Something Interesting in Financial Video - page 19
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Forex Trading and Leverage
For a very small GBP100 deposit traders can effectively trade GBP13,000 positions; as such a cent movement in a currency with such leverage could make moves that much bigger. The more leverage you employ to a product, the more the normal volatility of a market is going to be exaggerated.
Learn how to sort through the chaos and confusion on the web to learn what forex brokers are best for individual currency traders.
What forex traders need to consider regarding the regulatory environment of the forex broker they trade with.
Choosing a Forex Broker, Part III: Transaction Costs
A look at the transaction costs involved in forex trading (the bid ask spread, commissions, and how trades are executed) so that FX traders can properly understand how much their currency broker is charging them.
Choosing a Forex Broker, Part IV: Technology and Add-ons
A look at the technical and value-added features (like news, charts, ability to trade from the web, etc) that currency traders should consider when choosing what forex broker they select.Forex Broker Types - MM,NDD,STP,ECN
This is small 10 minute education video about the following: the difference between Forex Broker Types - MM,NDD,STP,ECN
Forum on trading, automated trading systems and testing trading strategies
How to Start with Metatrader 5
Sergey Golubev, 2022.05.24 07:04
10 video lessons about how to create EA for Metatrader 5
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Video: Simple automated trading – How to create a simple Expert Advisor with MQL5
A so-called Expert Advisor is what we are looking at right now. An Expert Advisor is an automated application that can operate within MetaTrader and can open and close positions on its own.
In this video, we will learn how to create an Expert Advisor in its most basic form.
The Stochastic Oscillator Explained
This video is all about the Stochastic Oscillator. We explain what the indicator is, what it's used for and how it's calculated. We also run through a number of possible ways to interpret this technical indicator and finish by explaining the difference between the Fast Stochastic Oscillator and the Slow Stochastic Oscillator.
The download for MetaTrader 5 and MQL5 is totally free. And in this little video series we will get you started with automated trading. Let's see what MQL5 and MetaTrader5 can do for you and how to get started now.
Trading The Martingale and Anti Martingale Strategies
In today's lesson we are going to look at the two categories that most position sizing strategies fall into which are known as martingale strategies and anti martingale strategies.
A position sizing strategy which incorporates the martingale technique is basically any strategy which increases the trade size as a trade moves against the trader or after a losing trade. On the flip side a position sizing strategy which incorporates the anti martingale technique is basically any strategy which increases the trade size as the trade moves in the traders favor or after a winning trade.
The most basic martingale strategy is one in which the trader trades a set position size at the beginning of his trading strategy and then double's the size of his trades after each unprofitable trade, returning back to the original position size only after a profitable trade. Using this strategy no matter how large the string of losing trades a trader faces, on the next winning trade they will make up all their losses plus a profit equal to the profit on their original trade size.
As an example lets say that a trader is using a strategy on the full size EUR/USD Forex contract that takes profits and losses both at the 200 point level (I like using the EUR/USD Forex contract because it has a fixed point value of $1 per contract for mini forex contracts and $10 per contract for full sized contracts but the example is the same for any instrument)
The trader starts with $100,000 in his account and decides that his starting position size will be 3 contracts (300,000) and that he will use the basic martingale strategy to place his trades. Using the below 10 trades here is how it would work.
As you can see from the example although the trader was down significantly going into the 10th trade, as the 10th trade was profitable he made up all the his losses plus a brought the account profitable by the equity high of the account plus original profit target of $6000.
At first glance the above method can seem very sound and people often point to their perception that the chances of having a winning trade increase after a string of loosing trades. Mathematically however the large majority of strategies work like flipping a coin, in that the chances of having a profitable trade on the next trade is completely independent of how many profitable or unprofitable trades one has leading up to that trade. As when flipping a coin no matter how many times you flip heads the chances of flipping tails on the next flip of the coin are still 50/50.
The second problem with this method is that it requires an unlimited amount of money to ensure success. Looking at our trade example again but replacing the last trade with another loosing trade instead of a winner, you can see that the trader is now in a position where, at the normal $1000 per contract margin level required, he does not have enough money in his account to put up the necessary margin which is required to initiate the next 48 contract position
So while the pure martingale strategy and variations of it can produce successful results for extended periods of time, as I hope the above shows, odds are that it will eventually end up in blowing ones account completely.
With this in mind the large majority of successful traders that I have seen follow anti martingale strategies which increase size when trades are profitable, never when unprofitable.