The word “cable” is slang, used by forex traders, to denote the GBP/USD currency pair, where the Great British Pound (GBP) is priced in terms of the US dollar (USD). “Cable” is also often used to refer to the British pound itself. The term originated in the mid-19th century, when a submarine communications cable, called the Transatlantic cable, across the Atlantic Ocean, was used to transmit exchange rates between the New York and London stock exchanges. Today, optical fibre cables have replaced the transatlantic cables and satellites have come into the picture, but the nickname “cable” for the pound-dollar pair remains. The pound sterling is the domestic currency of the UK, one of the oldest currencies in the world that is still in circulation. It has shared a long and deep relationship with the US dollar. So long is the trading history between the two nations, that there is no way to ascertain the original Pound-Dollar rates. The Gold Standard ruled the exchange rates between the two currencies prior to the 1970s. History of the British Pound and US Dollar till World War II The pound sterling traces its origins to the Roman era, its name derived from the Latin word “Poundus,” which means weight. It has been a unit of currency from as early as 775 AD, in the Anglo-Saxon era. In 1694, King William III established the Bank of England to fund his war efforts with France. By 1717, England had started defining the sterling’s value in gold, rather than silver, although the official gold standard would come decades later in the 1800s, after Germany adopted it. In 1914, the UK suspended the gold standard to counter its debt and high inflation during World War I. It was forced to devalue the pound drastically towards the end of the war, with £1 being valued at $4.70. By 1925, Winston Churchill, the then British Prime Minister, decided to go back to the gold standard. The value of £1 went back to the pre-war levels, which was $4.86. The GBP rose to its highest ever against the USD in 1934, when the US devalued the dollar and £1 was worth $5. At the outbreak of World War II, the GBP/USD value dropped significantly. By 1940, £1 was equivalent to $4.03. The Bretton Woods Conference in 1944, after World War II, put an end to the gold standard. The GBP was now pegged to the US Dollar. After World War II and into the 1980s England struggled economically after World War II. The pound depreciated twice against the USD, once in 1949, when £1 was equal to US$2.80, and again in 1967, when £1 was equal to US$2.40. The latter was a devaluation of the pound by more than 14%. Finally, in 1971, the pound sterling was introduced in a floating exchange rate regime, which allowed it to compete with other international currencies, based on trading volume and purchasing power. This was a turning point for the GBP. By 1979, £1 was equal to USD$2. The 1980s began with energy shortages and the rise of OPEC, which led to a significant increase in oil prices. High inflation and unemployment became rampant in the US, after its war efforts in Vietnam. But, the US Federal Reserve failed to take appropriate action to curb this. In 1981, US President Ronald Reagan came to power, and under his leadership, the Fed hiked interest rates by 20% to fight inflation. Expensive tax cuts and higher than usual military spending in the US, led to US economic growth again. The US dollar grew 50% over other currencies, which hindered its international trade prospects. The Plaza Accord of 1985 was an international intervention in the currency markets to systematically devalue the US dollar. This brought down the value of the pound and £1 was less than $1.20. 1990s to 2010: A Period of Economic Uncertainty and Global Recession In the early 1990s, the Bank of England decided to raise interest rates and buy large amounts of GBP, in order to maintain the value of the pound sterling against the German deutschmark, as part of the Exchange Rate Mechanism (ERM). This was something uncalled for, since the UK was already going through a recession at that time. Many prominent investors, notably George Soros and his team, predicted a forthcoming crisis, and started shorting the pound in huge amounts. On September 16, 1992, in what is now known as Black Wednesday, the UK decided to leave the ERM and the pound devalued over 20% against the dollar in a single day, with £1 coming down to $1.5. The dot-com bubble burst in the 1990s, lowering the value of the pound further by 20%. By 2001, £1 was equivalent to $1.40. The relative weakness of the US economy leading to the 2008 sub-prime crisis, saw an appreciation in the pound’s value for much of 2007. But, by 2009, it became clear that the US recession had far-reaching consequences on the world economy. The pound fell by over 30%. By March 2009, the Bank of England announced a quantitative easing programme, cutting the bank rate by 50 basis points to one of the lowest levels ever. By March 13, 2009, the GBP/USD rate was 1.3971. Over the course of the next few years, the GBP/USD rate had its ups and downs, amidst ultra-loose monetary policies of the UK and strong US growth. The debt crisis in the Eurozone also added to the volatility in the currency pair. It is interesting to note that not once from 2008 to 2018 did the GBP/USD rate touch a value of US$2.00, which was last seen in 2007. 2016 Onwards: Brexit and Future Uncertainties On June 23, 2016, Britain voted to leave the European Union. The GBP/USD fell to a 30-year low of $1.33. Fear and uncertainty in the markets caused the value of the pound to drop further and by July 6, 2016, the GBP/USD rate was $1.2885. England now had less than 3 years to negotiate the terms of the Brexit deal with the EU. Everything here on in would depend on how these talks went. Rumours of the UK leaving the EU without a deal caused a “Sterling Flash Crash” in October 2016. By October 25, 2016, the GBP/USD rate was 1.2133. The pound dropped 6% against the US dollar within minutes. From 2016 onwards, the Cable was at the mercy of several factors, prominent among them was the ongoing negotiations between the UK and EU. Internal political crisis in the UK also caused volatility in the currency pair prices. As of the beginning of 2019, the cable is the fourth most traded currency pair in the world.
A common challenge impacting most traders and investors is the tendency to develop analysis paralysis – also known as trading paralysis. This is because there are a number of conflicting thoughts and emotions that can affect a traders ability to pull the trigger on a buy or sell order. Perhaps you’ve had a run of consecutive losses to your live account, and have simply lost all faith in your trading system. One tendency is look for a different system. That may not necessarily be the answer to your problem. Maybe you have too many indicators on your trading screen. Indicators and confirming signals are great – to a point. However, at some point waiting for too much confirmation on trades leads to lower profit potential (or lower risk to reward). Assuming you have a profitable trading system, developing trading paralysis will always negatively affect your returns. It could be argued that trading less can be a good thing for some traders. However, over-analyzing open trades is more likely to be detrimental to your account. Analysis paralysis, or trading paralysis, doesn’t only affect traders on entry signals. It can also affect investors and day traders by preventing them from exiting, or not exiting, positions when they should. By over-analyzing the market, you can inhibit your ability to take action when a good trade presents itself. The result is missed opportunities. You can’t profit in trading without taking risks – nothing ventured, nothing gained. Below are some things you can do, or not do, to help you take better trades based on objective analysis: Never become Emotional about Investing or Trading Trading is very psychological in nature. It’s easy let your emotions get the best of you. This can be problematic for many traders, however, as overly positive or negative feelings can cloud your judgment and force you to make bad decisions. Fear is what keeps traders from pulling the trigger, and it causes them to over-analyze trades as a result of not wanting to lose any (or any more) money. This is often the result of losing several trades in a row. Fear is what causes trading paralysis, but fear is not, by far, the only emotion that effects traders. Below are some other emotions that can affect your trading: - Greed can cause you to hold on to trades too long, often turning winning trades into losing ones. Greed can also cause you to overtrade or overleverage your account. - Overconfidence also leads to overtrading or overleveraging your account. This is more likely to occur after a string of several wins. - Anger often occurs after a losing trade. It can cause you to re-enter the market on baseless trades, or overleverage subsequent trades, in an effort to “get your money back.” That’s just naming a few emotions that traders must deal with. Unchecked, these emotions will influence your thought process and opinions about possible trading opportunities or exit points. The best traders have great psychological and emotional discipline to match their trading plan and money management skills. Avoid Watching Financial News Excessively A common tactic for many traders and investors is to watch the financial news for several hours a day. While there is nothing inherently wrong with this, too much information can create confusion. One thing to keep in mind is that most of the pundits that you see on financial news shows don’t trade themselves. Of course there are some exceptions, but even they are just speculating. My point is that nobody has a crystal ball when it comes to the markets. At least, no retail trader has a crystal ball. Fundamental analysis is fine, but technical analysis of price is the most effective way to trade any market. Don’t let the opinion of someone, who probably doesn’t even trade, affect what you see on the screen. Just like over crowding your charts with too many indicators can cause conflicting signals, watching too much financial news can keep you from executing timely and profitable trades. At some point, with so much information to process, you are bound to get conflicting signals – not unlike a bad first date. Trust Your System Another problem that leads to analysis paralysis is not having trust in your trading system. It is important to trust your trading system, and the best way to build real trust in a trading system is to demo trade the system until you are consistently profitable with it. Assuming you are using a profitable trading system, building trust in your system will greatly reduce the chances of experiencing trading paralysis. Keeping a trading journal really helps to build trust in your trading system as well. Journaling also helps in picking better trades, and improves your overall performance over time. A trading journal helps to build trust in your trading system, because it allows you to objectively track which trades, from which setups, and which time frames, etc… worked out best for you. If a certain trading method, time frame, etc… is not working out for you, your journal can reveal that fact to you objectively. The numbers don’t lie – unless they are government numbers. CPI anyone? Of course, you must start with a profitable trading system, like Top Dog Trading. Once you’ve found a trading system that works for you, you must drill its rules into your memory, so you can execute your trade setups instinctively. Demo trading and journaling can help build trust in your trading system, which also reduces the chances of analysis paralysis. Control and Cover Your Losses Having excellent control over your risk, or money management, is one of the best ways to combat trading paralysis. Setting stop losses, controlling your exposure per trade, and covering your expenses are all vital aspects of proper money management. You should always set a stop loss, preferably before you enter the market. Trading without stops can be disastrous. Just ask the guy in the video to on the right. Ouch! You are less likely to experience a fear of pulling the trigger if you are risking a small fixed percentage of your account per trade. Most experts recommend risking 1% or less per trade. Another way to lower the stress of trading, and therefore lower the odds of trading paralysis, is to use money management techniques to cover your trading expenses as quickly as possible. Example: You enter a trade risking 1%. Assuming the trade moves in your favor, and you are up by at least 1%, exiting half of your trade would cover the expense of your risk on that trade. At that point, you would no longer have any risk to your trading capital – only risk to potential profit. In other words, the worst you could do is break even. Similarly moving your stop loss to break, when it is appropriate, helps to cover trading expenses. If your average trades are big wins and small losses, you are much less likely to be frozen by trading paralysis. Lower Your Leverage Lowering your trade size is one of the easiest ways to lower emotional stress in trading. I spoke earlier of using a low fixed percentage per trade (preferably 1% or less). Most novice traders, however, do not utilize low leverage. In fact, they usually overleverage and overtrade their accounts down to nothing. With lower leverage, you are naturally less emotionally involved in a trade, because you have less at risk. Less risk always means lower stress. If you are trading 3%, 2%, or even 1%, and your losses are making you a little gun-shy, you might find your trading is much more enjoyable and profitable when you lower your leverage. Increasing the trade size, or leverage, has the opposite effect. Stress levels are bound to rise with increased leverage, which can bring on the tendency to over-analyze trades. All this makes it that much harder to pull the trigger on profitable trades, and opportunities are missed. Clearly, trading paralysis is an issue that can affect any trader or investor. If the emotions that lead to this condition are left unchecked, you may soon find yourself taking, or not taking, trades based on them. Trading is a highly emotional and psychological performance activity. The best traders learn how to control their emotions, so that their performances are not affected. Controlling the fear associated with trading paralysis, or analysis paralysis, is just another part of improving your overall performance in trading.
Many novice traders, and many so-called experienced traders too, fall victim to one of several mental situations that can cause them to sabotage their own trading and profits. Trading consistently and profitably is an extremely difficult task, and there are certain traps of which you should definitely be aware. Below are 5 common ways that novice traders sabotage their trading profits: 1. Trouble with pulling the trigger. This can also be a case of analysis paralysis. Sometimes traders tend to immerse themselves in their research. They want to learn as much as they can, which is commendable, to a point. However, traders can go overboard with this. Instead of learning a few technical indicators, they want to learn about all of them. Perhaps they set up a system that requires 15 indicators, plus the sun and the moon, to all be in perfect alignment. Or perhaps you have a fairly simple system that you plan to trade, but you freeze at the first entry signal. Whatever the cause, this is definitely a fatal flaw in your development as a trader. The most profitable trading system in the world is useless if you don’t trade it. You can’t make any money if you never place a trade. 2. Exiting winning trades too early. There is a natural human instinct to grab what you can, when you can. I’m sure it stems from our caveman ancestors, when grabbing might have meant the difference between life and death. We even have a phrase for it: “A bird in the hand is worth two in the bush.” If you are in a trade that is going in your favor, your brain is probably screaming at you, “Lock it in! Sell while it’s up!” Greed and fear rule the markets. Greed, you want more. Fear, you don’t want to lose what you have. These two powerful emotions are hard to tame, but tame them you must. Consider my own personal situation – I bought gold several years ago, at about $600 per ounce. I sold when it hit $1,000. And of course, we all know what has happened since then. You have to let winning trades develop. 3. Holding onto losers for too long. Here is the flip side of selling winners too early. We have all held onto losing trades for too long, praying they would come back into profitable territory, swearing we would sell the moment they broke even. It’s almost like a rite of passage for traders. Of course there are smarter ways to trade. If your system employs stop-loss orders, you must NEVER EVER cancel them and allow a trade to go further against you. And if your system does not employ stop-losses, then you need to get one that does. I saw an article that compared trading without stops to washing windows on a skyscraper with no harness. Sure, most days everything is fine. But on that one day when you fall, you will not be washing windows ever again. Good traders know that trades frequently go wrong, and they prepare for it. Don’t let your lack of stop loss orders deal a fatal blow to your trading account. Always use a stop-loss. 4. Following the crowd/herd mentality. A group of people can sometimes come up with the best solution to a problem, if they are performing rationally. But crowds can descend into panic and madness in the blink of an eye. Have you ever watched a crowd rioting on television, and wondered what could drive perfectly normal people to act so insanely? The herd mentality can be a powerful influence when people are vulnerable. Don’t get caught up in the greed or panic of the crowd. Remember: Most people who trade aren’t successful. Only about 5% of traders are consistently profitable. Make sure you stick to your own rational trading plan. 5. Not sticking to your plan. You have chosen a trading methodology after lots of careful scrutiny of available options. You know the expected gains from the system. Yet you constantly make trades off-plan. Perhaps you don’t take the trades when the strategy signals, because it doesn’t “feel” right. If you are doing these things, then you have fallen into emotional and impulsive trading, which will thoroughly sabotage your trading profits. You cannot expect to achieve the proper results that your trading system offers, unless you take every trade exactly as dictated. Assuming you are using a profitable trading system, you cannot pick and choose which trades to take based on your “instincts” or emotions. You must stick to your plan to exploit the edge, if any, that it gives you. You must let your trading plan work for you. There are a lot of other mistakes that newbies, and veterans alike, make to sabotage themselves and their trading profits. Becoming aware of your flaws is the first step toward taking care of them, and toward making sure they never interfere with your success in the future.
If you’ve been trading a while, you’ve probably come to realise that some currencies track primary commodity goods. These are the domestic currencies of nations abundant in specific natural resources and export them in the form of raw materials for income. A 2009 study on these currencies Can Exchange Rates Forecast Commodity Prices? by Chen, Rogoff and Rossi, has established that exchange rates of commodity currencies can be used to forecast global commodity prices. This is a reliable source of information for economists and researchers who are concerned with commodity valuation; a tricky subject in a domestic economy. It is also beneficial for investors to diversify their portfolios. Recently, Goldman Sachs and other bodies like The World Gold Council (WGC) published reports favouring investments in gold and other commodities on account of surging commodity indices in 2019, citing that investors would continue to invest in them as a hedge against systemic risk. Some currencies are more closely tied to commodity movements than others. 1. The Australian Dollar (AUD) Australia is the primary global exporter and producer of iron-ore, a prominent raw material in several industries; particularly steel. In fact, 98% of the globally mined iron-ore is used to manufacture steel. The ore is also used for train tracks and other infrastructure, construction and engineering purposes, which is why the demand for iron-ore is extensive in emerging economies like Brazil and China. Mining activities in iron-ore and gold have secured continuous economic growth for Australia, fueled particularly by the rapid urbanisation and consumerism in cities like Perth. Other commodities that share a positive correlation with the Australian dollar are high-grade copper, aluminium, wheat, wool, beef and coal. Due to its isolated location, Australia needs to import large amounts of various goods that are not produced within the country. It is the 20th largest goods importer in the world. This can create problems in the balance of trade, which can have an impact on the domestic currency. As demand for iron-ore weakens from a slow-moving Chinese economy, the Australian dollar could also depreciate in tandem. 2. The Canadian Dollar (CAD) The 10th largest economy in the world in terms of nominal GDP, Canada has the fourth highest estimate of natural resources, valued at US$33.2 trillion in 2016. It is also the fourth largest exporter of petroleum and natural gas. The Canadian dollar tends to have a positive correlation with lumber, wheat, soybeans and corn prices. Crude oil extraction and mining are among the biggest contributors to the country’s foreign exchange reserves and GDP, which means rising and falling oil prices reflect on the movement of the CAD. The lumber industry in the nation has stabilised after years of activism, to adopt more sustainable models. It is important to keep track of such events, since the CAD is heavily connected to lumber trading. 3. The Russian Ruble (RUB) Russia contains over 30% of the global natural resources, valued by the World Bank at US$75 trillion, as of 2016. It is a prominent exporter of oil, natural gas and precious metals. In addition, the Russian ruble has a positive correlation with lumber prices. The timber reserves of Siberia and the Russian Far East are the largest in the world, along with the mineral backed Ural Mountains. It is one of the largest producers and exporters of gold and diamond. Oil and gas were consistently the source of hard currency for the country, being Russia’s number one export. However, in 2018, the RUB decoupled from Brent Crude, following US sanctions. Experts suggest that as global warming melts arctic ice consistently, several vast areas will become more accessible. These areas reportedly contain large untapped reserves of oil and natural gas. 4. The Colombian Peso (COP) Petroleum comprises 45% of Colombia’s exports, and commodities occupy a significant portion of its exports. It has the largest coal reserves in Latin America and holds the second position after Brazil in hydroelectric power generation. Other major exports include cacao beans, rice, coffee and emeralds. With the rapid fall of the Venezuelan economy, Colombia is now one of the biggest oil exporters to the US, which is the world’s largest consumer of oil. 5. The New Zealand Dollar (NZD) The New Zealand dollar is the 10th most traded currency in the world. The country’s economy is highly agriculture based. It is a huge exporter of dairy products, fruit, wine, meat and seafood. Australia is the largest bilateral trading partner for New Zealand, followed by China and the United States. Naturally, the NZD has a close correlation with domestic currencies of these countries, which form high consumer bases for products like beef, milk and pine logs. Factors That Affect Commodity Currencies Some factors that affect the prices of commodity currencies include: 1. Price of Commodities: Fluctuations in the underlying commodity prices affect these currencies. If a commodity is performing very well, then there is great demand for the associated currency, raising its value. 2. Economic Indicators: Country-specific economic indicators, such as interest rates, inflation and consumer purchase index, impact domestic currencies. During rising commodity prices, economies of the commodity-producing nations also flourish, which leads to higher domestic interest rates. Investors will sell low-yielding currencies in exchange for high-yielding ones, in what is known as carry trade. These carry trades drive commodity currency prices. Australia and New Zealand are both prominent places for carry trade activities. 3. Trade Terms with Other Countries: The demand and supply equation of commodities also affects currency prices. If the economy of a significant trade partner country is in decline, the demand for commodity exports will reduce too. This affects commodity currencies. 4. Inverse Relationship Between USD and Commodity Prices: The US dollar is the benchmark pricing mechanism for most commodities, particularly oil. It is also the exchange mechanism in most international trade contracts for raw materials. When the value of the USD declines, it becomes expensive to buy commodities. Traders should keep a close eye on the price quotes of the dollar index, to study the USD and its correlation with commodity prices.
Are you afraid of success? If you are asked this question, your first response is probably an emphatic , “No, of course not!” Everyone wants to succeed. At least, everyone *thinks* that they want to succeed. But what if, deep down, something in you is actually *afraid* of succeeding – something that you are not even aware of? And what if this something is preventing you from reaching your full potential, sabotaging you just when you think you are getting close to achieving your goals? This situation is more common than you may think, and it happens frequently with traders. Trading is a difficult business, psychologically, and it is extremely important to get your trading mindset right. Fear of success may come in many guises. It may include: - Fear of achieving your goals and yet still not being happy - Belief that you actually do not deserve to be successful and to have good things happen for you - Fear that achievement may mean the loss of others’ respect and goodwill - Belief that there are others who are better than you, who will take your place if you slip even a fraction The negative consequences that may come as a result of your fear include: - A lack of effort toward achieving your goals - Problems with decision-making – analysis paralysis - Self-destructive behavior, such as ignoring your trading rules - Feelings of guilt and anxiety when you do achieve your goals - Denouncing your own accomplishments and denigrating your talents What sort of belief systems do people like this subscribe to? Below are some examples: - I am not good enough. I don’t deserve to win. - What if people don’t like me when I am successful? - My friends and family will think I am doing something illegal or immoral. - People like underdogs. They don’t like winners. - I am always afraid that I am going to lose everything that I have worked for. Are You Afraid of Success? If you have identified any of these thought patterns in your own trading life, you may be wondering what you can do to erase them and replace them with more effective and productive thought processes. There are steps you can take to help you overcome this fear and to instill in your subconscious a healthy respect for success and all that comes with it. First, you need to identify your fears and define them. Ask yourself questions such as the following: - What do I think will happen if I achieve success? - Am I afraid of being thought arrogant if I tell others of my accomplishments? - What would success look like? - Who do I think I will hurt or offend if I achieve success? - How do I feel that I am undeserving, or that I will not be happy if I achieve success? - Do I feel guilt or anxiety when I think about being successful? - Am I too much of a perfectionist? Secondly, address your goals and the actions that you have taken so far toward reaching your goals. - What have I done to achieve success? - How much of a problem do I have making decisions? - Do I sabotage myself in order to keep myself from being successful? - Do I lose momentum and motivation as I grow closer to being successful? - Do I focus on the tiny unimportant details in order to prevent myself from ever completing a project? - Do I wait for everything to be perfect before I act? - Have I ever put myself down when discussing my success with others? Thirdly, you need to determine how you can replace your faulty thought pattern with self-affirming thoughts. - How can I make a more honest appraisal of my efforts? - How can I accept myself as successful without boasting or being arrogant? - How can I eliminate all of my excuses and reasons for not being successful? - Can I enlist the help of someone else to provide feedback and help me understand when I am being self-destructive? Overcoming a fear of success can be very difficult since it is hard to identify it even before you begin to change it. But with very honest introspection and a serious commitment to making changes in your behavior and thought patterns, it is something that can be accomplished. Successful trading is a tough business. Having the correct mindset for success is what separates the winners from the losers. There’s no room for fear of success, in a successful trader’s mindset. Let overcoming the fear of success be one of your first successes.
With the right mindset and preparation, Forex trading can be truly rewarding. Yes, learning to make money and having financial freedom is something many desire. However, there is an additional reward when you learn a strategy, and work to perfect the consistent execution time and again, watching a trade move from entrance to exit just as smoothly as you planned. Although this is a great reward in and of itself, the fun part is being profitable. This, however, is difficult to do over an extended period of time – unless you master a proven trading strategy that can provide consistency in your trading. The Cornflower Blue strategy is one way you can find fairly low stress, consistently successful trades in the erratic market of foreign exchange. The Cornflower Blue trading strategy has been around for a number of years now and is a proven method of intraday trading for Forex. The strategy is based in following the trend and trading using EMA’s (Exponential Moving Average) that represent various time frames. The job of the EMA is to reflect an overall directional average of a specified time frame. These EMA’s can be helpful in trend trading because they can help you to identify a trend, how strong it may be, and the direction it has been consistently moving over a period of time. This information can be very useful to a trader. Example: If you know there has been a strong and consistent bullish trend, and you have an indicator telling you that it will likely continue trending up for the next day or two, then you should probably opt to trade buy positions. Trading with the overall trend, your trades are less likely to be stopped out. The trend is your friend – until it ends! Direction is important, but it is only one part of a successful trading equation. A solid trading strategy has a few common components to it. Direction will be one, entrance and exit will be another. Of course, position size and profit targets vary from strategy to strategy. For instance, if you are using a scalping strategy, then your pip expectation should be smaller than if you were using a swing strategy. You must adjust your position size and stop losses accordingly. The Cornflower Blue method is an intraday strategy and on average will yield about 20 pips, sometimes more if the trend is strong. This trading strategy is great for beginners because it helps you identify and trade with the trend. Trading the Cornflower Blue Strategy Below is an example of what a trade with the Cornflower Blue strategy may look like. The blue checkmark shows where you could place a trade (the candle beneath the checkmark). You see early on there is an initial breakout, then the candles consolidate, but the EMA’s show a continuation of an upward trend. There is a pullback and a bounce off of the 12 EMA (violet line). See the full entry and exit rules below. In this trade, that one candle yielded 45 pips and you can see candles continued on for many more pips over the course of a few hours. (This would have been a good place to set a trailing stop and let your profits run.) The basic template setup for the Cornflower Blue Strategy is: 8 EMA – Using a yellow dotted line12 EMA – Using a violet solid line24 EMA – Using a cornflower blue solid line72 EMA – Using a khaki solid line Each EMA represents a different time frame and tells you what the market is doing in the short term, as well as in the long term, and everything in between. The 8 EMA is the most immediate or shorter term moving average, staggered all the way up to the 72 EMA which reveals the most prevailing and long term trend for the market at that time.The 12 EMA will be the place where there is the most support when the trend is strong. This setup should be done on the 1H chart which is where you will want to watch and typically place your trade. To establish the trend all EMA’s should be lined up in order, and heading in the same direction (up or down). Entry: Once there has been a breakout, or the establishment of a new trend, wait until the market slows down a little, and watch for a pullback to the 12 or 24 EMA. (If it is a strong trend it will likely just bounce off of the 12 EMA.) When there is a pullback, place a trade on the next new candle. Exit: A typical Cornflower Blue trade will run around 20 pips, but if there has been news, or it seems particularly strong, you can set your take profit for a higher pip value and just use a trailing stop to get as many pips as you can. (Or if want to be conservative, place a TP for 20 pips and watch for another pullback later in the trading day.) Stop Loss: A good stop loss would be between 5-10 pips. When you start with the Cornflower Blue trading strategy, you may want to give yourself a little more room (in other words, widen your stop loss) initially, but as you learn to streamline your entrance timing, a smaller stop loss will be sufficient. A few additional tips when trading with the Cornflower Blue Strategy: 1. Even though you want the 1H to be your main chart, if you flip up to the 4H, and down to the 30M and 15M, you can see if the 8, 12, and 24 EMA’s are all on the same side of the 72 EMA. This will help to confirm the trend direction and its possible strength. 2. Wait for the first 5-10 minutes for a new candle to indicate its possible direction, and then place your trade if it’s heading in the direction of the trend. 3. If your candle slows down, and your price pauses or stalls, you may want to consider exiting the trade (or at least lightening up on your position). Contrary to what you may have heard, you don’t always need a large amount of pips from each trade to be a successful Forex trader. Risking a small amount per trade and gaining a small amount of pips consistently over time can make you rich quicker than you may realize. Consistency is the key, though, and to be consistently profitable you must know at least one profitable trading strategy and become an expert at it. All it takes to be a successful trader is a good money management strategy, psychological discipline, and proficiency in at least one profitable trading strategy. The great thing about the Cornflower Blue strategy is that is an extremely simple, yet reliable method of trading Forex on any major pair. It is great for beginners because of the simplicity, and because teaches you to identify trends, which will be helpful with other methods of trading as well. You won’t have to risk much, but you can potentially gain a lot of pips, without a lot of stress and worry, using this trading method.
With following of balanced system Strategy and using multiple Indicators you have a grater chance to enter into a winning trade. - TimeFrame: 1 hour recommended works on others as well - Symbol: EURUSD preferred but it works on any currency - Risk: MAX 1% of account equity per order - Indicators: - Moving Average (200 EMA) - Relative Strength Index (RSI 14) - Stochastic Oscillator (14, 3, 3) - MMA Colored_v3 (Fast: 5, Mode_Fast: 1, Slow: 10, Mode_Slow: 1) Balanced System Strategy Overview: Make sure you have your chart setup right as above for the Balanced system strategy to work. You can download all indicators below. For better results make sure you do NOT trade at least 30-60 minutes before major news releases. Also make sure if you still have open order when major news is about to hit make sure you set your BE and SL appropriately. We will be entering BUY orders only if PA is above EMA 200 or SELLing orders only if PA is below EMA 200. First sign to enter the order is when EMA 5 crosses EMA 10. If it crosses above then BUY orders should be considered. If it crosses below then SELL orders should be considered. For confirmation you should always check RSI that for BUY orders RSI is above 50 and for SELL orders RSI is below 50. Second confirmation is Stochastic that its moving up and should be below 80 for BUY order or Stochastic is moving down and it should be above 20 for SELL order. Balanced System Strategy Entry Rules: - if PA is above EMA 200 then consider only BUY orders if its below EMA 200 then consider only SELL orders (if EMA 5 and EMA 10 and EMa 200 are really close together consider skipping the signal even if all other signals are good to go. - if EMA 5 (green) crosses above EMA 10 (orange) after candle close this is our first confirmation signal for BUY order if EMA 5 (green) crosses below EMA 10 (orange) you should consider SELL signal - for BUY order RSI is ABOVE 50 and for SELL order RSI is BELOW 50 - for BUY order Stochastic needs to be going up (raising) and needs to be below 80. For SELL order Stochastic needs to be going down (dropping) and needs to be above 20. If all above conditions are meet you can enter either BUY or SELL order based on your signals Balanced System Strategy will work only if you follow all of the above steps. SL should be set below previous swing low or swing high. Second option is to set SL below 200 EMA. Please note: - DO NOT Trade at least 30 minutes before major NEWS is scheduled! - If EMA 5, EMA 10 and EMA 200 are close together wait for a better signal - DO NOT trade if EMA 5 does NOT cross EMA 10 so that its clear that it crossed! Balanced System Strategy Exit Rules: - Exit BUY trade if EMA 5 crosses below EMA 10 and exit SELL order if EMA 5 crosses above EMA 10. - Exit any trade if you think PA will move against you due to a Support & Resistance levels. Better take some profits then no profits.
Symphonie Matrix Strategy is easy strategy for beginners where Trend, Emotion, Sentiment and Extreme work together to form musical winning strategy. When you put that on screen you get a very powerful system for beginners and intermediate. This strategy goes well with support & resistance lines to time and predict exit out of market. First in order to be able to play with the strategy you need to get the Symphonie Matrix Indicator for MT4 and install it on your MT4 / MetaTrader 4 Platform. - TimeFrame: 5 minutes (preferred) works on all other TFs - Symbol: any currency / best on EURUSD - Risk: MAX 2% of account equity per order - Indicators: Symphonie Matrix Indicator for MT4 Symphonie Matrix Strategy Overview: This Symphonie Matrix strategy is best used on 5 min timeframe but was successfully tested on all timeframes. First thing after you install the indicator is to fine tune the settings for the timeframe you want to use it on. Indicator supports multi-timeframe options and you can drag and drop multiple indicators on the same chart to get MTF indicator (you only need to set the ForceTimeFrame option). There are other options in Symphonie Matrix Strategy for Trend, Emotion, Sentiment and Extreme. Fine tuning that based on your trading and based on each timeframe is unique. For me the default options which are already set work great. Symphonie Matrix Strategy Entry Rules: We will be entering the PENDING BUY / SELL order when all four colors turn same color. Blue for BUY and RED for SELL as shown in the picture above. When Symphonie Matrix Indicator turns for example all RED on candle close we will place pending SELL order 5 pips below the candle wick which is in straight line with all four colors. Then we will wait for Price Action to come get the order. If any of the Symphonie Matrix Indicators changes color and Pending order is NOT hit we delete the order and we wait for the next same color rack. It is recommended that you delete the order even if it did not hit the Pending Order in the next 3-5 candles even if Symphonie matrix color is still the same and wait for the next change of major colors. SL should be placed 20 or 30 pips away from the Pending order or previous swing high. Please note that if your Pending order is hit you should place BE (Brake Even) to +1 or +2 pips as soon as Price Action gets 10 pips in profit! This will protect your investment if PA reverses and takes you out in negative. Symphonie Matrix Strategy Exit Rules: - There are couple of options to exit the trade. The most recommended one is to use Support & Resistance lines and exit the trade on them. - Second option is to set TP (Take Profit) with win/loss ratio of 1:1 with SL (Stop Loss). So if you set SL to 20 pips your TP should be set to 20 pips. - Third option is to trust Symphonie Matrix system and wait for Trend bar to change color and close the order.
Introduced by Martin Pring, Pin bar strategy for Forex offers an excellent way of understanding and practicing the mechanics of Forex trade. In his assertion, the trading patterns are modeled based on a specific pattern of appearance. This is compared to a candlestick with the strategy being highly applicable on major pairs and longer timeframes. The use of 1H, 4H or daily Forex charts is advised as this helps you identify the prevailing patterns before making your move within the Forex trading framework When to enter trade under pin bar strategy Under Forex pin bar strategy, a trader can enter trade early or wait for the breaking of the pin bar. Early entry to trade gets you better prices. However, there are only minimal chances of the trade working out. In this case, the entry times in the pin bar strategy are mainly either at the close of the pin or waiting for the pin bar to be retraced. In the case of making an early entry, the risk of losses is high. Consequently, the returns attached to the debut entry are also commensurately high. With the possibility of your entry coinciding with the retracement being low, the only other reliable entry is at a later date at time on retracement. However, this comes with a considerable high risk of waiting for the pin to break. Moreover, waiting exposes you to the danger of the prices not making it to the chosen retracement level. If this happens, you lose out on good trade leading to opportunity and actual losses. Profitability of a particular method in this case depends on the position at which the pin bar closes. Even at riskier conditions, aggressive initial setting of the stop loss would lead to good trade setups leading to more deterministic conditions. To try luck on both ends, some traders opt to enter at both times with more money being invested in the more predictable entry point. How and When to exit trade, take-profits and stop loss level settings: When planning your exit, you should consider the prevailing market conditions at the time of exit. This leads to you being classified as either an aggressive or conservation trader. In such a case, conservative and aggressive traders use different exit strategies. The below discussion illustrates how and when to exit for aggressive and conservative traders. Aggressive trading with ping bar strategy Here, you enter a position when the right eye price repeats after the left eye close level. In addition to this, a commensurate take-profit level is placed farther. Setting it close to the next strong level offers the most prudent decision. This leads to automatic resistance to bullish positions. In such a case, you should set the stop-loss behind the nose-bar point. However, your reward-risk ratio may be affected in the event that your speculation fails to materialize. Conservative trading with pin bar strategy Conservative traders often set their entry point below the nose bar. However, this is in most cases above the nose bar in case of a bullish setup. In addition to this, the stop-loss is set behind the nearest support or resistance level below the eyes. As a consequence, a conservative take-profit can as well be set immediately above the left eye’s lowest point. For bullish trading, the take-profit level is set above the left eye’s highest level. Spotting pin bar: You can either use some indicators that detect pin bar or you can just keep an eye open to detect the pin bar. Remember strategy is only good in high timeframes so spotting the Pin Bar should be easy and you should have enough time to plan your entries.
Scalping on 15min is very popular trading Strategy and with Towers Scalping Strategy you can have positive return in trades. It is traded with great success! - TimeFrame: 15 minutes (preferred) or 5 min - Symbol: any currency - Risk: MAX 1% of account equity per order - Indicators: - Rainbow MMA Indicator Towers Scalping Strategy Overview: With Rainbow MMA Indicator the Towers Scalping Strategy works great on 15min timeframe. If Price is above Rainbow MMA Indicator then trend is bullish. If Price is below Rainbow MMA Indicator then trend is Bearish. For the Towers Scalping Strategy to work you need to watch for Price to move towards Rainbow MMA Indicator. When Price reaches the Rainbow (wich or full candle) you check LAST 3 candles and if they are one after another rising or going down that is your Entry Point on the opposite of the last third candle. I know its confusing but you can check picture below for the explanation: Towers Scalping Strategy Entry Rules: BUY Order Example: - For BUY order price NEEDs to be ABOVE Rainbow and going towards rainbow - When Price touches Rainbow you check LAST 3 candles (including candle that touches Rainbow MMA Indicator we label it CANDLE 1) - Last 3 candles NEED to be going lower and lower with making lower highs (marked with BLACK line on below Image) - When candle closes you set PENDING order just ABOVE last CANDLE 1 wick (marked with BLUE line on below Image) - you wait MAX 2-3 next candles if Pending order is HIT take the ride to profit but if its not, delete the pending order and wait for new opportunity. - you should set SL on the opposite side of the BUY Order Candle 1 - TP is 1 times of SL so the risk / reward ratios is 1:1 Towers Scalping Strategy Exit Rules: - When TP is hit which should be 1 times of SL with risk / reward ratio of 1:1 - Second Option is to take out half order on TP and set BE to +2 pips and then let it run and exit on support / resistance levels
The timeframer indicator shows the high low currency price of the last candlestick on the following timeframe’s: Daily, 4 Hour, 1 Hour, 30 Minute, 15 Minute, 5 Minute and 1 Minute. Bullish last candle: green, Bearish last candle: red. GBP/USD 1 Hour Chart Example
The AutoFibo indicator automatically calculates and draws the Fibonacci retracement levels on the Metatrader 4 charts. The retracement levels include: 0.0%, 23.6%, 38.2%, 50.0%, 61.8% and the 100% level. The 0% to 100% trading range represents the move from bottom to the top. The most important retracement level to keep an eye on in forex: 38.2% level. Fibonacci traders typically watch this level to go long in an uptrending marktet or go short in a downtrending market. Use other indicators to pin-point your entry. USD/JPY 1 Hour Chart Example
BBands Stop is a trend following MT4 indicator that works on all time frame’s for all currency pairs. Green colored dots suggest uptrend. On the contrary, orange dots suggest downtrend. Trading Signals BUY: Open long position at the first green dot and trail your stop 1 pip below the green rising dots to lock in profits.SELL: Open short position at the first red dot and trail your stop 1 pip above the red falling dots to lock in profits. Reverse your initial trading position when the dots change color (red to green or green to red). EUR/JPY Daily Chart Example
This indicator is only designed to trade 5 day high low price breakouts. It draws two lines – 5 day high price and 5 day low price. Trading Signals BUY: Buy a close above the 5 day high price.SELL: Sell a close below the 5 day low price. GBP/USD 1 Hour Chart Example
The EMA Trend indicator is composed of 4 exponential moving averages. It identifies primary trend direction for any currency pair. Default indicator input values: FastMAPeriod: 21, SlowMAPeriod: 34 Trading Signals BUY: Buy a close above all EMA lines.SELL: Sell a close below all EMA lines. GBP/USD Daily Chart Example
Hyper EA Pro is forex trading robot. It uses scalping strategy. EA place trades only during Asian session. Statistically it opens one trade per day (rembember: not quantity but precision matters!). Hyper EA Pro uses a dynamic Take Profit and a fixed Stop Loss. Hyper EA Pro, as Forex Real Profit EA does not require a big initial deposit. You can start with as little as just $100 (however we do recommend $300 as starting capital). Soon enough you will see Hyper EA Pro quickly increasing your deposit. Features of the Hyper EA: Type of strategy: Scalping Platform: Metatrader 4 Currency pairs: EURUSD, GBPCAD, GBPUSD, USDCAD, EURCAD, USDCHF, USDJPY Trading Time: Asian session Timeframe: M15 Recommended broker: XM
Extreme FX profit indicator and EA was made by Kishore M. Below you can find characteristics of this forex trading tool: -Whenever there is profitable trade detected, it will automatically pop-up an Order Window for you to enter the trade. Target profit & stop loss are automatically set for you.-Easy-to-setup automated Buy/Sell arrow indicators on your trading chart-Over 90%++ winning accuracy (proven live-trading record)-No trading experience required-Works on all MT4 platforms-Works with all major currency pairs-Works 24 hours at anytime of the day/night-Works on ALL timeframes (recommended timeframes are 15 minutes, 30 minutes, 1 hour) so that you can make much more profit within a much shorter time)-You can choose if you want to enter the trade or not (flexibility for seasoned traders)-We have also include a powerful step-by-step video in showing you how to maximize your profit with this trading system.-The system is designed by an elite team using my proprietary Trading strategies backed up with 2 decades of my trading experience.
The new Forex Hacked Pro is multicurrency scalping robot (expert advisor) and now it can trade on nine currency pairs at the same time. Forex Hacked Pro works using the martingale method, however entries into the market are made based on three scalping strategies , which increases the propability accurate inputs and reduces the potential danger from the ordinary course of trade by the method of Martingale. Features of the Forex Hacked Pro:•Platform: Metatrader4•Currency pairs: EURUSD, GBPUSD, EURCHF, USDCHF, EURJPY, USDJPY, EURGBP, AUDUSD, USDCAD•Trading Time: Around the clock•Timeframe: H1 Naturally, testing history for Forex Hacked Pro performed for each pair separately. But in the real trading, the developers recommend installing EA with recommended settings sets (files. set) for all nine pairs to thereby to diversify risks. Of course, this makes some sense as large drawdowns moments do not occur simultaneously on several pairs, which can be clearly seen in the graphs backtest. Forex Hacked Pro works using the martingale method and so is very dangerous and can lead to complete loss of the deposit. But with timely withdrawal profits earned, can be quite profitable. A timely withdrawal of profits of the initial deposit automatically makes Forex Hacked Pro break-even. In the archives you will find following files:•Forex Hacked Pro.ex4•audusd.set •eurchf.set •eurgbp.set•eurjpy.set •eurusd.set •gbpusd.set•usdcad.set •usdchf.set •usdjpy.set
Note: the software is a MetaTrader Expert Advisor (EA), although it is not a trading robot, and does not open trades on its own. For my awesome strategy I use the PARABOLIC SAR, the GATOR indicator, and the WR indicator. BUT, the most important thing is, you don’t have any reason to worry about – I did the job for you You will get ALERTS, so you’ll never need to sit close to your computer screen and wait till all the conditions are met! I’ve built this automatic alert for you, so you can get the alert, come to your platform and open the recommended trade. You can see that the blue thumbs up icon shows the recommended direction, the entry price which is marked with blue line, the stop loss marked by the red line and the final profit target that’s marked by the green line. So all you have to do, is open the recommended trade. As an addition you can see on the top right corner, written in red:recommended entry point level, SL, TP, so you can easily use this information to enter your trade. You can see on the top left the signal information as well. So there is no way you’ll miss it When you set the target price (Take Profit) I recommend the following:Open 2 identical positions, set the same SL for both of them, but for one set the recommended take profit, and for the second trade set a take profit that is half the amount of pips than the recommended. For example, look at the picture above: the entry point is 1.6358 and the SL is 1.6210, it is 148 pips. For the second target, set 74 pips as the take profit. This is all you need to know to use the Forex Secret Agent. Now go on and maximize your profits. I remind you that you can this strategy on the following pairs:GBPUSDEURUSDEURJPY And on the following timeframes:15 min1 hour4 hours If you want to use it for more currencies you can get it in my advanced software: Forex Secret Agent Advanced. Also, if you’d like to use a robot to manage the trade for you after you entered it (like I do), get my Forex Secret Agent Trade Management EA.I wish you good luck, and profitable trades.
Forex Over Drive is a automated forex trading EA (expert advisor). Here is original description coming from authors: Utilizing our innovative system that was built from the best and brightest, utilizing advanced strategies, you can now EASILY profit through Forex Over Drive software, an automated forex trading robot that does all the work for you. Forex Over Drive has been put into action hundreds and hundreds of times, successfully providing us profits over and over. The forex robot allows you to sit back relax and make money. Unlike other forex robot software, Forex Over Drive, has been recently developed from years of research and development from professional forex traders in the industry. What if you could potentially earn hundreds or even thousands of dollars within the next 30-45 days? Better yet, what if you could earn a substantial amount of money while sleeping, eating, working, and relaxing? Well, with Forex Over Drive it is possible. Unlike many forex trading robots out there who promise to double your income overnight, Forex Over Drive is a fully automated program that offers proven results. It makes careful and confident trades that generate you cash flow while minimizing risk. How do I know? …Because we have personally tested this product over and over for quite a long time making sure it is perfect before we released it to you. In fact, we have done multiple LIVE tests with our own money to make sure this product would work: recently we deposited $150 into our trading account. Within less than 1 month we accumulated $808.54. If we can do it – without much effort – So Can YOU!
Euro fell on Tuesday for another session away from five-week highs on risk aversion as the coronavirus second wave ravages the world. EUR/USD fell 0.1% to 1.1796, after closing down 0.4% yesterday, the second loss in three days away from five-week highs at 1.1880. The dollar index rose 0.1% on Tuesday against a basket of major rivals for another day. France and the US marked fresh record highs in Covid 19 daily infections for two subsequent days, while Spain announced a new emergency state. Investors now don't expect the US to pass the new Covid relief bill before the November elections, while UK-EU talks continue in an attempt to reach a trade deal in a few weeks before the final Brexit.
USD/JPY tilted lower in Asian trade following earlier data from Japan and ahead of US data today. As of 07:00 GMT, USD/JPY declined 0.10% to 104.74, with an intraday low at 104.68. From Japan, core consumer prices fell 0.1% in September y/y, while analysts expected no change. From the US, durable goods orders are expected up 0.5% in September, while core orders are estimated up 0.3%. US housing prices are expected up 0.7% in August, slowing down from 1% in July. US Richmond manufacturing index is expected down to 18 from 21 in December, while the consumer sentiment survey is expected up to 102.1 from 101.8. The World Health Organization reported 42.97 million global coronavirus cases so far, with the death toll standing at 1.152 million.
The British pound fell against the US dollar on Monday, weighed down by concerns about the coronavirus crisis and Brexit uncertainty. British Prime Minister Boris Johnson warned that if no agreement is reached, the UK would have to accept a no-deal Brexit scenario. This came as coronavirus spreads rapidly at record rates in the UK and several European countries, which forced multiple countries to reinstate partial lockdown measures. The coronavirus continues to cast a shadow over many European countries, including France, Italy, and the UK, after the US reported a record jump in coronavirus cases by more than 80,000 cases in a single day. GBP/USD fell 0.2% to 1.3022 as of 21:18 GMT, the pair hit an intraday high of 1.3074 and a low of 1.2993.
The US dollar rose against its peers on Monday, on safe-haven demand amid growing concerns about the coronavirus crisis. The record spike of infections in several countries, especially in Europe, has led to re-imposing partial lockdowns and quarantine restrictions. The US reported a record jump in coronavirus cases by more than 80,000 cases in a single day. While the November 3 US presidential election is approaching, the race has intensified between the Republican candidate Donald Trump and his Democratic rival Joe Biden. This came amid the lack of an agreement between the US Congress and the White House on the second Covid-19 aid package. The dollar index rose against a basket of currencies by 0.3% to 93.02 points as of 19:20 GMT, after hitting a high of 93.1 and a low of 92.7.
The Canadian dollar fell against most currencies on Monday, amid growing pressures on oil prices due to concerns about the coronavirus crisis and the reimposition of lockdowns to curb the second wave of infections. The US reported a record jump in coronavirus cases by more than 80,000 cases in a single day. The American health authorities stressed their readiness to contain the disease, adding that efforts in tracking and testing are continuing. From the oil market, WTI crude November futures at Nymex fell 3.3% to $38.5 a barrel as of 17:19 GMT, after hitting a high of $39.7 and a low of $38.2. Brent December futures fell 3.2% to $40.4 a barrel, with a high of $41.6 and a low of $40.2. As of 17:34 GMT, CAD/USD fell 0.7% to 0.7566, after hitting a high of 0.7623 and a low of 0.7565.