Friday / December 6, 2019 / 10:20 a.m. PST This was probably among one of the biggest single successful trades I've enjoyed, though I was simply fortunate that the Canadian numbers broke in my favor without the market makers stopping me out before taking price in the "right" direction. However, I don't understand how MT4 calculates today's winning percentage at just 86%. I'm not seeing which of the above long positions constituted a loss trade.
Tuesday / December 10, 2019 / 10:30 p.m. PST There is a strong possibility that at the beginning of 2020 I will be setting aside my OANDA account and redirecting my attention to focus on trading via Binary dot com along with a partner living in Europe. Given that the way I trade now is based largely on statistical odds or mathematical probability, I want to take a look at the different choices Binary offers to see in any of them are more suited to such an approach than all the others. First I want to see exactly what is meant by Higher / Lower. WINNING THE CONTRACT If you select "Higher", you win the payout if the exit spot is strictly higher than the barrier. If you select "Lower", you win the payout if the exit spot is strictly lower than the barrier. If the exit spot is equal to the barrier, you don't win the payout. EXIT SPOT The exit spot is the latest tick at or before the end time. The end time is the selected number of minutes/hours after the start time (if less than one day in duration), or at the end of the trading day (if one day or more in duration). The start time is when the contract is processed by Binary dot com’s servers. Note: Higher/Lower contracts will be refunded at the purchase price if there are less than 2 ticks between the start and end times. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This setup looks much better than NADEX. First of all, you can set your barrier (strike price) anywhere you want it and you don't have to worry about whether there will be any buyers for your "uniquely" priced contract. Presently, I’m looking at a default barrier for AUDJPY of 74.512, so right now, it is in-the-money. That is a whopping 40 pips away from where price is presently located, yet the payout is the equivalent of $36 in NADEX terms, whereas NADEX would probably only pay out about $12 or $15 at the most. Sure, NADEX would not require risking the full $100, but I would rather risk $100 to make $36 than risk $88 to make only $12 (or $85 to win just $15).
Wednesday / December 11, 2019 / 12:04 a.m. PST Hypothetically, this choice looks very attractive to me, because Numerical Price Prediction is specifically based on establishing price ranges and recognizing Bona fide price reversals, so if I set a barrier that is right about the price range right after price reverses direction, I can potentially realize a payoff that is ten times my investment. I'm looking forward to testing this theory because if it turns out to be true, it might very well prove to be my "bread and butter" as they say.
The last two options I see offered by Binary dot com involve deciding if an asset is going to remain inside a set range, and whether it is going to close outside a defined range. Looking at the range Binary set for AUDUSD, my forecast model in no way anticipates the rate breaking the upper of lower barrier, so I went ahead and purchased a contract to test my numbers. If the pair does indeed stay within the range by the close of the current 24-hour market cycle, my return will be more than four times my investment.
Upon closer inspection, I just realized that by "end of the trading day" what Binary dot com actually means is end of the next trading day. This will slightly alter my strategy for using the ends between/outside and the stays between/goes outside options.
For my information... Front-Running and Collusion in Forex Trading 67 Pages Posted: 11 Jun 2019 Martin D.D. Evans Georgetown University - Department of Economics Date Written: May 30, 2019 Abstract This paper examines the market-wide effects of front-running and information-sharing by dealers in a quantitative microstructure model of Forex trading. Recent investigations by government regulators and court proceedings reveal that there has been widespread sharing of information among Forex dealers working at major banks, as well as the regular front-running of large customer orders. I use the model to study the effects of unilateral front-running, where individual dealers trade ahead of their own customer orders; and collusive front-running where individual dealers trade ahead of another dealer's customer order based on information that was shared among a group of dealers. I find that both forms of front-running create an information externality that significantly affects order flows and Forex prices by slowing down the process through which inter-dealer trading aggregates information from across the market. Font-running reduces dealers' liquidity provision costs by raising the price customers pay to purchase Forex, and lowering the price they receive when selling Forex. These cost reductions are substantial; they lower costs by more than 90 percent. Front-running also affects other market participants that are not directly involved in front-running trades. The information externality makes these participants less willing to speculate on their private information when trading with dealers. This indirect effect of front-running can reduce participants' expected returns by as much as 10 percent. My analysis also shows that collusive front-running has larger effects on order flows than unilateral front-running because information-sharing reduces the risks dealers face when trading ahead of customer orders. However, in other respects, the effects of collusive and unilateral front-running are quite similar. Greater collusion lowers the costs of providing liquidity and it reduces other participants' expected returns, but the effects are small.
For my information... Lessons from the Evolution of Foreign Exchange Trading Strategies Midwest Finance Association 2012 Annual Meetings Paper 35 Pages Posted: 15 Sep 2011 Christopher J. Neely Federal Reserve Bank of St. Louis - Research Division Paul A. Weller University of Iowa - Department of Finance There are 2 versions of this paper Date Written: September 14, 2011 Abstract The adaptive markets hypothesis posits that trading strategies evolve as traders adapt their behavior to changing circumstances. This paper studies the evolution of trading strategies for a hypothetical trader who chooses portfolios from forex technical rules in major and emerging markets, the carry trade and U.S. equities. The results show that forex trading alone dramatically outperforms the S&P 500. But there is little gain to coordinating forex and equity strategies, which explains why practitioners consider these tools separately. In addition, a backtesting procedure to choose optimal portfolios does not select carry trade strategies until well into the 1990s, which helps to explain the relatively recent surge in interest in this strategy. Forex trading returns dip significantly in the 1990s but recover by the end of the decade and have greatly outperformed an equity position since 1998. Overall, trading rule returns still exist in forex markets – with substantial stability in the types of rules – though they have migrated to emerging markets to a considerable degree.
Sunday / December 15, 2019 / 1:55 a.m. PST Previously I’ve written that my approach to trading is based on the biblical principles of testing everything and holding fast to that which is good, and knowing how to judge the signs of the times. To this I would now add the notion that the professional and institution money driving price action in the financial markets leaves tracks, and by recognizing and following these tracks when present, retail players can trade with confidence, competence, and authority. Consequently, the goal of a retail trader ought be to become a human sensor—a trained financial market tracker able to identify, observe, interpret and follow the numerical evidence left behind by the big multinational banks and institutional hedge funds. In so doing, though operating as a little fish in a big pond, the participant gains the skills required to play the game successfully, thereby becoming a self-sufficient trader who does not need the advice of brokers, financial advisers, or hotline services—a seasoned sailor who can apply skills, strategies, tactics and techniques which virtually guaranty profitability as the trader navigates his or her way through the financial markets.
Wednesday / December 25, 2019 (Christmas Day) Ha! It looks like my brain is not going to turn off for the holiday... For several years now my desire has been to use chart configurations that allow me to view all the different time frames in which I am interested on a single graph. However, I just finished deleting almost all of the profiles I created since “finalizing” my chart setups two or three months ago so that I am left with a single definitive daily, hourly, 15-minute and 5-minute crème de la crème chart setup based on the enhanced protocols stemming from tactics recently devised for optimizing the potential profits offered by the various binary option contracts available at Binary dot com. The information delivered within each time frame is so detailed/nuanced that putting everything on one chart is no longer feasible, with the strengths of each chart, at least in part, being as follows… The daily charts provide the “cleanest” picture of the day-to-day trend and daily price ranges. However, daily charts don’t pick up on initial reversals in the daily trend until a little late in the game, making it necessary to refer to lower time frames for the earliest possible “heads up” as to when the day-to-day trend might be changing direction. The hourly charts are great for signaling when market structure might be setting up ideal entry levels with respect to pullbacks in the day-to-day trend, and does so in relation to dynamic support and resistance levels based on typical price ranges from the perspective of at least three different time frames The 15-minute chart setup pretty much does the same thing as the hourly chart setup except that it: (1) does so from a slightly different angle in terms of the standard indicators employed; (2) uses three moving averages to convey the day-to-day trend instead of just one; and (3) adds a Donchian channel to help define price ranges/trend reversals. (It also suggests intraday entry levels and take-profit targets for scalping/day trading.) Five-minute charts highlight precise entry levels once the hourly charts signal possible impending high-probability trade setups. They also pinpoint pullbacks in the short-term intraday trend to suggest the absolute optimal entry levels regardless of one’s approach to trading, whether scalping, day trading, or swing trading.
Saturday / December 28, 2019 11:00 p.m. PST I just listed the Forex markets day-to-day bias under my market forecast thread and noted that EURAUD has the "wrong" colored candlestick for its bearish sentiment, so I checked the one-hour chart to see if it would make sense to enter a short position at the start of the week (and it would not). I won't go into detail regarding what I saw in that it is not the reason for posting this entry. Actually, what I wanted to do was note that I believe next week's trading should be extremely systematic. What last week's experimentation with Binary dot com has yielded is, I think, a truly objective, ultra-methodical approach to trading. For future reference, I just wanted to note the the chart profiles involved in this approach are the ones I call... Just the Daily Direction Extra One-hour Set Barrier at Reversal with 5-Min Binary Option Tunnel Zero-lag MAs Only Five-minute Tube AND Pullback AND Binary Option Tunnel LITE 3 One-minute Major Reversals REFINED