Trading -
IF you would like to trade the markets yourself, then you may like to consider the following advice :
Do not trade with real cash before you
1) Know how to place a stop loss at the time of placing a trade
2) Understand money management and limiting your losses on one single trade to a predetermined percentage of the total pot you are comfortable about losing (because losing is definitely going to be part of your learning process)
If you are going to trade you need training . These people are genuine -
Nick McDonald who has an organisation with the name of Trade with Precision. He can train from basics through to advanced, across markets, indices and Forex. Nick does really helpful follow up mentoring sessions. He has a team of active traders working with him.
Alan Rich is connected to ClicktheMarkets
Alan teaches trading both the UK and US markets. His partner George Hallmey specialises and teaches trading forex. They run free introductory seminars.
Reading is obviously a good source of information. You could try-
An Introduction to Technical Analysis by Martin Pring
Marber on Markets
Mastering the Trade by John F Carter (esp. US market)
Carter (with his partner Hubert Senters) has a free daily broadcast you can sign up to at tradethemarkets.com
The Naked Trader by Robbie Burns. UK market, more fundamental than technical. Deceptively easy reading.
What platform should I Autotrade on?
Forex is widely traded on Metatrader, which is available as a free download from forex brokers. You can even download it free if you just open up a trial account with a broker.
The American independent trader market has possibly been dominated by Tradestation. This is a very powerful platform, and on their website they advertise the fact that you can program it yourself to autotrade, using their proprietary programming called EasyLanguage. What they do not tell you that if you do this, you will be given big warnings by the program itself that Limit orders may not be handled reliably.
I attended a days training in London on programming in EasyLanguage taught by Stan
Dash who had flown over from the States to carry out some training. I asked him
about this warning, which he told me he had not seen. Very surprising. He offered
to respond if I e-
I am still using TradeStation, but principally for historical reasons. In due course I expect to be be migrating to NinjaTrader, which programmers seem to prefer. This appears to be the way the traffic is flowing. A pity, because I am a fan of TS, but if it is not robust enough ......
I am not aware of a platform ideally suited for autotrading the UK market.
So overall you won’t be far wrong if you go for Metatrader for forex and Ninja for the US market
Programming and Programmers
Having pointed out that TradeStation may have its’ drawbacks, the fact remains that it is a very popular and powerful piece of software.
The programming language within TS is called EasyLanguage (EL). Even if you are wary of setting up autotrading with EL, it is moderately easy to set up your own indicators. I have done this for some of the ETF trading strategies mentioned elsewhere on this page.
Teaching yourself programming is not the easiest task to undertake. A very helpful structured manual is available from Bill Browers at www.insideedge.net. This is not only informative, it is also written in a way that has been used in education for thousands of years, but is a lost art to most of the computer industry; namely, the use of structured exercises to help the lessons sink in.
Insideedge have a range of products available. I first came upon them when looking
at Connors and Rashkes Book called Street Smarts. They have a program for signalling
or autotrading the strategies that are in the book. I have not been autotrading
with these strategies for two reasons -
1) Concerns about TS
2) The way the book is written, exits are subjective.
But the programming works fine.
InsideEdge will also program whatever you want for TradesStation. Though I have no experience of contracting TS programming with them, there is no doubt that they would be my first port of call. You can enquire through their website or contact Bill Brower at 1000mileman@mindspring.com.
Someone I have commissioned programming through is Ben Letto at AffordableIndicators.com.
He produced some programming for me on Metatrader -
A hub service for putting clients in touch with programmers is odesk.com. An amazing
site with access to programmers around the world -
There’s a relatively well trodden path for the person learning to trade -
That’s not necessarily the best route. Forex has a few benefits -
You can actually set up accounts with some forex firms which allow you to trade very small amounts, smaller than with spreadbetting (so your learning curve costs you less.
And the volumes in forex are so huge that they are too big for the market makers to manipulate.
And arguably forex trades more predictably?
Though do use a trial/dummy account before going live with forex trading.
But there is an even more unusual starting place. Elsewhre on this page I give you a lead on trading ETFs. This may seem a peculiarly specialised place to start, but what you are probably looking for is a way to trade profitably, without spending years attaining mastery.
To trade this method effectively you will need to open an account in America, but that is not difficult to do. Return to this site soon, and I will have updated recommendations on how to do this.
DIVIDED OPINION
Fundamental analysis versus technical analysis
Both methods have their proponents. Neither method is reliable. Advocates of one method point at failures of the other method as being some sort of justification of their own favoured approach.
Buffet has said “In the short run, the market is a voting machine. In the long run, it’s a weighing machine”.
Maybe technical analysis is best suited to short term vote assessment? Not that a chartist would agree with that statement.
A quote from Marber -
"Most technical analysts were originally fundamental analysts," he writes. "I've never heard of anyone who made the journey in the opposite direction."
The Journey of a thousand miles begins with a single step -
It helps if it’s in the right direction -
I’m not sure I totally agree with that last statement -
Are there any training companies I should avoid?
Click here
For warnings on scams and broad information on forex trading go to free site ForexPeaceArmy.com
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The Ultimate Dream -
Expert Advisers
(but beware the ultimate nightmare)
It is possible to buy a program which you install on your computer, and then allow this program to buy and sell automatically, when the programmed conditions are met. These programs are usually called ‘Expert Advisers’ or EAs for short. Generally they trade foreign exchange, or forex, and they are usually programmed to trade using Metatrader. Metatrader (MT) is a robust platform that is available free from a number of Forex brokers, and it can be programmed, if you know what you are doing, or you can hire a programmer to do the work for you.
There is nothing the matter with trading Forex using Metatrader.
Unfortunately, there is something the matter with most EAs. Careful. It isn’t the cost of the software you need to concentrate on, it’s how much of your cash this can run through for you while you’re not looking. Some of the jokers of the industry selling $69 packages also have the cheek to run warnings elsewhere about packages costing $69!!!!
There are quite a few websites that claim to be comparison sites running comparative tests for Eas, or Expert Advisers. Most of them are clearly marketing rather than analysing.
There is currently a welter of marketing going on concerning the ‘Winners’ of the Forex Robot World Cup. This was a competition apparently run live to see which Robot or EA produced the best results. On the basis of a two month trial, the ‘Winners’ have been declared, and the robots are now on sale for around a thousand dollars.
TWO MONTHS IS NOTHING WHEN IT COMES TO TESTING A TRADING STRATEGY.
My suggestion would be that you leave this ‘winner’ alone until at least the beginning of 2011. Then take a look at the results. And then search around the net, because there is some very ‘fine marketing’ being put into this creation.
Comparison Sites for Expert Advisers
These would be a great idea. Unfortunately most of them are really just dressed up shop fronts offering to sell you any EA you would like to purchase. Some of them seem impressed that they have tested an EA on a dummy account for a week and it has not blown up yet! An exception is ForexPeaceArmy.com, although you need to be aware that some of ‘their’ tests are just links to the producers information.
Create Your Own Balanced Autotrade Fund
There are a huge number of individuals who have set about trying to create profitable methods of trading, whether by fundamental or technical analysis, and in the latter case, using either manual or automated trading strategies. The majority of these attempts will have ended in losses.
However, at this website http://dynamic.autotradenow.com/ you can review past performance, and monitor future performance, of a large number of these products. At the very least out of interest I suggest you pay a visit.
One of the strengths of the site is that you can adjust parameters. For example, a strategy that depends on taking a large number of trades every day may apparently show a profit, but you can adjust the dealing charges to a realistic level and see what the outcome is. You can combine a portfolio of strategies and have them autotraded for you, or just subscribe to a signals service and place trades yourself. And you can monitor systems free without any commitment.
There are any number of ways to select systems. For what it is worth, I am taking a look at the following, though I have no cash involved at the moment :
ETF Timer
Barracuda
Remember to personalise the charts to include trading costs