Testing and Trading Forex Strategies https://forexsb.com/wiki/ 2026-05-23T20:11:50+00:00 https://forexsb.com/wiki/ https://forexsb.com/wiki/_media/wiki/dokuwiki.svg text/html 2014-09-04T08:13:27+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/2b-strategy?rev=1409818407&do=diff False break – 2B strategy The 2B strategy (a.k.a. false break or turtle soup) is very suitable for trading in a range or trend. Rules for entry: Long position: - Wait for a break below support level - Buy after the price returns back above the broken support text/html 2014-07-04T08:01:24+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/adx?rev=1404460884&do=diff Average Directional Index (ADX) ADX was developed by J. Welles Wilder as an indicator of the strength of the trend. It is plotted along with two other indicators Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI) which define the trend direction. The calculation of the components of the ADX is as follows: text/html 2014-07-24T11:01:41+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/al-brooks-bull-bear-flags?rev=1406199701&do=diff Al Brooks: Double bottom bull flags and Double top bear flags Al Brooks describes two patterns that I use very often in my strategy for trading. Double bottom bull flag is pause or flag during the development of the bull trend, in which there are two spikes down to almost the same level, and then the bull trend resumes. text/html 2014-07-25T06:23:27+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/al-brooks-failure-failed-failure?rev=1406269407&do=diff Al Brooks: Failure and Failed Failure These two trading set ups are one of the best. Their biggest advantage is that there are always trapped traders that must cover their positions or chase the market. This way they accelerate the price move and give you a quick and nice profit. The text/html 2014-07-29T08:09:22+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/al-brooks-final-flag?rev=1406621362&do=diff Al Brooks: Final Flag The Final Flag begins as a continuation pattern, but ends up as trend reversal pattern. According to Al Brooks, the components of a Final Flag are: * Trend * Pullback that is usually mostly horizontal. It can be as brief as a single bar text/html 2014-07-22T08:42:23+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/al-brooks-high-low?rev=1406018543&do=diff Al Brooks High/Low 1, 2, 3, 4 Al Brooks is trading E-mini S&P500 futures on 5-minute Chart. The only indicator on his chart is a 20-period EMA. His trading style is based on simple price action principles. The basic set ups he uses are the High 1-4 and Low 1-4. text/html 2014-07-28T07:52:46+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/al-brooks-trend-reversal?rev=1406533966&do=diff Al Brooks: Major Trend Reversal Price action trading is based on simple and logical principals. You just have to identify the new trend and enter in its direction. Best risk/reward ration could be achieved if we open position in the early stages of the trend. That is why trend reversals are very important and we must have clear rules to define them. According to text/html 2014-07-07T07:48:47+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/atr?rev=1404719327&do=diff Average True Range (ATR) Average True Range (ATR) is an indicator that measures volatility and it was designed by J. Welles Wilder. This indicator was developed for the commodities market because they often open with a gap in prices. If we use the regular hi-low range, we will not take into account these gap openings. Wilder created Average True Range to capture exactly this “missing” volatility. text/html 2014-07-15T08:09:24+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/bear-put-spread?rev=1405411764&do=diff Bear Put Spread The Bear Put Spread is a simple option strategy and is structured by a long put option and a short put option with lower strike and same expiry. The risk of the buyer of the Bear Put Spread is limited to the difference between the two option premiums. The potential for profit is limited to the difference between the strike prices less the premium paid and transaction costs. The maximum profit could be received only at the expiry. text/html 2014-07-16T08:11:54+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/binary-options-trade?rev=1405498314&do=diff Binary options trade A lot of people treat the binary options as a type of gambling. They could be right to some extent, but I think this is based on ignorance or lack of sufficient knowledge. Actually, our life could be gambling if we don't think and don't comply with some simple rules. If you spend some time in learning how the markets operate and what exactly are the options (plain vanilla and binary) and how they work, you may add a very powerful tool to your trading arsenal. text/html 2014-07-23T12:49:53+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/binary-ste?rev=1406119793&do=diff Forex Trading in Low Volatility You have probably noticed that the volatility of the most popular FX pairs is very low for weeks. For example, the 20-period ATR for EUR/USD is 55 pips, while for GBP/USD it is 62 pips. More experienced traders remember that this numbers were usually well above 100 a few years ago. When the volatility is low, the price moves are shorter and slower and it is much more difficult to make money. Fortunately, today the FX brokers are presenting much more opportunities… text/html 2014-06-20T07:48:26+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/bollinger-bands?rev=1403250506&do=diff Bollinger Bands® Bollinger Bands® are a technical indicator designed by John Bollinger. Bollinger Bands® are a volatility indicator and consist of three lines: * N-period moving average (20-period is the standard setting) * upper and lower bands at K (2 is the standard setting) times an N-period standard deviation above and below the moving average text/html 2014-07-15T08:08:53+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/bull-call-spread?rev=1405411733&do=diff Bull Call Spread The Bull Call Spread is a simple option strategy and is structured by a long call option and a short call option with higher strike and same expiry. The risk of the buyer of the Bull Call Spread is limited to the difference between the two option premiums. The potential for profit is limited to the difference between the strike prices less the premium paid and transaction costs. The maximum profit could be received only at the expiry. text/html 2014-07-01T07:46:17+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/bulls-bears-power?rev=1404200777&do=diff Bulls/Bears Power This indicator is developed by Dr. Alexander Elder and is called also the Elder-Rays. The primary principles on which Elder based the oscillator are the following: * The highest price displays the maximum buyer’s power within the day. text/html 2014-08-11T08:21:00+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/butterfly?rev=1407745260&do=diff Butterfly The butterfly (or butterfly spread) is a neutral options strategy that is a combination of a bull spread and a bear spread. It is structured by three options with different strikes. When you expect the underlying to trade in range you should use the long butterfly, which is constructed by buying one in the money call with lower strike, selling two at the money calls and buying another out of the money call with higher strike. Maximum profit and loss are limited. This strategy also ha… text/html 2014-08-26T06:34:10+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/calendar-spread?rev=1409034850&do=diff Calendar spread Calendar spread is an option strategy that uses the different speed of time decay of the options that have different expiries. Time decay accelerates one month before the expiry, all else being equal. This effect is used in the calendar spreads. Calendar spread is established by selling a call (put) option with a closer expiry and buying a call (put) option with a later expiry and the same strike. For example, sell a call option with strike 1.3300 and expiry after 1 month and bu… text/html 2014-09-10T05:40:19+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/camelback-technique?rev=1410327619&do=diff Camelback Technique I read about the Camelback technique in Joe Ross’ trading manual. This strategy uses a moving average channel and an exponential moving average to define the trend. Set ups are pretty simple and straightforward. Long Set Up * text/html 2014-06-12T09:49:53+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/cci?rev=1402566593&do=diff Commodity Channel Index - CCI The commodity channel index (CCI) is an oscillator developed by Donald Lambert and is used for analysis only of the commodities markets, but also equities and currencies. This indicator measures the variation of the price from a moving average. The CCI is calculated as the difference between the typical price (average of the high, low and close of the period) and its simple moving average, divided by the mean deviation of the typical price. The index is usually sca… text/html 2014-08-26T06:44:55+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/chart-patterns?rev=1409035495&do=diff The Chart Patterns Basics When the current price trend is losing momentum, the market usually makes a pullback or enters a period of consolidation. In such market phases are forming swing highs and lows, which could be used for drawing several lines of support or resistance. Combining these lines, we can clearly distinguished chart patterns. They are divided into two main types – continuation and reversal patterns. The chart patterns are pretty simple and easy to use in my opinion. text/html 2014-08-19T07:26:06+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/collar?rev=1408433166&do=diff Collar (Risk Reversal) This option structure is established by the simultaneous purchase of a put or a call option and sale of the other type option with the same expiries. If you buy an OTM call and sell an OTM put, you will have the so called risk reversal text/html 2014-08-21T11:41:00+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/condor?rev=1408621260&do=diff Condor Condor is an option strategy that can be applied for trading of the volatility of the underlying asset. This strategy could be implemented with four options with different strikes but the same expiry. If we want to make money when the market is in a range, we can structure text/html 2014-06-09T11:06:52+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/cot-report?rev=1402312012&do=diff Commitment of Traders report (COT) The forex market is decentralized and we can't obtain reliable information about the positions of the traders. How can we find out what the large market participants intend to do? Very practical way to do this is to analyze the the Commitments of Traders (COT) report. It was first published by the U.S. Commodity Futures Trading Commission (CFTC) in 1962, and covered 13 agricultural contracts. Its purpose was to provide information about the current situation … text/html 2014-05-30T03:21:25+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/dont-gamble-just-trade?rev=1401420085&do=diff Don't gamble, just trade In this article, I will share my humble opinion whether trading is like gambling. Actually, trading, like anything else in life, is what you make it. When you buy and sell just because you feel that the price is too low or too high, that's rather gambling. If you want to trade, you have to open a position only if there is high probability that the price will rise all fall. However, your trading doesn't end with the position opening (actually this is the mistake most of … text/html 2014-09-04T07:57:38+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/double-bottom?rev=1409817458&do=diff Chart patterns - Double Bottom The Double Bottom pattern is an mirror image of the Double Top. In this case the original trend is down. The prices reach a new low and then follows a corrective rally. The market is taking a breath, and bears gather forces to reach new low and resume the trend. Then a new leg in the direction of the trend starts and the pair reaches a new low, which usually is equal to the previous one. Sometimes the two bottoms do not match perfectly, but a small difference is n… text/html 2014-07-09T10:21:48+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/double-strangle?rev=1404901308&do=diff Double strangle The strangle is a simple options structure which is used in the volatility trading. When we expect higher volatility we can by an out-of-the-money call with strike above the current market price and an out-of-the-money put with strike below the current market price. This is a long strangle. When you expect lower volatility, you sell a strangle and hope that the options will expire out-of-the-money and you will keep the collected premiums. text/html 2014-09-02T07:41:06+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/double-top?rev=1409643666&do=diff Chart patterns - Double Top The double top is one of the most common chart patterns. The reason for this is that its formation is based on basic principles of the price action. What actually happens you can see on the chart below. The currency pair is in a strong uptrend. The prices reach a new high and then follows a pullback. The market is taking a breath, and bulls gather forces to reach new highs. Then a new leg in the direction of the trend starts and the pair reaches a new high. Sometime… text/html 2014-06-22T05:14:24+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/exotic-options?rev=1403414064&do=diff Exotic options In recent years substantially increased the popularity of the so-called exotic options. Unfortunately, most of them are available primarily to institutional investors and large companies. Most popular types of exotic options are the following: text/html 2014-06-12T06:17:03+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/factors-determining-option-prices?rev=1402553823&do=diff Factors Determining the Options Prices The market price of an option reflects the degree of probability the option to be “in the money” at the expiry. If you understand this simple sentence, you will discover a brand new world of trading. You can trade all kinds of underlyings under all the market conditions. You will not care whether the trend is up or down,or whether there is a trend at all. You can buy and sell volatility and take advantage of the time decay which is much easier than tradi… text/html 2014-06-16T07:40:43+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/fibonacci-retracements?rev=1402904443&do=diff Fibonacci Retracements Fibonacci retracements are horizontal lines that indicate possible support or resistance areas at the key Fibonacci levels. These levels are created by dividing the vertical distance between a swing high and a swing low by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%. These ratios are based on the number sequence identified by the Italian mathematician Leonardo Fibonacci centuries ago. The Fibonacci sequence of numbers is as follows: 0, 1, 1, 2, 3, 5, 8, … text/html 2014-08-29T08:38:44+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/flag?rev=1409301524&do=diff Chart patterns - Flag Flags are usually continuation patterns. They represent brief pauses in a trending market and are typically seen after a leg in the direction of the trend. Market participants take some profits and the price is moving in a range forming the chart patter. The price action is contained within two parallel lines that point in the direction opposite to the trend. That is why is said that the text/html 2014-09-05T09:07:29+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/follow-the-big-money?rev=1409908049&do=diff Follow the Big Money Actually my trading motto “Follow the big money” is the current interpretation of the old rule “Trend is your friend”. It is pretty simple - you have to be with the best if you want to survive and win. This is valid for almost every activity in our lives and in the nature. Years ago the markets were pretty simple. Information was spreading much slower and only the ones who can pay knew before the others all the news and could see the quotes. These were the perfect conditi… text/html 2014-06-02T08:05:13+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/forex-market-orders?rev=1401696313&do=diff The Forex Market Orders There is an interesting study by a team of the Bank for International Settlements (BIS) from March 2013 the title of which is “Information Flows in Dark Markets: Dissecting Customer Currency Trades” (BIS Working Papers No 405, Lukas Menkho, Lucio Sarnoz, Maik Schmeling, Andreas Schrimp). The authors found that text/html 2014-05-30T03:20:38+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/forex-market-transactions?rev=1401420038&do=diff Forex Market Transactions The main types of FX market transactions are spot, forwards, swaps and options. In the table below you can see the results of the Bank for International Settlements triennial study. [Forex transactions distributions.] Spot transactions in the forex market are a direct exchange of one currency against another and the quotes you see on your platform are valid for this type of transactions. Spot value date is 2 business days and each party to the transaction must provid… text/html 2014-06-30T07:51:24+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/gamma-scalping?rev=1404114684&do=diff Gamma scalping Options gamma reflects the relationship between the delta of the option and the current market price of the underlying asset and is positive for long positions and negative for short. The idea of the delta neutral strategies is to profit from volatility and time, as they are much more easily traded than the direction of the price move. To achieve this, traders must keep the delta of the position close to neutrality. You can buy or sell the underlying asset or options to manage th… text/html 2014-06-22T05:20:05+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/how-to-trade-in-december?rev=1403414405&do=diff How to trade in December? Volatility of the EUR/USD shows clear seasonal patterns. Usually it is very low during the summer and at the end of the year. In December, coming holidays are not the only reason for this. Most of the bank dealers and fund traders just don't care about the markets in the last month of the year. Their bonuses are calculated as of the end of November and whether they profit or lose in December they won't make more money for themselves. If there is no any major fundamenta… text/html 2014-08-03T13:30:44+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/how-to-use-binary-options?rev=1407072644&do=diff How to use the binary options? Many traders think that the binary options are gambling rather trading. They are right to some extent, because there are a lot of binary options brokers that are not regulated. Anyway, this is not a good reason to avoid this type of options. Their greatest advantage that they provide you a leverage with regards to the size of the price move. This means that even the price moves are much smaller than usual you can trade your set ups with much better risk/reward rat… text/html 2014-07-11T08:22:36+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/ichimoku-clouds?rev=1405066956&do=diff Ichimoku Clouds The Ichimoku Cloud is a technical indicator that identifies the trend and its direction, defines support and resistance levels, measures the price momentum and could be used as a trading system. In Japanese it is called Ichimoku Kinko Hyo and means “one look equilibrium chart”. This indicator consists of the following five lines: text/html 2014-06-03T07:14:30+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/interbank-money-market?rev=1401779670&do=diff The Interbank Money Market Broadly speaking, at the money market banks exchange short-term loans and deposits. The reasons for this are different, but they are usually associated with the management of required reserves at the central bank, investing of borrowed funds, obtaining funding to cover any liabilities, etc. Usually banks that have excess funds provide unsecured loans to those who need additional liquidity. Banks have agreed limits to each other and within these limits they exchange th… text/html 2014-07-03T07:59:04+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/keltner-channel?rev=1404374344&do=diff Keltner Channel Keltner Channel is volatility-based price envelopes placed above and below an exponential moving average and is similar to the Bollinger Bands. The channel lines are set two Average True Ranges (ATR) above and below the 20-period EMA (for the Bollinger Bands is used the standard deviation). This is a trend following indicator and could be used to identify reversals as well as overbought and oversold conditions when the the market is in consolidation. Close above the upper line a… text/html 2014-07-02T08:14:32+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/long-call-option?rev=1404288872&do=diff Long call option The buyer of a call option has the right, but not the obligation to buy the underlying asset at a specified price (strike price) at or before a specified date (expiry of the option). The risk of the buyer of the call option is limited to the amount of the premium paid, plus transaction costs. The potential for profit is unlimited after the price of the underlying asset rises above the strike price. The value of the call option rises when the price of the underlying asset and th… text/html 2014-07-03T07:07:38+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/long-put-option?rev=1404371258&do=diff Long put option The buyer of a put option has the right, but not the obligation to sell the underlying asset at a specified price (strike price) at or before a specified date (expiry of the option). The risk of the buyer of the put option is limited to the amount of the premium paid, plus transaction costs. The potential for profit is unlimited after the price of the underlying asset falls below the strike price. The value of the put option rises when the price of the underlying asset falls and… text/html 2014-08-05T07:36:10+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/long_straddle?rev=1407224170&do=diff Long Straddle This is a simple options strategy and involves simultaneous buying of at the money put and call option with same strikes and same expiry. Long straddle is used when the the price of the underlying asset is expected to break a price range or when there is expected increased in volatility (e.g. major economic data release or central bank decision). Potential profit is unlimited, while the maximum loss is limited to the sum of the premiums paid. text/html 2014-06-10T05:37:28+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/macd?rev=1402378648&do=diff Moving Average Convergence Divergence - MACD MACD is a technical indicator developed by Gerald Appel in the late 1970s and is supposed to reveal changes in the strength, direction, momentum, and duration of the trend. The MACD is calculated by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA. A 9-period EMA of the MACD (signal line) is plotted also on top of the MACD. This is signal line is used as a trigger for buy and sell signals. MACD could be plotted with E… text/html 2014-05-30T06:47:18+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/main-trading-sessions?rev=1401432438&do=diff Major Trading Sessions and Financial Centers Since the exchange of currencies is made by real people like you and me who trade for various financial institutions and for its own account, it is useful to know when and where market participants operate. The currency market has the following major sessions (London time): text/html 2014-06-05T06:35:46+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/momentum-indicator?rev=1401950146&do=diff Momentum indicator Momentum is showing the difference between current closing price and the close N periods ago. This indicator measures the acceleration of the price move and could be calculated by the following formula: Momentum = C(t) - C(t-n), where text/html 2014-06-04T08:07:35+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/moving-averages?rev=1401869255&do=diff Moving averages Moving averages are statistical indicators to analyze data points by creating a series of averages of different subsets of the full data set. The first element of the moving average is obtained by taking the average of the initial fixed subset of the data series. Then the first number of the series is excluded and the next number following the original subset in the series is included. This way the average is moved forward until the last number of the data series. The plot line … text/html 2014-06-04T06:03:08+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/news-trading-example?rev=1401861788&do=diff News Trading Example - ADP Employment Change If you read my books, you may remember that in my opinion the ultimate edge that we may have in trading is the knowledge. You must know how the market is functioning, how the fundamentals affect the prices, how to analyze the charts, etc. The only thing that is constant is that the markets are always changing. If you don't know almost everything about them, eventually you will fail. If you know a lot about the trading, you may find much better opport… text/html 2014-09-12T06:09:37+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/opening-range-breakout?rev=1410502177&do=diff Opening Range Breakout Opening Range Breakout could be used as a standalone strategy or as additional filter for opening of the positions in other strategies. Rules are very simple, but there are many variations depending on the underlying asset and traders risk preferences. text/html 2014-06-10T05:29:46+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/option-buyer-and-seller?rev=1402378186&do=diff Option buyer and seller Options give the right to their holder to buy or sell the underlying asset and as a derivative have their own buyer and seller. I know that this is confusing to a lot of traders and that's why I'll try to explain it. The buyer text/html 2014-08-19T07:18:29+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/option-expiry-selection?rev=1408432709&do=diff Option Expiry Selection Probably the best advantage FX options provide is that you can fine tune your strategy and trade in all market conditions with much less risk than the other traders. Implied volatility is very low during the last few weeks, which means that the prices of the options are cheap. This allows buying options with larger expiries and having more staying power. With the same amount of risk you have you can wait much longer and have much better probability to make profit. text/html 2014-07-02T11:09:49+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/option-offensive-strategy-example?rev=1404299389&do=diff Options offensive strategy example One of the best advantages that options provide is that you can adjust the position according to the current price action. Actually, traders have huge opportunities to take advantage of the price moves. Let me show you with an example what you can do. Around 6 AM (GMT) you buy a binary strangle (ladders with strikes 1.6620 and 1.6660) for total cost of 12.8 pts. Your max profit is 100-12.8 pts, or 87.2 pts. The price has to move in either direction before 8 AM… text/html 2014-06-09T18:55:50+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/options-basic-terminology?rev=1402340150&do=diff Options Basic Terminology Options are derivative financial instruments that give the buyer the right, but not the obligation, to buy or sell an asset at a predetermined price at any time before a specified date. Underlying asset in currency options for example is a currency pair for which the option gives the right to be bought or sold. The more liquid is this pair, the more liquid are its options. Each option has a text/html 2014-06-17T10:57:31+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/options-greeks?rev=1403002651&do=diff Options Greeks The market price of an option reflects the degree of probability the option to be “in the money” at the expiry. The impact of the main factors affecting the market price of the option could be analyzed by the so-called Greeks. These are only theoretical values derived from an option pricing model and are valid only for the moment when they are calculated so we should not rely on them more than that. text/html 2014-06-11T07:43:26+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/options-moneyness?rev=1402472606&do=diff Moneyness In options trading, moneyness is the relative position of the current market price of an underlying asset with respect to the strike price of the option. When an option is profitable and makes sense to be exercised we say that it is “in the money text/html 2014-08-22T05:38:54+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/order-flow-trading-binary-options?rev=1408685934&do=diff Order flow trading with binary options When you swim, it is best to go with the flow. The same rule applies for trading. When you buy, you should by where the large market participants buy, and when you sell, where the large market participants sell. If you do this, your trading will be much easier and much more successful. What you have to do is to identify these price levels, wait for the price to go there and look for confirmation by the quote reading or price action. Trading is really that … text/html 2014-06-19T13:49:08+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/pivot-points?rev=1403185748&do=diff Pivot Points Pivot points are significant price levels that are used for determining of support and resistance. The central pivot is calculated by the following formula: PP = (High + Low + Close)/3 Three additional levels of support (S1, S2, S3) and resistance (R1, R2, R3) are calculated by subtracting or adding price differentials calculated from previous trading ranges of the market. These levels are calculated by the following formulas: text/html 2014-07-14T10:50:49+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/price-action-basics?rev=1405335049&do=diff PRICE ACTION BASICS The price action trading is a style that is based on naked charts (no indicators). Decisions to open and manage the positions are mostly based on chart patterns, trend lines and levels of support and resistance. The most positive feature of this method of analysis and trading is that we trade what actually is going on the market and we are able to react quickly and appropriately if the situation changes. Furthermore, you should not try to predict where the price will be, but… text/html 2014-07-15T07:01:05+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/ross-hook?rev=1405407665&do=diff Joe Ross - Ross Hook According to Joe Ross, a Ross Hook is created by: * The first correction following the breakout of a 1-2-3 high or low. * The first correction following the breakout of a Ledge. * The first correction following the breakout of a Trading Range. text/html 2014-09-10T08:26:27+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/round-numbers-strategy?rev=1410337587&do=diff Trading around round numbers One of the best levels of support and resistance are the round numbers or figures. Currently the closest examples are 1.2900 for EUR/USD, 1.6100 for GBP/USD or 106.00 for USD/JPY. Usually around the round numbers are clustered various orders and they provide us with good opportunities for trading. text/html 2014-06-13T07:19:07+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/rsi?rev=1402643947&do=diff Relative Strength Index - RSI The relative strength index (RSI) is designed to show the current and historical strength or weakness of the market based on the closing prices of a recent trading period. This is a momentum oscillator, measuring the velocity and magnitude of directional price movements. RSI is calculated as the ratio of higher closes to lower closes by the following formula: text/html 2014-07-07T07:20:31+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/short-call-option?rev=1404717631&do=diff Short call option The seller of a call option has the obligation to sell the underlying asset at a specified price (strike price) at or before a specified date (expiry of the option), if the option is exercised by the buyer. The risk of the seller of the call option is unlimited. The potential for profit is limited to the amount of the premium received. When selling options there is one factor that is always in our favor - the text/html 2014-07-08T10:55:24+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/short-put?rev=1404816924&do=diff Short put option The seller of a put option has the obligation to buy the underlying asset at a specified price (strike price) at or before a specified date (expiry of the option), if the option is exercised by the buyer. The risk of the seller of the put option is unlimited. The potential for profit is limited to the amount of the premium received. When selling options there is one factor that is always in our favor - the text/html 2014-08-06T06:23:15+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/short-straddle?rev=1407306195&do=diff Short Straddle This is a simple options strategy and involves simultaneous selling of at the money put and call option with same strikes and same expiry. Short straddle is used when the the price of the underlying asset is expected to stay in a tight price range around the strike of the options or when there is expected decrease in volatility (e.g. before major economic data release or central bank decision, or during the summer months). Potential profit is limited to the sum of the premiums re… text/html 2014-08-04T10:21:31+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/short-strangle?rev=1407147691&do=diff Short Strangle This is a simple options strategy and involves simultaneous selling of out of the money put and call option with different strikes and same expiry. Short strangle is used when the the price of the underlying asset is expected to stay in a price range or when there is expected decrease in volatility (e.g. before major economic data release or central bank decision, or during the summer months). Potential profit is limited to the sum of the premiums received, while the maximum loss… text/html 2014-07-08T10:50:25+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/standard-deviation?rev=1404816625&do=diff Standard Deviation Standard deviation (σ) measures the amount of variation or dispersion from the average. Low values of the standard deviation mean that the data points are close to the average and volatility is low. High values of the standard deviation mean that the data points are at various distances from the average and volatility is high. text/html 2015-05-14T15:21:18+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/start?rev=1431616878&do=diff Trading Resources Forex Market and Trading Articles An online trading guide by Svetlin Minev. Forex books Books by Svetlin Minev Financial Markets Basics * Follow the Big Money * The Forex Market * Forex Market Transactions * Major Trading Sessions and Financial Centers * The Forex Market Orders * The Interbank Money Market * Commitment of Traders report (COT) Technical Analysis * Fibonacci Retracements * Pivot Points * Moving averages * Momentum indicator * Stocha… text/html 2014-06-05T07:57:00+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/stochastic-oscillator?rev=1401955020&do=diff Stochastic Oscillator This indicator was developed by George Lane and shows the location of the close relative to the high-low of the price range over a set number of periods. This indicator attempts to predict market turning points by identifying overbought and oversold conditions. text/html 2014-07-31T10:30:29+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/strangle?rev=1406802629&do=diff Long Strangle This is a simple options strategy and involves simultaneous buying of out of the money put and call option with different strikes and same expiry. Long strangle is used when the the price of the underlying asset is expected to break a price range or when there is expected increased in volatility (e.g. major economic data release or central bank decision). Potential profit is unlimited, while the maximum loss is limited to the sum of the premiums paid. text/html 2014-06-18T07:30:59+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/support-resistance?rev=1403076659&do=diff Support and Resistance Levels Support and resistance levels are points on the chart where the price move is expected to stop at least for a while or reverse. I will not waste your time with unnecessary definitions, because their names say everything there is to say. text/html 2015-09-09T05:52:41+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/svetlin-minev?rev=1441777961&do=diff Svetlin Minev [Svetlin Minev] It started back in 1995 when I got a job as FX dealer just after graduated from the university. I spent one week at the FX desk in bank's. There I saw for the first time Reuters terminal, candlesticks charts, technical indicators, central bank intervention, etc. Now you can find a lot of web sites, books and videos on trading, but back then it was almost impossible. The local stock market got a boost from the mass privatization and I changed the markets. Over-regu… text/html 2014-09-04T12:24:11+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/svetlin_s-trick-entry-ste?rev=1409833451&do=diff Svetlin's Trick Entry - STE This is my trading strategy that I've developed during the years. It is based on the pure price action principles and the idea is to follow the big money. Trying to guess where the price will be after 1 hour or 2 days is not trading. The name of the strategy is similar to the Joe Ross'TTE, because both strategies are similar. We are trying to enter the market before most of the other traders. The difference is that I tray to buy or sell even earlier. text/html 2014-06-30T12:31:31+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/swing-high-low?rev=1404131491&do=diff Swing highs and lows The first thing you need to learn about the price action trading is to identify the swing highs and lows. They are the building blocks of the most price action strategies and can be used as levels of support and resistance, and also for drawing of trend lines and price channels. text/html 2014-05-29T11:38:45+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/the-forex-market?rev=1401363525&do=diff The Forex Market The foreign exchange market (forex or FX) is the largest and most liquid financial market. It was originally created to assist the international trade and investments, enabling the free exchange of currencies of different countries. In recent years the development of technologies and access to cheap financial resources have shifted the focus of the foreign exchange market and now it is mainly used for speculation. I will try to point out some important points related to the nat… text/html 2014-06-15T18:22:48+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/trading-expected-changes-in-volatility?rev=1402856568&do=diff Trading of expected changes in volatility Have you thought about the fact that the prices of the financial instruments can go only in two directions? This is huuuuuge advantage and you have to learn hot to exploit it. Volatility is cyclical and sometimes it is easy know that significant change could be expected. Such cases are releases of major economic news or other important events such as central banks meetings. Years ago, you could just place a buy stop order above the current market price … text/html 2014-09-05T08:04:00+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/trading-support-resistance?rev=1409904240&do=diff Trading around support/resistance levels Large market players usually place orders around strong levels of support and resistance for various reasons. Above levels of support usually are clustered buy orders, while below resistance levels – sell orders. The purpose of this strategy is to use the presence of these orders and join the flow that is formed when they are activated. text/html 2014-06-16T07:00:25+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/trend-and-trendlines?rev=1402902025&do=diff Trends and Trend lines Prices of the financial instruments can move in one direction (trend) or sideways (consolidation). A lot of traders are asking themselves which is the best way to define a trend. This is very simple. When prices make consistently higher highs and higher lows we have an uptrend. When prices are consistently making lower highs and lower lows we have a downward trend. If there is no clear trend in the formation of the consecutive highs and lows, the market is in a consolidat… text/html 2014-09-25T07:39:37+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/triangle?rev=1411630777&do=diff Chart Patterns - Triangles Triangles usually form during a trend and are continuation patterns. The three main types of triangles, which vary in form and interpretation: symmetrical, ascending and descending triangle. These patterns contain at least two swing highs and two swing lows. When these points are connected, the lines converge. For the symmetrical triangle the trendlines converge toward each other. This pattern is neutral and the breakout could be in each direction, although the mor… text/html 2014-07-21T08:22:19+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/tte?rev=1405930939&do=diff Joe Ross - Trader's Trick Entry (TTE) Trader's Trick Entry is one of the best concepts in trading that I know, and it is integral part of my trading strategy. The idea behind TTE is very simple. Uptrend is a sequence of higher highs and lows, while the downtrend is a sequence of lower highs and lows. For continuation of the trend, a new high (uptrend) or new low (downtrend) should be made. If we use the terminology of Joe Ross, this means that the price should break beyond the last Ross Hook (R… text/html 2014-08-27T07:36:29+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/types-chart-patterns?rev=1409124989&do=diff Types of chart patterns Chart patterns are of two main types – reversal and continuation. The first indicates that a change is expected in the direction of the price move. The latter shows that, after some consolidation, it is more likely that the previous trend will resume. Knowing what chart pattern is in process of formation enables us to find better entries and to determine with greater accuracy the potential risk and profit. text/html 2014-06-02T08:06:21+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/volatility-explosion?rev=1401696381&do=diff Volatility Explosion Delta positive option structures are the best to use when you expect higher volatility ahead. You can use either straddle (same strikes usually at-the-money) or strangles (different strikes). If you trade with binaries straddles are not appropriate because the pay out is limited. In order to make profit with strangles, future realized volatility should be higher than the current implied volatility. On of the best times to expect this is when a major market event is expected… text/html 2014-08-13T06:46:17+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/wheat-trade?rev=1407912377&do=diff Commodities - Wheat trade 08/11/2014 When the prices consolidate in a tight range around support or resistance, you can take a trade with very good risk/reward ratio. In this case the initial risk was 3 cents. First part was closed for +2.6 profit, after the stop was moved at -2 cents Second part was closed for +10.2 cents profit. text/html 2014-07-10T11:46:01+00:00 Anonymous (anonymous@undisclosed.example.com) https://forexsb.com/wiki/trading/williams-r?rev=1404992761&do=diff Williams %R Williams %R is a momentum indicator, developed by Larry Williams, that reflects the level of the close relative to the highest high for the selected period. This indicator is similar to the Stochastics oscillator and is used to identify overbought and oversold market conditions. Williams %R is calculated by the following formula: