Basic forex strategies

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sft_simple_strategy.pdf

• What is it based on ?

Old School Simple Technical Analysis based on EMA (Exponential Moving Average) with use of Stochastic oscillator and RSI(Relative Strange index) as an Entry and alternative Exit signal . And dynamic Stop Loss and Profit Target based on percentage of ADR (Average Daily Range) .

• Why do i trade simple strategy ?

Complex strategies can easily draw in traders since it is somewhat logical that the more information we factor into a system, the more reliable it will be. Yet, the market does not always reward logic and when it does , it may not do it in the trader's timeframe. Remember, the market can be wrong a lot longer than the trader can afford to be right !!

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trade_forex_with_support_and_resistance_strategies.pdf

This course is intended to show how simple concepts of support and resistance can potentially generate successful trades. You probably already know about support and resistance as it is a fairly common idea in Forex trading. In this course you will gain a unique insight into how to use support and resistance in a creative way to potentially improve your trading. Along with these several basic concepts and theories, you will also be introduced to some of our proprietary trading strategies.

If Forex trading is new to you, you can use the Best Metatrader Broker free Forex education section to get up to speed. This section contains a plethora of great free informtinon that would most likely cost a lot of money from many other sources.

To learn how to use the Metatrader trading platform, you can view our comprehensive Metatrader Platform Tutorial.

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fx_strategies_in_periods_of_distress.pdf

This article presents an overview of widely practised short-term multicurrency investment strategies such as carry trade, momentum and term spread strategies. We provide evidence on their downside risk properties and illustrate their performance over historical episodes of financial market turmoil. We show that the strategies exhibit substantial tail risks and that they do not perform uniformly during distress periods in global markets. Interestingly, equity market investments feature even greater downside risk.

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an_empirical_study_of_forex_risk_management_strategies.pdf

There are a variety of strategies which are designed to manage foreign exchange risk. Each of them, however, is constructed under specific assumptions, for a specific risk profile. It is often the case that several strategies are applicable to a given scenario. The question arises as to which strategy would be expected to yield the best results in a given scenario. The current study addresses this issue empirically, using a set of simulated foreign exchange cash flows to compare the profits resulting from the use of different foreign exchange risk management strategies. The risk management strategies considered for the study are: forward currency contacts, currency options, and cross-currency hedges. The study analyzes and evaluates these foreign exchange risk management strategies to find out which of the strategies is appropriate in particular situations.

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rolling_spot_forex_trading__financial_problem_or_ponzi.pdf

Rolling spot forex is a growing business. The key problem is whether it could be classified as a financial instrument or could be classified as gambling contract. Each legal system has different approach. Nevertheless the legal position of rolling spot forex is unclear. This submission is divided in three parts. First part gives the explanation of forex trading. It shows what is understood under this term. Second part deals with the types of forex trading. This part gives also a brief explanation of each type of forex trading ant main type characteristics. Third part is main part. It deals with the problem of internet forex trading (which is spread around the world) .This part analyzes types of trading platforms. It shows who could be the counterparty in retail forex trade. It tries to find out what rolling spot forex trading means. Key question is, if rolling spot forex contracts fall under MiFID system. And finally deals with the problem of (il)legality of such trading.

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less_of_a_puzzle_-_a_new_look_at_the_forward_forex_market.pdf

The two-country monetary model is extended to include a consumption externality with habit persistence. The model is simulated using the artificial economy methodology. The 'puzzles' in the forward market are re-examined. The model is able to account for: (a) the low volatility of the forward discount (b) the higher volatility of expected forward speculative profit (c) the even higher volatility of the spot return (d) the persistence in the forward discount (e) the martingale behavior of spot exchange rates (f) the negative covariance between the expected spot return and expected forward speculative profit. It is unable to account for the forward market bias because the volatility of the expected spot return is too large relative to the volatility of the expected forward speculative profit.

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fast_and_slow_informed_trading.pdf

This paper develops a model in which traders receive a stream of private signals, and differ in their information processing speed. In equilibrium, the fast traders (FTs) quickly reveal a large fraction of their information, and generate most of the volume, volatility and profits in the market. If a FT is averse to holding inventory, his optimal strategy changes considerably as his aversion crosses a threshold. He no longer takes long-term bets on the asset value, gets most of his profits in cash, and generates a "hot potato" effect: after trading on information, the FT quickly unloads part of his inventory to slower traders. The results match evidence about high frequency traders. Number of Pages in PDF File: 58

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the_halloween_indicator_sell_in_may_and_go_away_-_another_puzzle.pdf

We document the existence of a strong seasonal effect in stock returns based on the popular market saying 'Sell in May and go away', also known as the 'Halloween indicator'. According to these words of market wisdom, stock market returns should be higher in the November-April period than those in the May-October period. Surprisingly, we find this inherited wisdom to be true in 36 of the 37 developed and emerging markets studied in our sample. The 'Sell in May' effect tends to be particularly strong in European countries and is robust over time. Sample evidence, for instance, shows that in the UK the effect has been noticeable since 1694. While we have examined a number of possible explanations, none of these appears to convincingly explain the puzzle. Number of Pages in PDF File: 34

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indicators_dz_and_rdz_-_essence_methods_of_calculation_signals_and_rules_of_trading.pdf

Speculators exert more and more influence on prices on world exchange markets. Often the result of this is a formation of so-called “bubbles” with subsequent shocks to national and global economy. The purpose of speculators is earnings in a relatively short period of time using the differences in prices for exchange assets. Most of the speculators as a reference point for decision-making use technical analysis methods (prediction of future prices based on previous prices).

Using more sophisticated methods gives advantage and opportunity to earn on a relatively short-term fluctuations in the exchange markets.

General rules of technical analysis applied to all types of exchange markets – foreign exchange and stock markets, commodity markets and markets for derivative financial instruments. Thus, developing of a new technical indicator or trading strategy for FOREX (foreign exchange market) can be applied to analyze prices of gold or oil, stock indices and stock prices.

Number of Pages in PDF File: 8

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FX Market Behavior and Valuation.pdf

Lecture notes for a short course on FX option valuation. Includes:

- Mathematical framework for FX valuation

- Handling the smile and term structure for vanilla options (calls and puts):

--- Interpolation issues and techniques

--- Handling business time

--- Handling market conventions

- Pricing of barrier options:

--- Attention to the joints along with the marginals

--- Barrier option pricing models

------ Black-Scholes

------ Vanna-volga

------ Semi-static hedging

------ Stochastic volatility - the Heston model

------ Local volatility

------ Stochastic local volatility

------ Random risk reversal model

- Hedging performance as a measure of model quality.

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intraday_return_predictability_informed_limit_orders_and_algorithmic_trading.pdf

I study the strategic choice of informed traders for market vs. limit orders by analyzing the informational content of the limit order book. In particular, I examine intraday return predictability from market and limit orders for all NYSE stocks over 2002-2010, distinguishing between two sources of predictability: inventory management and information. In contrast to the traditional view in the literature, I find that informed limit (not market) orders are the dominant source of intraday return predictability. The findings further indicate that the advent of algorithmic trading is associated with more informed trading, especially through market orders. Overall, my evidence emphasizes the role of limit orders in informed trading, which has implications for theory, investors, and widely used measures of informed trading.