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Trailing stop

A trailing stop is an order aimed to control stop orders or a number of pips by which a broker will move your stop loss order following a market trend. When you turn off your computer, a trailing stop order, unlike stop loss orders, is not executed anymore. When a trading platform is switched off, only a stop loss order set by the trailing stop can be active. A trailing stop order is frequently used on the forex market as well as on other exchanges and OTC financial markets. After placing a trailing stop order, for example, within the number of X points, we observe the following picture: 1. The MetaTrader platform does not do any action until an open position moves by X points. Now MetaTrader can set a stop loss order at a distance of X points from a current price. 2. Once a price is at a certain distance from a set stop order which is higher than the trailing stop value, MetaTrader sends an instruction to the server to change the level of this stop order that it will be at the trailing stop interval from a current price. Thus, a trailing stop order insures a trader against the situation when a price turns against them. The trailing stop monitors prices by moving a stop loss order along with their movement. If a price goes against a trader's position, the trailing stop will close it with a profit. However, remember that the trailing stop can be profitable only if you follow two basic rules: 1. A stop loss order is a maximum you are ready to lose in a single test of your strategy. 2. The stop loss should be placed only where you think there is the beginning of a steady counter-trend unprofitable for you. Read more: http://www.mt5.com/ms/articles/trailing_stop_system/

Organizing the trading process on Forex market

Both professional traders and novices who work on the financial market have to develop the most convenient and profitable for them trading system in order to be able to trade on Forex successfully. Working out the trading system one should select the most appropriate trading regime. There are various types of forex trading regimes but it does not mean that every trader can work with any conditions. Trader needs to choose the style which will save the time and fit the personality and financial capacity. The common mistake among traders is choosing a trading regime inappropriate for their personality. Many people regardless of their experience do not even think about such factor. One more reason of incorrect choice is lack of money and it probably plays the key role. Often traders have to choose the trading regime according to the minimum requirements for the initial deposit. Below we are considering different trading regimes. Intraday trading As a rule this trading style is used by newbies. Most of all, they are attracted by the market dynamics. There are some specifics of day trading: 1.Positions remain opened only within a trading day and must be closed by the end of the day or transferred to the next day with protective measures taken. 2.All deals have short-term character and are meant for taking only a small part of profit. 3.Great number of deals is accomplished during a trading day. 4.It does not require investment of big amount of money. 5.Working time on the market consists of M1 charts. There are pros and cons of intraday trading: Pros: Cons: Such regime fits traders with strong nerves, endurance and quick reaction. Week trading As a rule, adherents of this trading style are traders who are disappointed with the intraday trading. Week trading session does not show sharp oscillations which are obvious during day trading. Traders who just turn to the week trading may think that the market is dead. Specifications of week trading: Pros: Cons: Such trading style fits traders, who possess such qualities as thoughtfulness and deliberation as first time any trader needs to monitor positions 24 hours a day, analyzing all changes of the market behavior. Long-term trading Such trading regime fits patient traders because profit made from the deals which remained opened during several weeks will come to the pocket of a trader only after closing of the positions. Adherents of this style have more free time and suffer lower pressure. Peculiarities of this regime are: Advantages: Disadvantages: This type of trading will be convenient for traders who have enough funds to invest as well as patience and motivation. In case you are able to choose the strategy which fits your financial and emotional capabilities, you will achieve success trading on Forex very soon. •It requires small amount of money. •Trading can be stopped at any time. •Minimum risk. •Emotional pressure. •Much time needed for the rest and recovery. •Absence of free time during the trading session. 1.Position can long from 1 to ten days. 2.All deals are targeted on taking a great part of profit from the market movement. 3.A trading week may consist of one or two deals. 4.Money supply requirements for week trading is much higher than for day trading. 5.The working time consists of hours charts. •Low pressure on nerves. •High yield level. •Recovery does not take much time. •Trader has free time during the trading session. •It requires more funds than intraday trading style. •Trader can be outside the market during the trend correction. •There is no opportunity to stop trading at any moment. •Position must be opened 24 hours a day. 1.Trader analyzes day and week charts. 2.Position may remain opened during several months. 3.It requires much more funds that intraday or week trading styles. 4.Trader may be outside the market during the trend correction. •Much free time •Low emotional pressure. •No time needed for rest and recovery. •Absence of any actions. •No opportunity to stop trading at any moment. •Limited number of currency pairs convenient for long-term trading. Read more: http://www.mt5.com/ms/articles/organizing_the_trading_process/

Scalping and pipsing

Let us start with the definition of scalping and pipsing. These trading strategies are employed by forex traders for taking profit from intraday price oscillations occurring on the currency market. As a rule, deals remain opened during only several minutes. One position will not bring much profit but these strategies require a huge number of deals. A scalper or a pipser can execute about two hundred deals per day. However, no all deals are profitable. The result for a trader is positive summary of deals by the end of a trading day. The stop-loss level set as close to the opening price as possible enables a trader to achieve the positive result. Stop-loss is necessary for minimizing the risks in case a price moves in the opposite direction. It is well-known that Forex is the market with the highest liquidity. During the day a price is moving up or down in a certain period of time according to the cycle. If the price passes about 60 pips during the day the difference between high and low points will be much more. Chances of getting profit increase if to trade on the hourly price oscillations. It is the main reason why so many traders decided to employ such trading strategies as scalping or pipsing. Newbies may think that scalping or pipsing allows earning huge amount of money and the opportunity of reinvesting may turn it to the enormous sums. However, it is not that simple. There are several disadvantages of such trading methods. They are: • Setting the stop-loss level close to the opening price increases the risk of losses even during the insignificant price oscillations. Even if you succeeded to predict further direction of the price movement the possibility of losses are still very high if you incorrectly evaluate the back bullish or bearish force on the market. It is much easier to make a mistake determining the price movement direction for a short period of time (one-two hours) than for the whole day. • The decision can be the absence of order but in this case a trader has a risk to lose even more money after the unfavorable price movement when it goes so far that the pullback is impossible in the nearest future. • Emotional excitement and nervousness possessed by most traders who work with real money. As a rule all traders start on demo account because it allows testing the strategy with the virtual money. Consequently, trading on real account causes anxiety which is strengthening with every pip in case the market moves in the unfavorable direction. In general, scalping and pipsing are for experienced traders. Short-term trading as scalping or pipsing implies interruptive work in front of the screen which increases the risk of stress and leads to the inconsiderate acts. There is also one more evident disadvantage for traders – brokers do not like those who accomplish the great number of deals daily. Traders who open deals almost every second are asked to close their accounts or imposed the limits. Read more: http://www.mt5.com/ms/articles/scalping_and_pipsing/

Trading Signals service in MetaTrader 4 and MetaTrader 5

MetaTrader 4 and MetaTrader 5 platforms apart from their principal function of sending orders to a broker have a multitude of other features. In particular, the platforms support Trading Signals service which promotes trades’ copying in real time. Trading signals, as a rule, represent an updated information about currency operations. Any trader with the help of his trading platform can broadcast information about his trading results in public monitoring list and on the official website of the platform developer (http://www.mql5.com/en/signals/mt4). Everyone out of the hundreds of other traders worldwide can subscribe to any deal he considers successful. Trading Signals service enables traders to subscribe to any signals and automatically copy them to their accounts online. Meanwhile, you will have to pay a commission to Forex Signal Providers for their services. However, it concerns only those signals that are rendered on a fee paid basis. Every provider can determine the commission amount individually and specify it in the signals information. Internal payment system of http://www.mql5.com website automatically withdraws the required commission from the trader’s account, complied with the terms of subscription, and credits it to the provider’s account. To use Trading Signals system: download MetaTrader 4 or MetaTrader 5 to your computer or get an updated version of the platform; register with developer’s official website as a provider or subscriber; choose Community in Options section and specify your account data; open Signals in Tools section. Read more: http://www.mt5.com/ms/articles/trading_signals_service_in_metatrader/

Fractal analysis

Fractal analysis is the last word in currency and stock markets analysis. The founder of fractal analysis is Benoit Mandelbrot. Edgar Peters also made contribution to the development of fractal theory of the market. Fractal analysis implies that future prices are based on their past changes. It facilitates the forecasting of prices’ falls or rises, although this type of analysis is hard to understand per se. According to fractal analysis, today’s price has no relation with its all past readings. No long-term or short-term chart can give us an accurate prediction of a price dynamic at this or that moment of the time. Thus, it turns out that the market is almost impossible to predict. The data received with the help of fractal analysis is based on the wavy lines, which is quite reasonable since there is no specific market scenarios and falls and rises in quotes are inevitable. What is worth attention? First of all, pay attention to the factors that form the price at a specific period of time. In case the observations made in political, economic and social spheres match, it is possible to say that the price will repeat its move made some time ago. However, the fractal analysis requires sound analytical confirmation with an access to the latest reliable information on economic and market conditions. As a result, despite the time and money spent, your benefit is big as you are always one step ahead of the traders who are waiting for the real market move. How to use fractal analysis? First, you need to learn how to create small models based on a particular currency, commodity or stock. After that, you need to simulate a real market situation and find out whether the expectations were met. Otherwise, you need to decipher and analyze the moments that have not been considered. Once you are able to predict the future price moves, it can be safely assumed that forecasting dynamic is positive. Thus, you could have earned if you had taken this decision in live trading. Hence, you can start using this strategy on live account. Read more: http://www.mt5.com/ms/articles/fractal_analysis/

Trading strategies

To make money on the currency market, a beginner trader should learn to analyze the forex market and work out their own strategies on the basis of this analysis. Trading on Forex suggests that market participants should follow certain rules of the market. Among these rules is a trading strategy which turns an ordinary play into activity that brings money. Traders can develop their own strategies being the most suitable for them. Some market participants use only technical analysis, others prefer to go by fundamental factors. There are those who combine both types of analysis determining entry and exit points. There is a whole myriad of analytical tools helping traders understand all fluctuations and make complete market analysis. To become skillful and understand the tools, beginner traders are recommended to examine every analytical tool. Support and resistance levels are considered to be the basis of most trading strategies. Traders use these levels to determine a moment to enter or exit the market. Support is the lowest level touching which a price is likely to switch to an upward movement. The resistance level indicates the highest price at which traders prefer to close positions to avoid the risk of a significant decline. At support and resistance levels, trends are tested and confirmed. Breaches of these levels point to a stable price movement. Support and resistance levels can be determined through analysis of price charts of previous unbroken support and resistance levels for any period of time. The moving average is another instrument of trading strategy development. The simple moving average shows a price within a certain period of time. This tool is used to eliminate the short-term price fluctuations. It allows traders to see the overall market situation. Also, the moving average is used to indicate future price movements, whether ascendant or descendant. If price is above the moving average, the market is bullish and it’s time to buy an asset. The market is bearish if price is below the moving average; it’s time for selling. Traders can make a deep analysis of the forex market using several trading tools. When indicators signal the beginning of a market movement, it is the time to start trading relying on one indicator. The main principles of the fundamental analysis are the same. Developing a trading strategy, traders should remember that any strategy includes clear principles and rules of entering and exiting the market as well as a good analysis of the market movement in the nearest future. Read more: http://www.mt5.com/ms/articles/forex_market_trading_strategies/