Monday, December 24, 2018

Currency Strength Review 2018

Here's a chart of currency strength % change since the start of the year.


More information on currency strength can be found here.

Happy Holidays and Best Wishes for 2019!

Wednesday, November 7, 2018

FXCM Accounts and Trade Copying / Mirroring

European forex / CFD market is going through some hard times currently due to the new ESMA (European Securities and Markets Authority) rules which has increased margin requirements for retail forex and CFD trading, as well as prohibited some types of trading altogether.

One solution to this is to "off-shore", i.e. seek a broker outside the EU, which will take non local clients.

There are some downsides to this: 1) lack of regulation / protection offered by the EU brokers; 2) moving to a different broker often means a different platform.

On the regulation / protection side, well that's up to an individual's choice and risk tolerance.

On the platform side, unless you're using MT4 then likelihood is that your new broker will not support your previous platform. This is certainly the case with FXCM TradingStation / MarketScope platform that I develop for.

One solution to this problem, is to use a cross-platform trade copying / mirroring service, such as "DUPLIKIUM" (https://www.trade-copier.com/). With such a service it is possible to mirror trades from FXCM to an MT4 of other platform from a different broker. This should even work with FXCM demo account, thus it should be possible to continue using FXCM platforms and have the live trades auto-magically mirrored on the other broker's account.

I think such a service has a lot of merit, and certainly is a better option than having to totally change platform, and loosing all of your indicator / strategy setups.

It is even possible to have a scaling factor applied, for instance allowing the use of smaller trade size on one broker, and using increased leverage on the other broker.

I'm sure there are other trade copying / mirroring providers around, DUPLIKIUM just happens to be one that one of my clients mentioned.

Tuesday, October 23, 2018

Sunday, August 26, 2018

New: Currency Strength Indicator

I've just created a new Currency Strength Indicator (CSI). More details about it here.

This new indicator, is actually outwardly similar to the Currency Strength Meter (CSM), but it was completely redesigned for efficiency and architectural reasons. It also now has functionality which was only previously available with the Currency Index (CI) indicator, and as such can be seen as a combination of these two indicators.

The Currency Index, is however, highly optimised and remains the best option if just a single currency index is require to be displayed on the chart.

There are a few minor features that did not make it from the Currency Strength Meter, including the correlation study (which I might still add at a later date).

Although, this is technically a "new" indicator, I'm allowing existing Currency Strength Meter licenses to be used since it is so similar.

The legacy Currency Strength Meter will no longer be developed, but it remains functional, and can still be obtained on request if it is really required. However, apart from the few minor features that are missing, the new Currency Strength Indicator is superior to the Currency Strength Meter in most ways.




Thursday, August 23, 2018

ESMA rules on Binary options, Forex and CFD trading

New Rules

Since 31st July 2018, new rules relating to Binary options, Forex and CFD trading have come into play.

See here for details on the changes from EMSA.

In summary:
  • Binary options
    • A prohibition on the marketing, distribution or sale of binary options to retail investors
  • CFDs (including rolling spot forex)
    •  A restriction on the marketing, distribution or sale of CFDs to retail investors. This restriction consists of: leverage limits on opening positions; a margin close out rule on a per account basis; a negative balance protection on a per account basis; preventing the use of incentives by a CFD provider; and a firm specific risk warning delivered in a standardised way.

The leverage limits are:
  • 30:1 for major currency pairs;
  • 20:1 for non-major currency pairs, gold and major indices;
  • 10:1 for commodities other than gold and non-major equity indices;
  • 5:1 for individual equities and other reference values;
  • 2:1 for cryptocurrencies;

Additionally:
  • A margin close out rule on a per account basis. This will standardise the percentage of margin (at 50% of minimum required margin) at which providers are required to close out one or more retail client’s open CFDs.

These new rules affect all retail forex / CFD traders using brokers in EU.

So, what does all this mean?

Basically, you require more money in your account to open and maintain positions than you did prior to 31st July 2018. Quite a lot more, for example: under the old rules a 10K position on EUR/USD would have required £50 (assuming 200:1 leverage) it will now require £333.

Furthermore, since you need to keep the used margin level at least 50% (e.g. 60-70% would be more comfortable) then the account size required for a 10K position on EUR/USD would be about £1000+. This is of course, per 10K position; if you plan to trade bigger positions or multiple trades, then the account size should be increased accordingly.

For stock indices, it is even worse (only 10:1 leverage allowed).

(In these examples, £ was used, but similar numbers can be assumed depending on whatever currency the account is denominated in).

Go "professional"?

The new ESMA rules only apply to retail traders. If you meet certain requirements, then you can declare yourself a "professional" trader. The requirements to pass this bar may vary, but typically are something like the following:
  • Have you traded leverage derivatives in significant sizes over the last four quarters?
  • Do you have a financial instrument portfolio exceeding €500k of liquid assets?
  • Have you worked in the financial sector, in a professional position requiring knowledge of derivatives trading, for at least a year?

As a "professional" trader you will be eligible for the higher leverage rates (i.e. back to 200:1 for forex), but you do potentially lose certain protections offered to the retail trader. See this interesting article on it.

Go offshore?

Finding a broker outside of EU jurisdiction is another possibility of course, but I suspect this will also mean the loss of some financial protection.

Trade smaller and smarter?

FXCM offer micro-lots (i.e. 1K lot size rather than the more standard 10K lot size). Thus, it is possible to simply trade smaller rather than increasing account balance to cover margins. For example, a 1K position on EUR/USD requires only £33 for margin.

Of course, smaller trade size means profits and losses will be a lot less too. I notice that FXCM are actively advertising with this in mind now (even although micro-lots have been available for a number of years already).

I'm also looking at smarter trading strategies, for example being much more selective on which instruments to trade, and keeping a good handle on used margin. Some automation should help here.

Post Brexit?

Who knows, perhaps EMSA rules will not have to be adopted in a post-Brexit world!

Thursday, August 2, 2018

Friday, June 29, 2018

That GBP/USD trade looking nice now

Would have been a nice trade, had I stayed in it, over 100 pips now from entry.

Thursday, June 28, 2018

GBP/USD Demand Zone bounce maybe?

I had a shot at buying dip into this demand zone, but it went deeper than I thought, and bailed out at break-even. Shame, because it would now be doing quite well, if I had just left to original plan.

Supply / Demand Candles

Overview

The logic behind the "Supply/Demand Candles" indicator is the same as used in the "Supply/Demand Zones" and "Supply/Demand Scanner" indicators.

The indicator analyses the candle's open, high, low and close and any price gaps in order to categorise the candle as either a "Strong Up" candle, a "Strong Down" candle or a "Weak" candle. These are then high-lighted on the chart with an appropriate colour.

These candle categorisations are then used as the basic features for the more sophisticated processing of the "Supply/Demand Zones" indicator. However, even the basic features can be useful to see on the chart.

Inputs


Screenshots


Availability

The indicator isavailable to purchase for MarketScope 2.0 via the Store page, either separately or as part of the "Supply/Demand Bundle".

Friday, June 22, 2018

Update: Supply/Demand Zones Indicator and Scanner

New version of the Supply/Demand Zones indicator and Supply/Demand Scanner are on the server.

Supply/Demand Zones (Release 4):
  • Fixed duplicate zone issue

Supply/Demand Scanner (Release 3):
  • Cosmetic changes for mini-chart graphics

More information about these indicators can be found here.

Thursday, June 21, 2018

Vote change at BoE hints at future rate hike

Vote change at BoE hints at future rate hike, causing a spike in GBP against other currencies. Here is GBP/USD H1 chart, which shows the price move stopping at the identified supply zone levels.

Friday, May 18, 2018

Thursday, May 17, 2018

Supply/Demand Zones (GBP/USD, EUR/USD)

Some nice trade-able levels on GBP/USD and EUR/USD. Unfortunately, I messed up by entering too early, exiting too early and not making anything. Next time.



More information on the Supply/Demand Zones indicator can be found here.

Wednesday, May 16, 2018

Monday, May 14, 2018

Supply / Demand trades

Just really scalping here, testing out the entries, picking up a few pips here and there.



More information on the Supply/Demand Zones indicator can be found here.

NZD/USD Supply / Demand Trade


More information on the Supply/Demand Zones indicator can be found here.

EUR/USD Supply/Demand trade

This trade was taken using automatic trading strategy utilising the Supply/Demand Zones indicator. Exit was taken manually at R1.


More information on the Supply/Demand Zones indicator can be found here.

Friday, May 11, 2018

Supply / Demand Scanner (Release 2)

Just uploaded a new release of the Supply / Demand Scanner.

Release 2:
  • Added flexible time-frame input

With this change, a comma-separated list of time-frames is used (e.g. m5, H1, H4, D1, etc.). This allows more or less time-frames to be specified, rather than the fixed number (only 3) in the previous version.


More information can be found here.

Candle Pattern Scanner (Release 6)

Just uploaded a new release of the Candle Pattern Scanner.

Release 6:
  • Added flexible time-frame input

With this change, a comma-separated list of time-frames is used (e.g. m5, H1, H4, D1, etc.). This allows more or less time-frames to be specified, rather than the fixed number (only 3) in the previous version.

More information can be found here.

NZD/USD Supply/Demand trade

Zone looked ok, but price action on the re-test was a bit choppy, and the trade didn't really seem to move, so took off at small profit.

New: Supply / Demand Scanner

Just released a new indicator. It is a scanner to accompany the Supply/Demand Zones indicator.

The Supply/Demand Zones indicator attempts to identify quality supply/demand patterns in price action, which are then high-lighted on the chart.

The Supply/Demand Scanner further enhances this capability by simultaneously analysing multiple instruments at 3 different time-frames. The indicator displays a “mini-chart” for each specified instrument and time-frame combination, showing the currently identified supply/demand zones (if any).

This indicator utilizes the Supply/Demand Zones Indicator directly, and therefore uses the same mechanisms and formula to detect the supply/demand patters. Please refer to the Supply/Demand Zones Indicator for details of this operation.

The indicator can display the zones, either on the “mini-chart” (in several styles) or as text.


The Supply/Demand Scanner does not show the same level of detail (such as zone’s start/end times, height, penetration level, number of touches, etc.). The intention is that the scanner provides an overview of nearby zones (with alerts), and then detailed analysis can be made on a separate chart using the Supply/Demand Zones indicator. The obvious benefit being that the scanner can simultaneously monitor many instruments and time-frames.

The Supply/Demand Scanner can provide alerts whenever prices crosses above the bottom of a supply zone, or crosses below the top of a demand zone. Alerts can be configured for sound, pop-up or email.

Screenshots





Further information can be found here.

Thursday, May 10, 2018

Supply/Demand EUR/USD Scalp

This supply zone was already depleted, but confluence with R2 was worth a couple of quick scalps.

Supply/Demand Scanner (sneak preview - early Beta)

Still work in progress, but it's getting there. The scanner can be set to alert for supply/demand zones on multiple instruments and time-frames. Current active zones can be displayed as text or graphically.

Candle Pattern Indicator and Scanner updated

Some minor tweaks to the Candle Pattern Indicator and Candle Pattern Scanner, mainly internal, also small change to the alert message.

More information can be found here and here.

Wednesday, May 9, 2018

Supply/Demand Trades (taken using the scanner)

Running the new Supply/Demand Scanner today, and took a number of trades after being alerted to the price touching the zones. Small trades only (both in size and profit target).



Supply/Demand Zones Scanner

Working on the Supply/Demand Zones Scanner, which will monitor multiple instruments and time-frames, indicating nearby supply/demand zones, and also providing alerts when a zone is touched by price.

This is still a work-in-progress, and there is much to do, but the basic system with alerts is working.

Here's a couple of screenshots.



More information about the Supply/Demand Zones indicator can be found here. The "scanner" that compliments the "SD Zones" should be ready by end of the week.

Tuesday, May 8, 2018

Supply / Demand Zones on DAX (GER30 CFD)

On indices such as DAX (GER30 CFD), the zones seem to work best when wicks are including in the base candles. Here you can also see a major gap-up (overnight) which is also picked up and handled by the indicator.


More information on the Supply/Demand Zones indicator can be found here.

Wednesday, May 2, 2018

Computational Trading: Supply Demand Zones

Computational Trading: Supply Demand Zones: Overview A full study of the laws of supply and demand is outside the scope of this user guide. However, the following basic ideas should ...

Tuesday, May 1, 2018

New: Supply / Demand Zones Indicator (SD Zones)

Hot off the press: the new "Supply / Demand Zones" indicator (called "SD Zones").

This is something I've been working since last year, but it took me some effort to pull this together. I was originally hoping to just treat this as an update of my existing "Supply / Demand" indicator, however there were a number of technical and logistical reasons why this was possible. In fact, the indicator is almost entirely re-written, and only the graphic handling remains the same. I also had a number of legacy systems and trading strategies that were using the old "Supply / Demand" indicator, and I did not want to disturb those.

The new indicator uses a completely different method to detect supply / demand zones. One of the main issues with the old indicator was that it required some parameter tweaking to reliably detect good zones. The new indicator, is a lot more automated in this respect, and gives very good results over a large range of instruments and time-frames.

I've also added support for alert notifications (both when new zones are detected, and when price touches an existing zone).

I also plan to add a "scanner" for this indicator, which will provide the ability to monitor multiple instruments and time-frames in a simple fashion. I'm also developing an automated trading strategy, to be used in-house initially.

Initial results are looking very promising.




I'm still putting finishing touches to the documentation. Should be ready very soon.

Friday, April 20, 2018