Information technologies are expanding exponentially. Artificial intelligence marks significant progress in the last few years. Researchers now have more sophisticated tools for analyzing data sets and make accurate forecasts. Trading robots become more and more sophisticated and their performance increases. Automated robots already outperform the human trading in several ways: robots monitor the market 24
In this post a simple price frequency analysis technique will be revealed and utilized to display support and resistance zones. The concept of support/resistance is commonly used in technical analysis and is usually represented as levels that act as price barriers. Price usually bounces back from these support/resistance lines or if overcome a strong price
Today will review and compare some betting strategies commonly used in Forex trading as well. It’s important to note in the beginning that these strategies are used when there are two possible outcomes with equal probability of occurrence. Although this is not an absolute requirement, that is most often the case. For sake of simplicity we will also assume that your losses and profits are of equal amounts. Traders are often tempted to apply these techniques in their trading with variable success. Let’s go in detail and compare the numbers.
From mathematical perspective the financial price movements are considered to be a random walk. The price depends on so many factors that it becomes impossible to forecast. The random walk price movement is often explained using a coin flip to determine the next day price. If the result is heads the price goes up, if the result
Artificial neural networks are mathematical models inspired by the biological structure of the brain. They are used to approximate complex unknown functions which depend on many input parameters. They have the ability to learn from examples and gather experience over time. Neural networks are gaining popularity and are already used in various areas like: function
In this post we will discuss some other basic aspects of pair trading. As we have already discussed, correlation is usually utilized in pair trading. However, it is not enough for the two instruments to be just highly correlated. It’s believed that they should be aslo cointegrated. Cointegration is a statistical property of two or
Bollinger Bands is one of the commonly used technical indicators. It is also one of our favorite indicators because of its properties. It was introduced by John Bollinger back in the 1980s. Its purpose is to define how high or low the price is, compared to the previous periods. Bollinger Bands consists of three lines:
Pair trading is a market neutral trading strategy. It involves trading on highly correlated instruments. For detailed explanation on correlation please refer to our previous post. The idea of pair trading is to wait for periods of weak correlation between the two highly correlated pairs/instruments, going long on one of the symbols and short on
Hello traders, Using data from Myfxbook we’ve created a Market Sentiment Indicator or Community Outlook as named by Myfxbook. Data shows what percentage of the traders hold long positions on a currency pair and what percentage of the traders hold short positions. Some more additional data is provided: long and short volume, total number of
In this post we will try to briefly explain the term correlation and how it can be used in Forex trading. Generally correlation refers to a statistical relationship between two variables. In Forex it is a measure of how two currency pairs move in relation to each other. Correlation is useful because it can indicate