Forex trading – why such a challenge?.
This blog post discusses what the 80/20 Principle means, why it is so effective, and how Forex traders can benefit from it. I highly recommend actually reading the post instead of scanning gameanime.gaation overload is rampant in our modern society and we are not used to focusing on any topic for longer than 30 seconds But the 80/20 Principle is an . Forex trading can be very exciting and profitable, but usually traders lose money. Why? “Successful trading is 80% psychological and 20% methodological.
The owner or manager can then allocate sufficient resources, time and energy to this group. Deeper analysis, however, is always needed. For instance, there could be a future customer that has a potential of generating big business. Here is an information on gold investments.
You can also read about budgeting in forex for a better trading. Traders can analyze these relationships:. The above questions and ideas are just examples. Everyone is highly encouraged to analyze and find connections that benefit you as a trader.
Let's name this structure Brownie. It can be placed to the end of the indicator code. It is more convenient to use ready-made data from the OnCalculate function and pass them via Brownie rather than using the time series copying functions CopyOpen, CopyHigh etc.
Let's get back to the main indicator function. If there is a signal on a new day's first bar, the range of the previous daily bar should be filled. The signal line should start at the same first bar, but let's extend it to the last bar of the previous day for better layout perception. Since the calculations of a signal line, as well as line and filling colors for bullish and bearish bars are different, let's make two similar blocks:.
All the remaining layout lines are to be plotted inside the current timeframe's bars iteration loop. As already mentioned, the signal line should end at the bar where the price touched it.
The pending order line should start at the same bar and end on the bar, at which the contact with the price occurs.
Take Profit and Stop Loss lines should start at the same bar. The layout of the pattern is finished at the bar, at which the price touches one of them:. In fact, it has slightly wider opportunities as compared to the ones involved in this indicator — the function is able to work with audio files meaning that this option can be added to custom settings. The same is true for the ability to select separate files for buy and sell signals.
The code for checking the need for calling the function and forming the text for it located in the program body before completion of the OnCalculate event handler:. The trading layout according to the system is best seen on minute charts. Please note that the indicator uses the bar data rather than tick sequences inside bars. This means if the price crossed several layout lines for example, Take Profit and Stop Loss lines on a single bar, you cannot always define which of them was crossed first.
Another uncertainty stems from the fact that the start and end lines cannot coincide. These features reduce the layout accuracy but it still remains quite clear. The basic EA for testing strategies from the book Street Smarts: Let's insert two significant changes in it. First, the signal module is to be used in the indicator as well meaning it would be reasonable to set trading levels calculation in it.
We have already done this above. Therefore, let's remove the appropriate part of the code from the previous EA version adding the variables for accepting levels from the function and edit the function call itself. The listings of the old and new code blocks can be found in the attached file strings Another significant addition to the basic EA code is due to the fact that, unlike the previous two, this TS deals with a short-term trend.
It assumes that the roll-back happens once a day and is unlikely to be repeated. This means that the robot has to make only one entry ignoring the existing signal all the rest of the time until the next day. The easiest way to implement that is to use a special flag — static or global variable of bool type in the program memory.
But if the EA operation is interrupted for some reason the terminal is closed, the EA is removed from the chart, etc. Thus, we should have the ability to check if today's signal was activated previously. To do this, we may analyze the history of trades for today or store the date of the last entry in the terminal global variables rather than in the program. Let us use the second option since it is much easier to implement.
Provide users with the ability to manage 'one entry per day' option and set an ID of each launched version of the robot — it is needed to use global variables of the terminal level:. Let's add the variables necessary to implement 'one entry per day' option to the program's global variables definition block.
Initialize them in the OnInit function: Here the robot reads the values of global variables and compares the written time with the day start time, thus defining if the today's signal has already been processed.
Time is written to the variables in two places — let's add the appropriate block to the pending order installation code additions highlighted:. These are the only significant changes in the previous EA version code. The finalized source code of the new version is attached below. In order to illustrate the trading system viability, its authors use patterns detected on the charts from the end of the last century.
Therefore, we need to check its relevance in today's market conditions. I increased the indents specified by Raschke and Connors 10 times, since four-digit quotes were used when the book was written, while I tested the EA on five-digit ones.
Since there is no any guidance concerning the trailing parameters, I have selected the ones that seem to be most appropriate to daily timeframe and instrument volatility. The same applies to the Take Profit calculation algorithm added to the original rules — the ratio for its calculation was chosen arbitrarily, without deep optimization.
The full data on the robot settings used in each test can be found in the attached archive containing the complete reports. The rules programmed in the signal module match the trading system description provided by Linda Raschke and Laurence Connors in their book "Street Smarts: However, we have extended the original rules a bit.
The tools the robot and the indicator are to help traders draw their own conclusions concerning the TS relevance in today's market. The rule will not tell managers whether the revenue-generating customers are the same as the complaining customers. While there is a lack of scientifically stringent statistical analysis either proving or disproving the validity of the rule, numerous internal business analyses, and much anecdotal evidence exists to support the rule as being essentially valid, if not numerically accurate.
The basic assumption that underlies this rule is that things are typically distributed unevenly in life. In broad economic theory, the rule refers to the fact that a small percentage of the population owns a large percentage of an economy's financial assets. In June , Nigeria was found to have roughly this distribution of wealth within its country's borders.
However, the allocation of the increased wealth was not even, and it exacerbated the income inequality, thus adding to the Pareto principle. Six Sigma and other business management strategies have incorporated the principle into their designs for increased business efficiency. Analysis of performance results of salespeople across a wide spectrum of businesses also supports the rule. The principle appears valid simply from a basic logical analysis.
Obviously, not all efforts in any endeavor will be equally effective. It is logical to deduce that, from all the different efforts made toward achieving the desired end, less than half of them will eventually be responsible for more than half of the total results. Pareto efficiency is an economic state where resources are allocated Despite the opposition it faces, advisors should still plan to comply with the fiduciary rule.
While financial rules of thumb can be helpful at times, they can also be dangerously wrong. Here's how the financial technology sector is dealing. Too many inexperienced investors are reactive when it comes to their markets and investments, which can undermine financial goals. Some advisors are worried that the DOL rule could hinder relationships with would-be clients.
Deeper analysis, however, is always needed.
This layout makes it easier to evaluate the efficiency of the trading system rules and define what can be improved.