Position Size - forex trading times london

Position Size ~ forex trading times london

A position sizing rule determines the number of contracts or shares that are committed to each trade.

It is very easy to see the impact of position sizing at either extreme.

If we trade a position size that is too small—for example, one S&P con- tract per $1,000,000—our trading equity is not being used at optimal levels. Conversely, a position size that is too large—for example, 100 S&P per $100,000—for our capital can increase our risk of ruin to certainty.

Only the most naive and inexperienced of traders will be ensnared by either of these extremes. It is in the area between these two opposite ends of the spectrum, however, where a sizing rule will have the most impact on strategy performance, whether positive or negative.

The best and most efficient sizing principle will be the one that applies our trading capital in an optimal manner so as to achieve maximum returns with an affordable risk.

We will look at four position sizing examples:

1. Volatility adjusted

2. Martingale

3. Anti-Martingale

4. The Kelly method

A volatility adjusted sizing rule uses the size of the account and the size of the risk assumed per contract per trade.

Definition: Volatility adjustedposition sizing determines the number of contracts or shares per trade as a fixed percentage of trading equity divided by the trade risk.

For example, assume:

1. A risk size of 3 percent of equity

2. A risk per contract of $1,000

3. An account size of $250,000

The trade unit would be seven contracts and is calculated as follows:

Total Equity to Risk = $7,500($250,000 × .03)

Number of Contracts = 7($7,500/$1,000 = 7.5 rounded down = 7)

An example of a well-known money management rule is the Martingale strategy. It is derived from a gambling money-management method.

Definition:The Martingale sizing rule doubles the trade size after each loss and starts at one unit after each win.

There are a number of variations on this theme. One such variation is anti-Martingale.

Definition: The anti-Martingale sizing rule doubles the number of trading units after each win, and starts at one unit after each loss.

Optimal f (fixed fractional trading) was introduced by Ralph Vince in 1990. It is based on a formula derived from the Kelly method, which was, in turn, applied by Professor Edward Thorpe to gambling and trading.

Let us look at one implementation of the Kelly formula.

Kelly% = (Win% ? Loss%)/(Average Profit/Average Loss).

Position size

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AUDCHF pe suportul dinamic 2x1 - forex trading platforms in nigeria

AUDCHF pe suportul dinamic 2x1 ~ forex trading platforms in nigeria

Ieri, postam o scurta analiza in care afirmam ca dolarul australian este gata de short in fata francului elvetian. Dupa cum putem vedea in graficul de mai sus pretul a reusit sa strapunga in forta unghiul 1x1 ascendent si in acest moment se gaseste pe zona de suport dinamic a unghiului 2x1. Acest nivel de suport dinamic este extrem  de important.  Daca acest nivel de suport va fi strapuns se va deschide cale libera spre zona noastra de targetare de pe suportul dinamic 8x1. Tinta noastra finala pentru aceasta tranzactionare este insa mult mai jos, la 0.6910.

Înscrieri la Cursurile de Analiz? Gann ?i abonare la Buletinul de Analiz? S?pt?mânal? Gann pe email
gannmasterforex@gmail.com  si pe Patreon.com

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AUDCHF marcheaza primul target la 109 pips - forex trading platforms uk

AUDCHF marcheaza primul target la 109 pips ~ forex trading platforms uk

Ieri recomandam deschiderea unei pozitii short pe AUDCHF dupa strapungerea nivelului de suport dinamic al unghiului 1x1. Prima tinta vizata de noi era nivelul de suport dinamic al unghiului 8x1. Dupa cum se poate vedea in graficul nostru de 4h postat mai sus in acest moment pretul se gaseste pe suportul dinami 8x1. Intr-o analiza din cursul acestei dimineti semnalam ca vizam un al doilea target mai jos in zona lui 0.6910. Va trebui insa sa avem rabdare. Marcam aici partial profitul la +109 pips si ramanem short in free trade.


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Stochastic power ranger trading system - forex trading hours japan

Stochastic power ranger trading system ~ forex trading hours japan

Stochastic power ranger trading system is a momentum strategy.

Time Frame H1 or higher.

Currency pairs: majors at the H1 time frame.

Stochastic power ranger trading system is based on the concept that a range will form after the market finishes trending. We use the stochastic to give us an indication of a possible range formation. We also rely on the current market momentum to tell us when to go long or short. If the market is moving in an uptrend, we look to go long in the range. The entry is determined by the

oversold region (below level 20) of the stochastic.

If the market is moving in a downtrend, we look to go short in the range. The entry is determined by the overbought region (above level 80) of the stochastic. We use the most recent high and low to determine the possible resistance and support of the range.

This strategy has two profi t targets, and we take the fi rst profi t target within the range. The second profit target.

Rules Stochastic power ranger

Long Trade Setup

We use EUR/USD on the H1 time frame to illustrate a long trade. Here are the steps to execute the Stochastic power ranger strategy for long:

1. Draw an uptrend line based on a series of higher highs and higher lows. (See Figure 1 .)

2. On the stochastic, look for %K and %D to go below level 20 (oversold). (See Figure 2.)

3. Determine the support and resistance of the range. Enter long once the stochastic crosses above level 20.

4. Set the first profi t target at the 75% mark of the range. Set the stop loss at a risk to reward ratio of 1:1, and set the second profit target at risk to reward ratio of 1:2. After calculation, the stop loss must be below the support level. If not, the trade is considered invalid. (See Figur3 .)

1

2

3

4 Stochastic power ranger trading system

from the long example in Figure 4 :

Entry price = 1.2919

Stop loss = 1.2877

Profit target 1 = 1.2961

Profit target 2 = 1.3003

The risk for this trade is 42 pips, and the reward is 84 pips if both targets are hit. The risk to reward ratio is 1:2, which yields a tidy 6% return if we take a 3% risk.

Short Trade Setup

We use AUD/USD on the H1 time frame to illustrate a short trade. Here are

the steps to execute the power ranger strategy for short:

1. Draw a downtrend line based on a series of lower highs and lower lows. (See Figure 5 .)

2. On the stochastic, look for %K and %D to go above level 80 (oversold). (See Figure 6 .)

3. Determine the support and resistance of the range. Enter short once the stochastic goes below level 80.

4. Set the fi rst profit target at the 75% mark of the range. Set the stop loss at a risk to reward ratio of 1:1, and set the second profi t target at risk to reward ratio of 1:2. After calculation, the stop loss must be above the resistance level. If not, the trade is considered invalid. (See Figure 7 .)

5

6

7

8 Stochastic power ranger trading system

From the short example in Figure 8 :

Entry price = 1.0624

Stop loss = 1.0700

Profit target 1 = 1.0548

Profit target 2 = 1.0472

The risk for this trade is 76 pips, and the reward is 152 pips if both targets are hit. The risk to reward ratio is 1:2, which yields a tidy 6% return if we take a 3% risk.

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AUDCHF marcheaza cel de al doilea target la 250 pips - forex trading hours new year

AUDCHF marcheaza cel de al doilea target la 250 pips ~ forex trading hours new year

Saptamana trecuta am initiat o pozitie short pe perechea AUDCHF . In ultima noastra analiza pe aceasta perechea spuneam:
"Ieri recomandam deschiderea unei pozitii short pe AUDCHF dupa strapungerea nivelului de suport dinamic al unghiului 1x1. Prima tinta vizata de noi era nivelul de suport dinamic al unghiului 8x1. Dupa cum se poate vedea in graficul nostru de 4h postat mai sus in acest moment pretul se gaseste pe suportul dinami 8x1. Intr-o analiza din cursul acestei dimineti semnalam ca vizam un al doilea target mai jos in zona lui 0.6910. Va trebui insa sa avem rabdare. Marcam aici partial profitul la +109 pips si ramanem short in free trade".
In graficul nostru de mai jos, actualizat in cursul acestei dimineti puteti sa vedeti ca pretul a traversat cel dea-l doilea nivel de targetare mentionat de noi la 0.6910. Am decis sa marcam partial profitul la +250 pips dupa formarea unui shooting star care ne semnaleaza intrarea pretului intr-o noua miscare de corectie. Pozitia este mutata la BE+ suntem in continuare short in free trade. Dupa finalizarea acestei corectii vom reincarca aceasta pozitie short cu un nou target in zona lui 0.66.
Consideram ca orice raliu este o buna oportunitate de shortare a acestei perechi.

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Forex trading with Volatility Market - forex market hours live

Forex trading with Volatility Market ~ forex market hours live

We will identify volatile market for forex trading:

Bollinger bands: very wide or visibly wider compared to last flat period.

CCI: levels of this indicator are far from 0 line and changing consistently to any direction.

RSI: levels of this indicator are below 40 or above 60, changing direction. We avoid trading if it stays somewhere around level of 50, as it indicate price consolidation or flat market.

Scenario 1 – moderate swings

Open buy:

(1) EMA5 crosses EMA10 from below to upper direction, (2) RSI crosses 50 line from below to upper direction and (3) Stochastic direction is up or just changed direction to up.

Important: if Stochastic indicator meets buy conditions, one of (1) and (2) conditions are met and other are close to these conditions buy order also should be opened.

Close buy:

(1) EMA5 crosses EMA10 from above to lower direction or (2) RSI crosses 50 line from above

to lower direction or (3) Stochastic crosses level of 80 from above to lower direction.

Open sell:

(1) EMA5 crosses EMA10 from upper to lower direction, (2) RSI crosses 50 line from above to lower direction and (3) Stochastic direction is down or just changed direction to down.

Important: if Stochastic indicator meets buy conditions, one of (1) and (2) conditions are met and other are close to these conditions sell order also should be opened.

Close sell:

(1) EMA5 crosses EMA10 from below to upper direction or (2) RSI crosses 50 line from below

to upper direction or (3) Stochastic crosses level of 20 from below to upper direction.

Scenario 2 – seeking for extremes

Open buy:

(1) Price candles became far below both EMAs and current current candle touches EMA5, (2) RSI reached level of around 30 or less and is reversing upwards and (3) Stochastic is below 50 line and it‘s direction is up or just changed direction to up and (4) CCI reached level below -100 (optimal if below -200) and is reversing upwards.

Important: if Stochastic indicator meets buy conditions, one of (1) (2) and (4) conditions are met and other are close to these conditions buy order also should be opened.

Close buy:

(1) EMA5 crosses EMA10 from above to lower direction or (2) RSI crosses 50 line from above

to lower direction or reached level of about 50 and reverses downwards or (3) Stochastic crosses level of 80 from above to lower direction.

Open sell:

(1) Price candles became far above both EMAs and current current candle touches EMA5, (2) RSI reached level of around 70 or more and is reversing downwards and (3) Stochastic is above 50 line and it‘s direction is down or just changed direction to downwards and (4) CCI reached level above 100 (optimal if above 200) and is reversing downwards.

Important: if Stochastic indicator meets buy conditions, one of (1) (2) and (4) conditions are met and other are close to these conditions sell order also should be opened.

Close sell:

(1) EMA5 crosses EMA10 from bellow to upper direction or (2) RSI crosses 50 line from below

to upper direction or reached level of about 50 and reverses upwards or (3) Stochastic crosses level of 20 from below to upper direction.

Forex trading with Volatility Market

First trade we missed quite nice trade oppurtunite, because Bollinger Bands indicated flat market.

So we start with the first trade: this is moderate swing trade, CCI and Stochastic confirmed the trade, while RSI and EMAs were about to confirm the trade on past candle, so we enter at the next candle opening. Exit confirmed by stochastic.

Second trade: market became volatile, indicated by bollinger bands. In thi case we see CCI and RSI extreme. We enter trade on next candle after the signals are confirmed. Exit is indicated by RSI crossing 50 line upwards.

Third trade: Bollinger bands and CCI indicates trending market. CCI comes close to level of 0 and RSI crosses 50 line down and then crosses back upwards, while Stochastic and EMAs confirm the trade. Exit is indicated by Stochastic.

Fourth trade: all indicators indicate moderate swing trade, while Bollinger bands stays wide indicating volatile market, so we enter at the next candle. Exit is indicated by Stochastic.

Fifth trade: here we see either „seeking for extreme“ moderate swing trade situation. Seeking for extreme situation suggests entering the trade one candle earlier, although entering later would still be profitable. Exit is indicated by Stochastic.

Sixt trade: the trade is still running as I am writing explanation now. This is normal moderate swing trade, all indicator confirms that so we enter at the next candle after confirmation.

Between trades 2 and 3 there is quite confusing situation. All signals are likely to confirm buy trade, but: Bollinger bands indicates trending market. But in trending market for a possitive trade, we need CCI to stay around level of 100, not being in extremes few candles earlier. In this situation we see that CCI just recovered from extreme of over 320, so it is dangerous time to take early trade. Anyway, if by mistake we would have taken this trade, the loss would be minor, compared with all other profitable trades

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