeated.
The BULLS are now exhausted and the BEARS are fresh because all they have been doing is defending the area in dark orange whilst the BULLS have been trying to take it.
At this time we don’t know if the BULLS are finished but if they are the BEARS will leave their stronghold and attempt to drive the BULLS back to their support area……………………….and so it goes on.
Minute by minute, hour by hour, day after day – a never ending battle to push the price higher or lower.
The FXP_EA identifies these areas of support and resistance and using mathematical algorithms depending on the value of a basket of indicators, determines whether the BULLS or BEARS have had their day and whether its time to issue a trade.
All trades have as tight a STOP LOSS as is possible depending on the timing of the trade in relation to the support and resistance level. STOPS can be as low as 6 or 7 pips and are never above 40 pips. Any stop above 40 pips is manually adjusted down following instruction offered in the support videos.
Q. How do Expert Advisers work?
If you have a trading method you will need to test it. You will need to back test it and paper trade it. Back testing is testing the method over a chosen period of historical time and paper trading is seeing how your method stands up in a live environment using demo accounts or making physical notes – you are not trading real money when paper trading.
Back testing is long and laborious and mistakes are easy to make.
An EA simplifies this process. If you construct an EA based on your method then you can quickly access historical data and see how your EA would have performed over a time period of your choosing.
Your EA may have many variables:
Trailing Stop length
etc etc – there are limitless and endless possibilities and all will need to be adjusted and re-tested in order to optimize the net results.
Once optimized, the EA can be used on a demo platform to see how it works in a “real” environment. If the demo platform performs well then you have a product that can be used on a live account and hopefully will be successful.
Q. How will the FXP_EA assist my trading?
The FXP_EA will save you hours and hours of pouring over charts looking for trading set-ups. The FXP_EA finds high probability set-ups and if all the conditions are met, will trigger a trade.
The FXP_EA is also adjustable to look for 3 different levels of trade depending on how often you want the EA to find you a trade.
The FXP_EA works across all FX pairs but has been optimized to work on low spread instruments but all major, minor and exotic pairs are available.
The FXP_EA works with every broker we have tested it with (with varying results it has to be said depending on the broker).
The FXP_EA is currently semi-automated. It will set stops and take profits and if just left it will generate a steady growth curve , however, in order to maximize gains and minimize the chance of losses some level of intervention is advised. This is no more than adjusting profit targets and stop losses and being aware of volatility around news releases and comprehensive training videos are available to show you what to do.
The FXP_EA is not yet available and will only initially be made available to 100 people who will be first Forex Portal members. Those 100 people will receive a trial version of the product to test on either their demo or live accounts. If you have no account, there are instructions on how to open an account with one of our preferred brokers.
The trial product will expire after two weeks and all 100 will be offered a chance to use the EA for a heavily reduced fee.
This product is available to use. It is not available to buy.
We have yet to decide on how much we will charge to use the product as that will depend on the feedback we receive from the users but the 100 users will receive a 50% discount at least on whatever price we make the EA available for.