Contracts for Difference a.k.a. CFDs are derivatives trading instruments between two parties. There are thousands of global markets which can be traded in a CFD format. With CFD trading, you’re essentially speculating on the price movements of financial instruments. These could be bonds, FX pairs, commodities, indices, or stocks. It doesn’t matter whether the asset prices are rising or falling – all that matters is that you call it correctly. With CFDs, you’re not taking ownership of the underlying asset – you’re simply speculating on price movements. Even so, understanding your risk vs. rewa ..read more

So, you believe you have found a sound forex trading system or Expert Advisor (EA) and you are feeling ready to dip your toe in the water. It’s important not to rush in and instead take a step back to thoroughly test the strategy or EA through back testing. Before we look at how to test if an Expert Advisor is profitable, first let’s look at what forex back testing actually is? Forex back testing allows you to test the EA in order to see whether it actually does what it should do. Any forex trading system is completely useless if it doesn’t do what you expected it to do. Back testing uses his ..read more

Maybe it’s the desire to keep getting better or simply jumpiness, but traders are always looking for that new magic bullet strategy. Whether you deal in forex or cryptocurrencies, trying new approaches is always on the to-do list. But it isn’t always possible to test a new trading strategy without typically losing substantial sums of hard-earned money. This is exactly what prediction platforms want to change. Decentralized, blockchain based platforms give individuals fun ways to research and apply their insights to their predictions, test new strategies, and take part in fantasy trading compe ..read more

The last version of MetaTrader required offline charts for anyone that wanted to create a synthetic currency pair or instrument. Since MetaTrader 5 still does not allow for offline charts, the ability to create synthetic time frames isn't possible using the charting time series. The new build 1640 for MT5 introduces the ability to create synthetic instruments. I, for example, want to watch VIX Calendar Spreads. Instead of just using my indicator, I also would like to see a chart that helps me track the calendar spread. A synthetic instrument chart displaying VIX Calendar Spreads How To Crea ..read more

SKEW should lead VIX, right? Traders get worried about a crash, which might anticipate volatility in the S&P 500. SKEW is in green. VIX is in blue. If SKEW was a perfect predictor of VIX, then you'd expect the blue line to look like the green line with a small gap in between them. The theory was that SKEW (in green) would pull up VI (in blue).   A quick scan of the chart shows that's not the case. There are occasions where green spikes up followed by blue, but it intuitively feels to me like a case of cherry picking. Also, notice the largest blue spike around value 500. If SKEW lag ..read more

Cryptomania provided me with the largest percentage gains in my trading career. Back in June 2015, I decided to spend $1,000 on a punt. I said, "Bitcoin is either going to $0 or $10,000." That was back when bitcoin traded at $283, which bought 3.619 bitcoins. At $10,000, that woulda coulda shoulda meant $36,200 dollars in my pocket.  Here's my offline (and now defunct) wallet so that you can see the activity: o/address/1LzhWxzdCoPtfVRTu9dxMTRKZoe8oQiEmn Notice that the first transaction date was in January 2017. I originally purchased those coins through an exchange called Coinsetter. Th ..read more

As a relative newcomer to the trading scene, your eagerness to get started may overwhelm your better judgment. There are several questions you need to ask yourself before you start trading, including the following: Which trading platform are you going to be using? Which financial assets are you going to be trading? What affects the market prices of your chosen assets? What trading budget are you going to be working with? What resources can assist in your trading activity? Of course, there are many other questions that you will need to consider when you begin trading. The trading platform of ..read more

December and January were extremely unkind to me. I took a huge loss on December 9 that coincided with the Fed meeting and another big punch in January. In total, I went from a 28% profit to a ~4% net loss. Deservedly, my inbox quickly flooded with comments and suggestions on the drawdown. The most common of those was to stop trading during news events. So... why am I still trading during news events? There are a few answers to that question. Curve fitting It's not like the strategy loses money on every single news event. It's 100% true that news events like the Fed meeting can and badly hurt ..read more

I was really excited about my Pilum strategy two months ago. The research looked great and everything was ready to rock and roll. Demo testing began and then... not much happened. The Quantilator is (mostly) finished, which finally gave me time to circle back and review what happened with Pilum. Live demo trading of Pilum. Dec 9, 2016 to Feb 7, 2017 The expected outcome was that I would win 75% of the time. Trades were infrequent, so I thought maybe I'm just having bad luck. But then my win rate remained stuck around 50%. Simple statistical tests told me this was unlikely to be bad luck. I ..read more

The double top pattern is no doubt among the simplest and most familiar price patterns in technical analysis. Typically, a double top pattern is followed by a sell off. In theory, this rather simple pattern should be easy for traders to pounce on and yet, too often, it’s a cause for frustration. That’s because the realization that a pattern has formed comes too late and, as a result, there’s little room for profit. But before you become discouraged there is an effective strategy – a tactic, if you will – that will allow a trader to recognize a double top and, at least most of the time, ride o ..read more