Positive Mathematical Expectation

In Trading, what matters is not how profitable your system has been, but rather how certain is it that the system will show at least a marginal profit in the future. Therefore, the most important preparation a trader can do is to make as certain as possible that he has a positive mathematical expectation in the future.

Trading Tips

1) Plan your trade and trade your plan
2) Risk Benefit ratio should be >= 2
3) Always put take profit and stop loss limit
4) Lose 2-5% of your effective capital, never more
5) One second spike is enough
6) Avoid aggressive position size

Faith, hope and prayer

Faith, hope and prayer should be reserved for God — the markets are false and fickle idols.

Forex Strategy Using 200EMA: Extremely Powerful Yet Simple For New Traders

The 200 EMA (Exponential Moving Average) can solve the problem.

The 200 EMA is one of the most popular indicators of all time with Forex traders the world over, and for that reason alone is worth noting due to the psychological effect on the market place price can have when hovering around the 200 EMA.

To use this very powerful Forex strategy, create charts on 3 time frames: the 4 hour, the 1 hour, the 15 minute.

Now plot a 200 EMA indicator on each chart and, as a suggestion, color it red, for easy visual impact.

Preferably tile the 3 windows containing your 3 charts into a vertical fashion so you can see the 3 time frames next to each other. It will squeeze up the information on the charts somewhat but for the purpose of this strategy that doesn’t matter.

Now scroll through the various currency pairs you like to trade. If you prefer to trade only pairs with a smaller pip spread, they amount to about 9. They are:

EUR/USD; GBP/USD; USD/CHF; USD/JPY; EUR/JPY; USD/CAD; AUD/USD; NZD/USD; EUR/CHF

What you are looking for is any currency pair that bucks the 200 EMA on the 15 minute chart.

So for example, look at the EUR/USD pair and note the position of price relative to the 200 EMA on the 3 time frames.

If price is well above the 200 EMA on the 4 hour chart, well above the 200 EMA on the 1 hour chart, but BELOW the 200 EMA on the 15 minute chart, price is bucking the trend.

The overall trend is up, price has temporarily gone against the trend and is currently in a retracement.

Using the fundamental trading principle of “buy the dips in an uptrend", “sell the rallies in a downtrend", look for a suitable entry point.

In the example given above you would look for an opportunity to buy the EUR/USD, perhaps watching for a candle signal that price has exhausted it’s downward momentum, bucking the 15 minute chart 200 EMA and will soon resume it’s upward momentum.

This is an easy exercise and it can be done once or twice a day, taking just a few minutes.

Once you see price bucking the 200 EMA on the 15 minute chart, whereas it is on the opposite side on the 4 hour and 1 hour charts, sit up and take note. Watch carefully and grab the opportunity to get in and make some pips.

After a little practice you will see how extremely powerful this simple Forex strategy is - certainly deserving a place in your trading tool kit.

Michael A. Jones is a writer, webmaster and Forex trader.

Do you want to make consistent profits and take your trading to the next level? Learn from Michael's experience:

http://www.vitalstop.com/Forex/forex-course.html

Beginners click here:

http://www.vitalstop.com/Forex/start.html

Fibonacci Forex Trading - Application to the Forex Market

The Fibonacci number series is ubiquitous. It is everywhere, whether one is aware or not. Not only was it prevalently found in older cultures (Greek,Egyptian, and Hebrew), in elements of life (DNA molecule and the human body), and even in recent studies of the entire universe, Fibonacci numericalrelationships play a very significant yet subtle role in market action and hence, trading. Even more, Fibonacci Forex trading has actually become theplatform of a majority of Forex trading systems and is used by numerous professional Forex brokers all over the world. Yet, it may well be asked whya relatively simple series of numbers would play such a strong role in the Forex market with traders quite often separated by culture and greatdistances. The difficulty in perceiving the possibility of this at least in part comes from a human tendency to believe itself to be independent andsomewhat separated from nature. Certainly, when we are injured, sick, or close to death, the influence of nature in our lives is quite obvious.However, under 'normal conditions", our intelligence gives us a sense of being "above" the control of nature, especially in a collective sense and blindsus to elements of the truth.

The truth under discussion is that changes in market prices largely reflect human opinions,expectations, and valuations.A series of studies, published in the 1980s by mathematical psychologist Vladimir Lefebvre, demonstrated that humans exhibit positive and negativeevaluations of the opinions they hold with 61.8% positive and 38.2% negative. If you recall, these two numbers (61.8%/ 0.618 and 38.2%/0.382) areimportant Fibonacci ratios. This as well as other related studies suggest that Fibonacci numbers are intrinsically rooted in a trader's psychology.Furthermore, other research has shown that markets are perfectly patterned, explaining that human traders, being part of nature, create geometric likerelationships in their behaviors, even if they are not aware of it. Therefore, the real truth here is that Fibonacci ratios affect all traders, whether theyconsciously apply the numbers or not in their trading ! This has a very important implication for the Forex Trader !!! Since these ratios as well asother Fibonacci numerical relationships appear frequently enough in the timing of highs and lows and price resistance points, adding Fibonaccievaluations to technical analysis of the markets may help identify key turning points, and significantly improve trading results. Forex traders cangreatly benefit from such mathematical proportions due to the fact that the currency price fluctuations observed in Forex charts, where prices arevisibly changing in an oscillatory pattern, are known to follow Fibonacci ratios very closely as indicators of resistance and support levels. Additionally,it is important to understand that Fibonacci analysis is a LEADING indicator. This means that such analysis will provide a direction where the marketwill advance to, not where it has gone to date, as most other indicators yield. This can be a very real advantage. What does this means in practicalterms ? How does a trader actually apply Fibonacci Forex trading in whatever plan he uses? As can be seen on a typical Forex chart, the currencyprices are constantly changing, following an oscillatory pattern with peaks and valleys. The limit of the peak is called resistance while the valley isknown as support. In order to find, say, the 0.328 ratio level in an example, the size of the drop (or rise) is measured over the time of interest. Thatvalue is then multiplied by 0.328 and then added to the total drop (or subtracted from the total rise). This defines the anticipated retracement leveland provides good numerical probability of where the market will retrace to and find new support or resistance. Once this level has been determined,the strategy can be planned which theoretically will allow a trader to yield a high probability profit.

Successful application of Fibonacci analysis has thepotential to allow traders to earn an excellent income. Two very well known traders who effectively used Fibonacci especially in the Stock Market areW. D. Gann and R. N. Elliott. Gann made his fortune using methods which he developed for trading instruments based on relationships between pricemovement and his work was heavily influenced by applying Fibonacci in his analysis. Elliot developed the so called Elliot Wave Theory where allmajor market moves are defined by a five-wave series, adding to the potential to identify the turns. The Classic Elliot Wave series consists of an initialwave up, a second wave down (typically retracing 61.8 % of the initial move up), then the third wave (the largest) up again, another retracement, andfinally the fifth wave,which completes the cycle. It is very likely for a new Forex trader to become initially overwhelmed by this kind of numericalapplications in their market analysis. Such traders if truly interested in applying Fibonacci numbers in their trading plan, should be encouraged to learnthe basics well first and practice as much as needed before actually risking any of their capital. Since this discussion has hopefully demonstrated theimportance (and strong influence) of Fibonacci ratios on the Forex market, it seems quite logical than to achieve the ultimate success as a trader, it isessential to understand and effectively apply Fibonacci Forex trading in the trader's plan. To totally ignore Fibonacci analysis in trading the Forexmarket would be like walking into traffic blindfolded. The cars may not be seen, but they could kill nonetheless.

About the Author

Dave Hikade began trading over 10 years ago and offers a FREE Forex Trading Newsletter: http://www.forex-trader-basics.info More information onthe Best Fibonacci Forex Trading Program may be found here: http://dachsales.com/rec/fibonacci

Source: http://www.articlestreet.com

Risk Probability Calculator

By Sure-Fire Forex Trading
http://www.surefire-forex-trading.com

Summary

The "Risk Probability Calculator" (RPC) was designed to work hand in hand with Fibonacci retracement levels. It is therefore important that you have some understanding of how basic Fibonacci works.

First Some History:

Leonardo Fibonacci da Pisa was born around 1170 the son of a city official and merchant. He became a prominent mathematician and is credited with the discovery of what we now call the Fibonacci series.

After a trip to Egypt he published his now famous Liber Abacci (Book of Calculation) in which amongst other things he comes up with the sequence of numbers.

1,1,2,3,5,8,13,21,34,55,89>>On to infinity
If you add one of the numbers in the sequence to the number before it - you get the next number in the sequence e.g. 3+5=8 and so on.

After the first few numbers in the sequence if you measure the ratio of any number to that of the next higher number you get .618 e.g. 34 divided by 55 equals 0.618. The further along the sequence you go the closer to phi you will get.

If you measure the ratio between alternative number you get .382 e.g. 34 divided by 89 = 0.382 and that"s about as far into the explanation as I care to go in this lesson.

The most popular Fibonacci retracement ratios are .382, .500 and .618. We shall also touch on expansion ratios shortly.

How To Use Fibonacci In Your Trading:

In an uptrend measure the distance between point A and point B and in a downtrend measure the distance between point A and point B where point A will always be the lowest recent point in an uptrend and the highest recent point in a downtrend.

In the example below you can see a chart of the daily JPY/USD. Point A is 119.09 and Point B is 123.16. If you calculate the 38.2% retracement you get 121.61, the 50% retracement is 121.13 and the 61.8% retracement is 120.64. For example. The difference between 119.06 and 123.16 is 4.07. If you calculate 38.2% of 4.07 you get 1.55. If you then take 1.55 from 123.16 (Point B) you get the 38.2% retracement of 121.61. You can use the same principal for the other retracement levels.

In our next example of the 1-minute Dow Jones Point A is 7.916.08 and point B is 7.877.70. If you calculate the 38.2% retracement you get 7892.36, the 50% retracement is 7896.89 and the 61.8% retracement is 7901.42. For example. The difference between 7.916.08 and 7877.70 is 38.38, if you calculate 61.8% of that you get 23.72. If you then take 23.72 and add it to Point B of 7.877.70 you get 7901.42 the 61.8% retracement. The only difference between the downtrend and the uptrend is that you add your calculations to Point B and in the uptrend you subtract from Point B.

So how can we use all this information? Well, this is where the RPC comes in. The RPC calculates expansion ratios once Point A, Point B and Point C has been formed. These expansion ratios will give you likely targets, which you use to exit the trade.

Before we gone to the RPC calculator it is important that you consider the purpose of the RPC. It is a tool to help you with money management. Essentially you can only make money trading if you make more than you lose.

You could have a method which has an edge! Or you could have a method where your winners greatly outweigh your losers. The point of the RPC is to help you identify trade that have at least twice the potential gain to loss (sometimes called RRR - Risk Reward Ratio).

Risk Probability Calculator

Chart Points:
Point A	1.1794
Point B	1.2040
Point C	1.1935
You can use the .382 as an estimate until point C is confirmed
Retracement Levels:
0.382	1.1946
0.618	1.1888
Targets: Target 1          1.2087 Target 2          1.2181 Target 3          1.2333
Potential Return:
	Risk	Reward	Ratio	Trade/No Trade
Target 1	0.0058	0.0114	2.4	Trade
Target 2	0.0058	0.0235	4.0	Trade
Target 3	0.0058	0.0387	6.7	Trade

Once you have downloaded the RPC you will see an excel sheet like the one above. Below you will find an explanation of its use. You will also not that there are two sheets in the file. The first "sheet" is for any currency pair that has 4 digits after the decimal place and the second "sheet" is for currency pairs with 2 digits after the decimal place.

Chart Points

Once you have identified a trend or you have determined that you wish to enter the market either long or short, your next job is to mark off the chart points just like the examples above. Point A will always be easy to find as this will be the start of the downtrend or uptrend. Point B will be a recent "peak" in an uptrend or "valley" in a downtrend.

Once you have these two points you can enter them in the appropriate places and the excel sheet. This will automatically calculate everything else for you. Point C will be the point at which the pullback stops before the trend continues.

So far so good.

The only problem this is that in real life you will not know where Point C has formed until after it has formed. By this time it may be to late.

To gain the advantage you can use the 0.382 retracement level which was already calculated once you input the Point A and Point B levels. This is a temporary point C to allow you to enter a trade. Once the actual Point C had been formed you then enter that level. You may have to adjust your limit order after adjusting Point C if you entered the trade using "orders" e.g. once you have Point A and Point B you have enough information to set your entry order, stop loss order and limit order.

Retracement Levels

The RPC only uses two retracement levels. The .382 and the 61.8. These are automatically calculated when you enter Point A and Point B. The reason I only use these two levels is that the .50 level will be to close to the other two points on an intraday basis, which is where the vast majority of us trade.

Targets

You will find that the target levels will also act as resistance levels. These levels are automatically calculated once Points A,B and C have been entered. You should select a target according to market conditions and also the style of trader you are. You make fade out the position at each target.

Potential Return

This is where the little tool becomes really handy. With the information that has already been input, the RPC calculates if you have at least a 2-1 win ratio. This means that once the RPC has done its calculations it will only display "Trade"if you have at least twice the potential profit to risk ratio. If the calculations doesn"t show that you have at least twice the potential gain then it will show "No Trade". This will keep you out of trades where you might find yourself taking a large risk for a small potential gain.

I hope you enjoy using the RPC and that it improves your trading results. If you have any question on the use of the RPC just drop me a line at info@surefire-forex-trading.com or you can go to www.surefire-forex-trading.com

Good Trading

Mark McRae

Sure-Fire Forex Trading
info@surefire-forex-trading.com
http://www.surefire-forex-trading.com

How To Control Trader Stress

By John Russell, About.com

Now, that we can recognize the signs of trader stress, let’s learn how we can control it. Here is when the hard work begins, right? Wrong. Controlling trader stress requires only a few simple steps. But you must also make a commitment to change bad trading habits and constantly monitor your behavior as a trader.

Every trader is different. Every trade is different. The market is constantly changing. This constant change can be a major source of stress for any trader. Most traders hold multiple open trades at any one time. The market is constantly changing and moving. Events happen: war, peace, elections, natural disasters, weather, and even holidays. Almost any event can affect the market and your trades. Change can be very stressful—all change even happy events. Every trader’s life is constantly full of change. Does that mean that a trader’s life is constantly full of stress? Not necessarily.

Three Steps to Controlling Stress

There are many things that traders can do to control stress, including implementing the stress-free trade. However, three basic steps should help the trader to manage trader stress. Let’s review the three steps to controlling stress.

    * Use a trading system.

      This is very important! One way to control change and stress is to use a trading system. A trading system can limit your response to change. It can also remove stress from the trader’s life by preparing for any event in the market.

      A trading system can help a trader know when to buy and sell at certain prices, know how long to hold, know when to take a profit and when to cut losses, and know when to do nothing. A lot of events might still be happening, but the trader who follows a system has his eyes and attention on the trading system rather than the fluctuating events.

      A trading system is an empowering and consistently stress-reducing tool for all traders.
    * Make a trading schedule.

      Many traders hold the belief that they must be constantly trading. Instead of trading on one’s own schedule, they feel that they must trade whenever the market is open and slow down only when the market closes. Stock traders have a built-in limitation since the market is open for a limited number of hours every day. The Forex market is different because it is open for 24 hours a day. Without a schedule for one’s trading, a trader can feel guilty, overwhelmed, and panicky.

      A trading schedule helps the trader regain control over his day and trading activities. The schedule can be a daily or weekly schedule though I don’t recommend a monthly schedule because it’s not specific enough to be helpful.

      Most importantly, when you’ve made a schedule, stick with it. Hold it sacred. Consider it your work schedule (actually, it is!) so you have control over your trading day.
    * Set goals for trading.

      This is an incredibly powerful way to stay focused. Traders often get buried in the minor details of trading that cause them to forget their ultimate goals. Having trading goals will help to place every trade in perspective. Each trade is not a life or death event when placed in the context of one’s long-term and short-term goals. The problem is that goals are often vague or ill-defined.

      A goal is tangible and achievable. A trader can have many goals—related and unrelated to trading. An example of a goal: To earn $5,000 a month trading, to learn how to use oscillators, or to work full-time as a trader. Many people add a time element to their goal setting, but this is optional.

      Finally, write down your goals and review them on a regular basis otherwise, it’s very easy to forget your goals and start focusing on the daily details.

So, yes, there are a few stress-controlling tools every trader can use even when the trades go badly. I must emphasize, though, that stress is caused only by one’s response to an event or situation. Control the response. Control the stress!

A Few Reminders

Let’s conclude with a few reminders:

    * Traders can control stress regardless of what is happening in the market.
    * Traders can live healthy, enjoyable, and stress-managed lives -- forget what you see on television or in movies!
    * Either stress controls you or you control the stress. You decide.

Happy and healthy trading!

What are the best forex trading hours?

The best time to trade the forex markets is between 8:00 GMT and 16:00 GMT. These are basically the hours of the London market with the last 5 hours being in overlap with the US market. This is the time when the most traders and biggest banks are in the markets making their trades. It is widely considered the most profitable time to trade.

The Basics of Using Stop Losses

By John Russell, About.com

One of the trickiest concepts in forex trading is management of stop orders. A stop loss order is an order that closes out your trading position with the intent of cutting your losses when the market moves against you.

There is no clear rule of thumb when it comes to placing stops, it all depends on your trading strategy.

If your trading strategy is more of a daytrading style, you might place a stop just outside of the daily range of the currency pair that you are trading. This way, if the market suddenly breaks the trend that you are trading and moves far enough in the opposite direction, your account is protected because your position is closed.

If your trading style is more of a swing trading style, you might set your stop loss outside of twice to three times the daily range.

Remember, the point of the stop loss is to end the trade when the market goes far enough in the opposite direction, that your trade no longer makes sense. It can be difficult facing the fact that you made the wrong decision, but the markets are as unpredictable as the weather. Sometimes you look at things expecting what seems obvious, only to have the market behave unexpectedly. Setting the stop loss at the time that you enter the trade can help you to draw a “line in the sand” for protection.

No matter what stop loss strategy you choose, remember not to move your stop loss further out to prevent the trade from being stopped out. There are exceptions to every rule, but generally if your stops are getting hit on good trades, you aren’t placing them correctly to begin with. It is better to modify your stop loss strategy. By moving your stop loss to avoid having it hit, you are defeating the protective purpose of it.

When coming up with your stop loss strategy, just remember to set stops that make sense for your account and trading style. The whole point is to limit your losses when you are wrong. If your losses continue to be excessive or your stops are constantly hit, you may need to rethink your system.

Leverage: A Trader’s Friend or Foe?

When you mention leverage to a trader, one of two reactions is possible. The first set of traders will smile broadly and recall winning trades whose profits were multiplied using leverage. The second set of traders will purse their lips, and remember the time they received a margin call, blaming leverage for quickly draining their accounts. Leverage is, perhaps, one of the most misunderstood elements of trading.

Discussing the proper use of leverage causes some traders to react very positively, claiming that no one can successfully trade without them. Or they react very negatively, claiming that no responsible trader would ever use them. As you will see, both extreme beliefs are erroneous and destructive to a successful trading career.

The Positive Side of Leverage

Let’s start with the positive side of leverage. Most successful traders will readily admit that one of the key benefits of trading is leverage. In brief, leverage is the ability to control a large amount of any financial instrument like a currency or stock using only a small amount of capital. Here’s an example using equities. A trader can use cash or margin to purchase a stock. In a cash account, the trader simply pays for stocks from the cash in his or her account. A margin account is different. Using a margin account, a stock trader using 2:1 leverage can purchase twice as many stocks as the trader using the same amount in cash money. Here is when it gets really interesting. A stock trader can leverage at a rate of 2:1. But a currency trader can leverage at a rate of 100:1 in a standard account. In a mini account, a currency trader can trade at a rate of 200:1! Yes, that amount of leverage is mind-boggling. It’s enough to make many stock traders drop their S & P 500 list and start trading currencies. But wait.

We’ll see that this is not the whole story so hold on to your equity index lists.

Commodities traders can’t access as much leverage as currency traders, though they can leverage considerably more than stock and option traders. To use leverage, a trader must have a margin account, which requires placing a performance bond (or a “good faith” deposit) with the brokerage firm. The list below summarizes the amount of leverage that can be used for each type of trading instrument.

    * Equities: Leverage is 2:1.
    * Options: Leverage is 10:1.
    * Futures: Leverage is 20:1.
    * Currencies (Standard account): Leverage is 100:1
    * Currencies (Mini account): Leverage is 200:1.

With all the leverage that a currency trader can use, and the simple matter of opening a margin account, why would any one hesitate to use the margin for trading stocks, options, commodities, and particularly currencies? Why wouldn’t they use all the leverage available to them to maximize their trading profits?

The Negative Side of Leverage

There is a negative side to the leverage issue. There are losses. Leverage treats price movement equally: maximizing profits and maximizing losses. Losses are multiplied just like profits. Remember the margin call reaction in the opening paragraph? A margin call is made when a trader needs to pay additional funds to the brokerage firm to cover his or her losses, which can quickly accumulate from trading on the margin. Many people believe that an account cannot fall below zero. That is true only for a cash account. For a margin account, the balance can fall far below zero. This is a very real possibility. It does happen. In fact, many traders have received margin calls or even had their positions sold to cover their losses. In short, a trader using a cash account can only lose his shirt. But a trader using margin can lose more than his shirt!

Friend and Foe

That depends on how it is used. If margin is used irresponsibly, then profits and losses will accumulate very quickly. If margin is used prudently, profits can be maximized and losses can be kept to a minimum. There is a safe way to use the margin so following the prudent margin rules can make leverage a friend to every trader.

What is Risk in Forex Trading?

Risk is exposure. In Forex trading, risk refers to exposure to the price changes of a currency pair. Often, risk makes people wary of trading stocks, commodities, or currencies. It is true that risk is an integral part of every trade. In other words, there is no such thing as a “risk free” trade. If any broker says that his investment or trading system is risk free, you may be talking to an unscrupulous dealer. This is a warning sign of which all traders should be aware.

Risk is an aspect of every trade and of every trader’s life. Even such successful investors like Warren Buffett and William O’Neill have admitted that they have lost money in the market. Every trader will lose money trading currencies. The goal, though, is to make more winning trades than losing trades, make more money than you lose, and to manage your level of risk.

Understanding Risk

Understanding risk is the first step towards managing it. The Forex market carries a uniquely high level of risk. This high level of risk comes from the high amount of leverage available to Forex traders. The currency market allows people to purchase currencies at a 100 to 1 or even 200:1 ratio. No other financial market allows this amount of leverage. Many traders are attracted to Forex for this reason. But it can be a double-edged sword. The faster money can be made, the faster money can be lost.

Levels of Risk

Different kinds of accounts carry different levels of risk. The margin account is the riskiest type because the trader has access to nearly unlimited funds. In other words, the trader is not limited to the cash available in his or her account. The trader using a margin account can end up owing additional funds if the currency pair makes a strong price movement against him. And, yes, this does happen to traders, which is why stop loss orders are always recommended.

A cash account carries much less risk because the trader is limited to trading only the amount of cash in the account. However, the risk is that the trader will not have sufficient funds available to enter the desired trades.

The Margin Account

To trade on the margin , a trader must have a margin account. A margin account is a special type of account that traders can have with a brokerage firm or bank. Margin is the required amount of money that a trader must deposit to collateralize (or fund) a Forex position. Therefore, margin changes constantly as the price of the currency pair changes. If the currency pair moves in the trader’s favor, the margin requirement will be lower. However, if the currency pair moves in an unfavorable direction, the trader may need to deposit additional funds to keep the position adequately funded. This is known as a margin call .

Risk Reward Ratio

A Risk-Reward Ratio is a calculation that shows the maximum amount of risk and maximum reward on a particular trade. It is one of the best factors in deciding whether to enter a particular trade. Every trader should know how much he or she is willing to lose and how much he or she is looking to gain on each trade. The risk-reward ratio should be at least 1:2. A higher ratio (1:4 or 1:6) is even better. If the Risk-Reward Ratio does not meet the minimum requirement, the trader should not enter this trade. The Risk-Reward Ratio is an excellent risk management tool and should be used by every trader on every trade.

Managing Risk

Although risk can cause anxiety for traders, it can also be managed. Risk management tools and techniques are essential for every trader to employ. A few ways to manage your risk in trading Forex are:

* Determine Risk-Reward Ratio. Always know the amount of your exposure.
* Use stop loss orders.
* Never maximize the available margin. Keep margin use to a minimum, preferably 10 to 20 percent on each trade. Decide carefully whether to use any margin at all.
* Avoid using margin in uncertain markets.

Trading on the margin can be both risky and profitable. Understanding your risk on each trade and knowing your psychological level of acceptable risk are important ways to protect your account and yourself.

Interview with CodersGuru

Ahmed Soliman is a professional C++ programmer using nickname CodersGuru on different automated trading communities. He is a commercial developer of Expert Advisors in MQL4. Ahmed wrote many of Expert Advisors, Technical Indicators and Scripts in MQL4. He is now working on a book about Expert Advisors programming.

Tell us, please, a little about yourself, how and when did you start in trading?
I'm a C++ and assembly programmer. I've programmed in almost all of the programming languages and hired in a lot of projects in Spain, Egypt and USA. One of my clients a year ago asked me to program a trading system in MQL4, it was the first time I heard about this language. He told me it was like С++ language and easier. Thanks to my client and thanks to MQL4, from that day I've been programming in MQL4, but I have not forgotten my original programming language, C++. That's why you will find a lot of MetaTrader extensions that I've made in C++.

Do you trade yourself? If yes, manually or with Expert Advisors?
I've been trading Forex for 6 months, I started to trade manually but my heart bore the stress and my doctor advised me to automate my trading. Well, you know what I am talking about! I don't think that I have the iron discipline to trade manually and I believe that any manual practice can be converted in automated logic. So, the answer is: I'm trading with my Expert Advisors and I constantly try to improve them. The make my mind free and save me from the decline troubles!

So what is your current progress in automated trading? What indicators and experts have you already developed?
You will not believe me when I say that I don't know how many Indicators, Scripts, and Expert Advisors I've created. I've designed hundreds, which you can find on most of the Forex forums. I've helped a lot of people to understand this programming language with my tutorials, and a lot of them now have their reputation within the MQL programming world!

Currently I have three Expert advisors that the admin of Forex-TSD.COM is constantly forward testing them in Elite Section of the forum and they make profits.

Why do you think automated trading is better than manual trading?
Well, there's a saying "Plan your trade and trade your plan". Raymond Toh said in one of his articles "there's no way to make profit trading Forex (or achieving any success in any field) without firmly established rules and the discipline to obey them". You can not obey your rules if you trade manually, believe me: I tried manual trading and lost a lot of money. For the peace of your mind, you have to find a programmer and describe your manual practice to him, and he will give you back an Expert Advisor that makes your manual trading 100% automated!

MetaTrader and MQL4 give us the ability to write our Expert Advisors that simulate our manual trading, so, why don't we benefit from those great tools and make our trading live easier?

So, you think that it's possible to automate ANY trading system?
Most people (traders and programmers) will say NO! I say: "Tell me logically how you trade manually and I'll give you back an automated trading system". We have MQL4 functions that handle the time of trading if you want to trade a specific session. We have functions that calculate Fibo levels for you if you like those entry/exit strategies. Briefly, we have in MQL4 the reference of all of your manual trading practices. Maybe my manual experiment colored my opinion about the manual trading, but I do believe in what I've said!

What difficulties you think will face those who decide to automate a trading strategy?
To automate your trading you are one of two: a programmer or a trader that seeks for a programmer to write his system. If you are a programmer it'll not be a problem except you have to be a very good programmer to avoid any bugs in your code and logic.

If you are a trader that seeks a programmer to help, the main problem that you will face and the programmer as well is: How to put in words your manual trading practice? I advice you:

• Write as much detail as you can for your programmer!
  
• Try to have a basic concept about programming in general that helps you to describe your system logically.
• You have to know your system from the beginning. I've met a lot of clients who have asked me to write their systems, but when we start I discover that they know nothing about their systems!

What do you think of the Championship and its Rules?
I like the spirit of the Competition and I do believe it's the only way to improve any system. MQL4 programming is my life right now and you can imagine it will be interesting to know where you rank among MQL4 programmers around the world! Thanks for the idea and thanks for the rules!

There's only one thing in the rules that appears obscure for me, but I'll discuss it in the forum!

Will you personally participate in the Championship? Why?
Sure I'll participate in the Championship. And "Why?" because as I told, I like very much the spirit of competition and I enjoy having 40 000 USD in pocket! Beside I wish, to be ranked among the MQL4 programmers as the top coder!

Why are you so sure that you will win in the Championship? Maybe you have got a very profitable, unique strategy? What principle is your Expert Advisor based on?
Actually, I wish to be the winner, but I'm not sure that I will be! I have a strategy that is working well for me and I trust it! I cannot talk about this strategy, but I think you can not imagine a system without indicators! If I tell you what indicators I'm using in my strategy you will know how the strategy works! The new part in my Expert Advisor is that I don't use any external indicators and all of the indicators' codes are embedded in the Expert Advisor. I cannot say any more about my Expert!

Will you distribute your Expert Advisor commercially after the Championship is over?
I didn't think of that. Maybe I will, if I win!

And our traditional question: If you win and get 40 000 dollars, how will you spend this money?
I'll publish my first book about MQL4 programming and I'll ask my wife "Where do you want to go this weekend?" Maybe we travel to Mecca!

Thanks a lot, Ahmed. Wish you well in the Championship.

Created: 2006.09.04  Author: MetaQuotes Software Corp.

Be Emotionless in Trading

Two biggest emotions in trading: greed and fear. Do not let greed and fear influence your trade. Trading is a mechanical process and it's not for the emotional ones. As Dr. Alexander Elder said in his book "Trading For A Living", if you sit next to a successful trader and observe him or her, you might not be able to tell whether he or she is making or losing money. That's how emotionally stable a successful trader is.

Forex Scalping Methods for Big Consistent Profits Doesn't Work

Here we are going to look at Forex Scalping methods and how they aim to achieve big consistent profits from day trading regularly and looking to accumulate small profits each day to build huge profits overtime. Let’s look at forex scalping in more detail.

Forex scalping is more popular than ever and there are numerous forex trading systems and e-books, which claim it works but none of them work, (we will return to this in a minute) as the logic behind forex scalping is totally incorrect.

Why Forex Scalping Can NEVER work longer term

The reason it doesn’t work and never can is simple to understand if you think about it – you need valid data!

Consider this:

Each day trillions of dollars are traded by millions of forex traders and the total of all these opinions come together and give us the price.

The thought that you can tell what all these millions of people will do, in just a few hours is laughable.

You can’t!

Volatility can and does take prices anywhere in short time periods and support and resistance levels are meaningless. If you have no valid data, you will lose and that’s EXACTLY what happens to people who try forex scalping or day trading.

You may be saying:

I have seen the proof it works and seen track records presented by forex scalpers and yes you have – but their NOT real!

See the standard CFTC disclaimer below and you will see why these track records cannot be trusted:

"Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those show".

So you simulate a track record, knowing the closing prices – how hard is that?

Anyone can do that even a child.

The problem of course is:

We don’t have the luxury of knowing the prices when we trade (shame but that’s life!) so doing it in the real world is a lot harder and for people forex scalping it’s impossible.

That’s why you never see a real track record but a hypothetical one which is simply not worth the paper it’s written on and in most cases is simply made up by the vendors.

Where Are The Real Track Records?

Don’t be fooled advertising copy with statements such as:

"Pick tops and bottoms scientific accuracy" make "50 pips a day" or "trade with 80% accuracy" – this is just ad copy and has no back up.

If you don’t believe me ask for a forex scalping real time track record and you won’t get one - try it and see.

Forex scalping and day trading is a good story, but that’s all it is and try it and you will lose - as you can never get the odds in your favor.

Keep in Mind

Forex trading is a great way to make money but its not easy and a lot of the people who sell the courses and e-books on forex scalping try and make it appear so.

Traders who believe the above need to get in the real world.

How to Win

To win, you need to do your homework and get a forex trading system that gets the odds on your side. This means avoiding forex scalping and day trading and trading data that covers longer time frames that’s valid and allows you to get the odds in your favor.

Courtesy: http://www.streetdirectory.com/travel_guide/37485/investment/forex_scalping_methods_for_big_consistent_profits.html