There are thousands and maybe millions papers, books, articles related to trading the financial markets. Known and unknown authors publish for free or sell all kind of trading strategies, manuals, technical analysis guides, advanced trading models, complicated mathematical algorithms with the purpose to make profit by trading financial instruments. The fundamental truth about trading is
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
Hello, Appologies for not being quite active recently, it is due to lack of time. Most of my time is spent in software development and the posts get delayed. There are some other topics I’d like to share and discuss with readers. The next one I plan to do is about neural networks. When artificial
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
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
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
Hi all, Welcome to our new website. Thanks for being with us during the past years. Now we start a new blog where we will post interesting articles about trading strategies, automated trading, analysis, tools, etc. We plan to develop and release some useful products for free. You will just need to sign up for