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What is the big ben trade strategy?
One of my favorite currency pairs to trade is the British Pound against the US Dollar (GBP/USD). It is super technical with a lot volatility (which means if you understand technical underpinnings, you can profit from the volatility). As a result, the exchange trends exhibit behaviors that provide clear trades – especially in the short term (We’re talking 5 minute time frame to expiration)
The perfect time to execute a Big Ben trade is in the morning in the United States, when the markets are sleeping, or if you are across the pond in Great Britain, in the morning when the markets are just about to open. Essentially For British traders were are talking 7am-9am GMT. For US traders were talking 2am-4am Eastern Standard Time – shake off that hangover, you can do it.
It is important that you wake you up before the market starts a new and exciting day. You’ll need this time to recognize the setup for the Big Ben trade, mark the trendline, and prepare the appropriate signal to initiate your attack depending if you are working with a resistance line or a support line..
Keep in mind that the Big Ben strategy only works with the GBP/USD trading pair. The trading hours are limited for this particular pair to just before the European Markets open – 7am-9am.
How to trade with The Big Ben strategy?
When I feel like pursuing the big ben strategy, the first thing I like to do is open a naked chart. A naked chart is simply a chart of the price of the asset (in this case the GBD/USD pair) without any indicators. The reason why I like to start with the naked chart is that I find it is the best way to “feel” the market trends. It is devoid of all distractions.
Once you have the naked chart sitting in front of you, you need to mark the trend and wait for the right breaking point. Marking the trend is a fairly simple, straightforward process never-the-less it is extremely important. Discerning the right trend is foundation upon which you will initiate the trade. If the trend is off it throws the entire trade into question. When looking at the naked chart, all you need to do is create a line based on the end of the candle. (Each blue, green or red bar marking in the below chart is a candle.) It is best if the line is based off more candle points, but three should be sufficient. Below you’ll see some examples. The moment the trend hits your breaking point – i.e. when the a candle crosses the support or resistance line – it is time to attack. Below you’ll find a few naked charts with a step by step breakdown of the process.
The Big Ben strategy has an amazing success rate for short term trades. You can also find success over longer trends, but you need to make sure the setup is clear to you.
Below are some step by step examples of the process we discuss in the above paragraph:
A CALL or PUT setup for a Big Ben trade
In the above example, you see two parallel lines drawn on an otherwise naked chart. You can see that each line touches three different candle points. In general, the line above the candles is called a resistance line as it “resists” upward trends. The line underneath the candles is call a support line as it “supports” against downward trends.
This example demonstrates that this asset price can initially be set up for either a CALL or PUT setup. If you notice the trend breaks above the upper “resistance line”, it is a CALL setup. If the price trend breaks the lower “support line”, it is a PUT setup. In this specific example the price trend of the asset represents a PUT setup. Meaning in this scenario it would be best to buy a PUT option. (See red arrow for downward breaking point).
A PUT setup for Big Ben trade
This scenario is similar to the previous example, however, here we only have a support line. Just as before, the support line is drawn based on at least three candle points. The key is to wait for the right setup – the moment the price trend breaks the support trendline. (See red arrow for moment price trend breaks through the support line). If you move too early or late the chance to capitalize on this perfect setup will be lost and you’ll have to wait until the time is right to use the Big Ben strategy again.
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A CALL Setup for Big Ben trade
We’ve already discussed a PUT setup and a PUT and CALL setup. In this final example we discuss the remaining potential example. The above graph displays a pure CALL setup. As always when making a Big Ben trade, you need to mark the trendline against at least three candles. In this case, the resistance line is above the price trend. The right moment will come when the price trend breaks above the resistance line. (See red arrow for moment when price trend breaks the resistance line.)
Trading Summary for the Big Ben Strategy:
Asset: GBP/USD currency pair
Time Frame: 5 min chart
Trading hours: 7:00am – 9:00am (GMT); 2:00am-4:00am (EST)
1) Mark the trend line
2) Prepare for a breaking point
3)Once you’ve identified the breaking point purchase a Call or Put option accordingly.
The first thing I do every morning, after coffee, is try to make a big ben trade. Overtime I’ve learned to know which setups to leverage into a large trade as well as which setups to avoid. I’ve had some greatly profitable mornings with this simple and easy to use strategy.
Remember: If there is no clear setup do not trade – wait for the next morning, there will be always new opportunities to use the Big Ben strategy.
Big Ben Trading Strategy for leveraging GBP/USD trends
Top Forex Trading Expert Advisors
The Tools to get started
The Fader Strategy Forex Expert Advisor
Fader Strategy Expert Advisor Here is a Expert Advisor (EA) based on the Fader Strategy adopted from Kathy Lien’s book, “Day Trading the Currency Market.”
Yes, again, due to issues, I will not explicitly list out the rules for this strategy. You can purchase your own copy of her book to read in depth more about this strategy. And yes again, this strategy works.
The strategy is based on trading fade outs, in other words, false breakouts. We check for a weak trending environment based on a low ADX number, and check for a false breakout which is prices go lower than the previous day, and reversing to a high, higher than the previous day. If this occurs, get into a buy order. A sell order works conversely.
Here’s an example. Click to expand.
Forex trading tips
Forex Trading Tips
The Dos And Donts Of Trading In The Forex Market
There are many people that invest in the forex market because someone they know has made some money doing it. This is not the way it should be approached since not everyone has the same results. Knowing what you should do and what should be avoided will make it simpler for you, and this article has plenty of that information.
DONT let your feelings get in the way when you are deciding on whether or not to make a trade. The forex market is much more complicated than it looks, and each and every move needs to be well thought out. You cannot close your eyes and make decisions and expect to make a killing. Even if you have this nagging feeling that you should do something, it is best to ignore it and do more research.
DO try a simulator before you risk any real money. This is one way that you can decide if the forex market is really a good fit for you. if you are doing horrific while using a simulator, it would be a good idea for you to keep your money in your pocket and invest it elsewhere. Forex is far too risky to take chances on, especially if you have an indicator that you would not do well.
DONT trade if you dont have the patience to wait for results. As stated a little earlier, forex is very complicated. There is a lot involved with it and it is not an arena that usually provides speedy results. If you need instant gratification, you should be on your way to the casino, because this is not the right thing for you. Forex is an investment opportunity, not a simple gamble. Keeping that in mind will help you stay on track.
DO think about the money you are investing before you make any rash moves. If you are not sure that you can stand to lose this money, dont do it. The only money people should use for forex trading is that they can stand to lose since this is such a risky investment. If you use money that was intended for something else, you may end up in hot water.
DONT think of forex as a game since it is far from it. This is a very real financial opportunity and you dont want to take it as a joke. People who walk into the door thinking that this is the same as playing slots or bingo are sadly mistaken. This is something that is very serious and you have to have that mindset if you expect to make any money.
Trading in the forex arena can be full of rewards, but there is also a chance that you can lose all that you have invested. Make sure that you are ready for whatever results you get from this. The article above had some useful advice that every trader should keep in mind, so make sure that you take all of it as serious as you take the entire process.
Forex Trading Tips part 2
December 21, 2020
Forex trading is one of the most effective ways of earning returns without leaving the comfort of home because it is rife without different currencies whose changing values make them easy to transact with. It is one of the best ways to tap in the currency market to gain financial independence while generating money within a short period. The following forex trading tips can be helpful in making the best of what the money market has to offer especially for new traders.
Initially, it is important to gauge the status of the market and learn its dynamics, which can be favorable or unfavorable. For example, a trader can understand how to avoid risks that are perverse in this platform, as well as get insight on utilizing the many benefits present. One can learn to anticipate the expected rise in value of a given currency by buying it beforehand and then selling it when it is expected to gain appreciation. They should also know that the most universal currency that serves as the exchange point is the US Dollar that can be used at all times especially when receiving the payment of the profit that has already been made. Likewise, by understanding the multiple risks that come in the way of the rookie trader from other traders, it is easy to adapt tried strategies that can save money.
The other important tip in Forex trading is in evaluating the market pliability first as an outsider before signing up. There are websites that offer mock accounts to new merchants where they can freely come to know the informatics of the money market and the best strategies used for success.
Initial research is also instrumental in carving a permanent niche in forex trading tips. Because of the many transactions that take place every day involving different merchants, it is essential to adapt a unique manner of conducting business in order to stem out undue competition. This is in fact a niche where survival tactics are necessary due to the fact that it is an investment faced with the hourly risk of monetary fluctuation.
Thus Forex trading should be informed by the above tips that can save the trader undue losses during and after their full entry into the money market. They should also gain mastery on particular monetary denominations that they can specialize in for the long-term. There are also the unfailing paring of denominations that can prop each other when one is experiencing depreciation.
Forex Trading Tips
Even if a trader doesnt have lot of knowledge about the market at first, it can compensate by learning continuously. By being patient and accumulating information, he can improve at a steady pace until he has what it takes to consolidate his profession as a Forex trader.
Reading our top 10 forex trading tips and tricks will set you ahead. Forex Bonus Lab has collected and filtered tons of tips just for you!
Top Forex Tip: Knowing oneself and adhering to a plan
A trader must know what his risk tolerance is and how much capital is he willing to invest at first. The risk tolerance must not be too low, because the trader is liable to lose a lot of money, or too high, because in that case the trader will not initiate enough trades and his profits will not make up for the paid spreads. A middle point is a good place to start and from there the trader can adjust his behavior depending on his style and the market conditions.
The trader also must examine himself and find out how much time is he willing to dedicate to Forex trading, because a schedule that is too short may spell doom for his future career. Also he must know how much time he is willing to invest in his learning, because that complements and reinforces his trading activity. He also should know if this will be his primary occupation or just a pastime to generate extra income. In the first case, he should dedicate more time to it. He should have a clear picture about all those things before commencing his trading program. Browse through nine more forex trading tips!
Second Best Trading Tip: Choosing a trust forex broker
Many brokers are deterred from their progress because they made a mistake when choosing a broker. All of their hard work and all their gains may be for naught if the broker is disreputable and does not treat the traders fairly. A trader should avoid brokers that allow slippage, do requotes or engage in other dubious practices. All the offers advertised by the broker must be verified; if they sound too good to be true, they probably are in some cases. Most brokers cater to all kinds of trader, but a customer must know if the facilities provided by the broker are designed for new traders or experienced ones and plan accordingly. They should also make sure that the broker provides a trading platform they feel comfortable with and also they should know how fast are the execution orders cleared. The customer service also must be organized in such a way to communication in different ways with the customer and in different languages. If they only offer support in the English language that means they haven’t put much thought in international clients. Mostly support is done in numerous languages, but you need to check whether the broker is offering the support in your language. We have provided many tips on this already, yet the more you know the better.
These brokers also provide a wide variety of accounts and traders should pick the one that offers them the best features. For example, new traders might want a coaching feature, while experienced traders might want advanced charting software. Also even if the brokers offer extra high financial leverage, that doesnt tell us that the traders have to make transactions with the leverage set to maximum every time because that will put them in a losing position in most cases. The traders should adjust their leverage in such a way that they are not liable to lose more than 2% 3% of their account balance on each transaction otherwise things may get quickly out of control. A mini account can also facilitate the transition from a demo account to a real account, because a new trader will be more attentive to what is going on in the market, but he will not be in a position to lose a great deal of money because of the small balance associated with the mini account. Earning profit on a mini account, even close to an insignificant sum may do a great deal by psychologically preparing the trader for the challenges ahead.
Forex Trading Tip And Trick 3: Keeping things simple at the start
The best way to approach trading at the start is to begin with small sums, because trading large sums does not guarantee great profits. It is important for the trader to accomplish a percentage of winning trades and this is more important at first than the total amount. Moreover, it is highly recommended to increase this deposit by earnings rather than making frequent deposits if this means that those deposits will be emptied on losing trades. A better alternative to adding money to an account without a plan is switching back to a demo account.
The trader also must focus on only one currency pair to keep things simple. That currency pair must consist of currencies that the trader knows well, such as the currency of his nation. Another good idea is choosing a currency that is widely traded and one that is examined at length in the financial articles along with predictions about its development. Such a thing will protect the trader from information overload and allow him to control the number of variables he is working with.
Simplicity also brings clarity of vision can help the trader to deal with the challenges ahead by helping him make decisions in a reasonable timeframe. Over-explaining and rationalizing too much over past mistakes can hinder the trader. He has to identify only the most obvious factors that led to his gain and loss and then to keep going. Using only just a few objects or indicators at first can help the trader grow by making sure he can assimilate all the information presented to him. Dont neglect, this is one of the most vital forex trading tips!
Tip 4: Doing what you understand
A trader must have a very good reasoning for initiating the positions and he must discern from the factors that are relevant and those who are not. If a position is chosen that is against what the market observers think it will happen, the trader must know how to argument his choice and list all the reasons why he took that position. The market observers are not always right; they too obtain a percentage of winning trades and also of losing trades and knowing when to listen to them and when to follow your own calling is of paramount importance. The trader must not base his trades on rumors, but on a detailed and elaborated reasoning constructed over time.
It is important to note that nobody has clear information about the evolution of a currency over a specified interval of time; that is influenced by a lot of factors, such as supply and demand, foreign trade or other factors that are quantifiable or not, so that the end result is unknown. A number of educated guesses and predictions can be made but those arent always correct. It is important to separate the factors that can be determined by those that can’t and to act accordingly. This is one of the most important tips!
Tip 5: Keeping your emotions aside
A trader must be as rational as possible when initiating a trade and to keep in mind that emotions such as greed, excitement or fear have no reason to be present during the orders. Despite the fact traders are human, they must find a way to control these emotions and not let them influence their judgment. Only plans based on facts, trends and indicators can contribute to the success of a trader, while emotions may hinder his progress. That is why traders are advised to start on a demo account, then move to a mini account and only then open a real account: they need to adjust to the platform and to grow accustomed to the risk environment, by being slowly exposed to more risk and learning to deal with it.
For example, greed may determine him to add to a losing position, which is a bad idea. When a trader loses on a position, then it is important to take the loss and move on, not being stubborn to make every transaction a winning one by adding money and by waiting inordinate amounts of time for the price change direction. That can only enlarge the losses and is not a valid strategy. If the reasoning that determined the opening of a position was faulty, then it is unreasonable for a trader to think that this reasoning may bring him profits in the future, so he should understand that taking the losses and moving one is a thing that all traders do, because that puts them in a position to win in the long term. Ready for five more forex trading tips?
Tip 6: Taking notes
The things that can contribute the most to the development of the trader are not fundamental and technical aspects, but rather his past experiences. In order to benefit the most from them it is important to record past transactions as well as profits or losses, stop-loss levels, exit points and price evolution. The more detailed these notes are, the better. This can be a helpful learning tool because the trader can see his past trading behavior and modify it if he has clear information about the past. He can also make a better distinction between winning trades and losing trades and see what determined these results if he has jotted down all the parameters regarding them. Most of the top market analysts also take notes, because they also think they can benefit from it, even if they have a great understanding about the market. New traders have even more to learn from this, making this principle one of the most important.
Tip 7: Automating the trading activity
Some traders would argue against EAs being one of the forex trading tips. Well, this is not about EAs or robots. This is related to having a plan and controlling the emotions. A trader must treat all the transactions the same way and to have the same attitude when he is about to make a transaction. By following the detailed plan he needs to give the same importance to all the transactions and not to act on emotions. Right after a trader has learned the fundamentals, he will be in good shape to automate all his decisions without giving them a lot of thought. It is not to say he will not think of the transactions he is doing, but because he has previously examined similar transactions, he will be used to the process and be more effective. Making automated trades contributes greatly to controlling the emotions, which is obviously very useful.
Automating the transactions does not refer to using forex robots or other untested products, because most of these wonder methods are scams. It is indicative the fact that the creators of these products don’t use them to get rich, but they make money by selling them to others. This goes a long way to show the real usefulness presented by these products. The decisions even if they are automated must belong to the trader based on his market perception and reasoning, not to be made by items of dubious origin.
Tip 8: Following the trends
An obvious way to approach trading is to wager that the trend will maintain its course over the period of time the position is maintained. Going against the trend is best suited for advanced traders. Generally there is no reason to go against the trend unless indicators show that a change of trend is possible. Even so this movement against the markets is riskier than just betting on the trend and it tends not to be so profitable in the long run. Expectations that the price level will cross a strong support or resistance level are most of the time unreasonable and trading with this expectation may spell disaster even in the short term. It is important to note that Forex is about probabilities. If it’s more likely that a price will rise rather than go down, then a long position will determine more earning on average and should be chosen. Probabilities that the price will pass support or resistance levels tend to be lower, so a good strategy must incorporate those price levels.
Tip 9: Studying money management and the market
During his professional development it is important for the trader to study as much as he can and try to apply what he has studied in the market. After he has mastered the topics regarding risk taking, position opening and exiting points, he should be in good shape to accomplish everyday activities regarding trading. After that he can try to put in practice more refined strategies, like fundamental and technical studies and see if this increased degree of difficulty helps him. From there he can customise his strategy and choose the combination of indicators that works best for him. A trader should not try to put these studies in practice at the beginning, because trend examining and emotional control will serve him better at that stage. Neglected by many forex traders, this is one of the most needed forex trading tips for advanced traders.
Top 10 Forex Trading Tip: Not giving up
Even when things don’t go his way, respecting the strategy constructed previously and showing great determination and perseverance can help a trader succeed in the long run. It’s true that great skill can only be obtained over a period of time and in the meanwhile the trader must be patient and try to be informed with market news and fundamental and technical studies until he has amassed enough knowledge to make him a successful trader. By making calculated risks and not overextending, he can be in a position to profit from a favorable turn of events while not being seriously affected in the case of a downturn. Competent money management can prevent the trader from being in a very bad spot. Even top market experts have started from somewhere and by examining what worked for them and how long it took, the trader can make a comparison with his current situation and future possibilities that lie ahead.
Take a note of these forex trading tips! They are gold.
As you have learnt 10 trading commandments, we invite you to try out 25 EUR no-deposit bonus by Plus500 and see how well you can stick to these forex trading tips.
Forex Trading Tips
Trading Forex is something that is very likely to result in people giving you trading advice, either on the internet, on television, or from people in your daily life. Whether or not these tips should be considered sound trading advice is something you will have to take into consideration before or if you use them. Everyone wants to play the hero and tell you that they just “know” the EURUSD is going down or that they heard a great free Forex tip from someone who is in the know recently. Don’t take anything at face value when it comes to Forex tips, do the research yourself, make sure everything checks out before acting on any Forex tip you might receive.
One thing that can certainly improve your ability to discern between quality Forex tips and those that are less than genuine, is getting good Forex trading education. If you are armed with a solid Forex education, you will have a much better idea of what successful trading is all about and which free Forex tips you should listen to and which you should ignore.
The problem that many traders face is that they start trading with no solid Forex training behind them, they then believe just about any Forex trading tip they hear. This can obviously cause a lot of confusion and emotional trading, which naturally results in much lost money in the market.
One very big factor in determining whether or not you should take any specific Forex tip are the qualifications of the source that you got the tip from. If you get a free Forex trading tip from a professional trader, who you are quite certain makes good money trading the market, you can probably rest assured their Forex trading tips are solid and worth listening to at least. If you read a Forex tip from someone you know nothing about, or from some website you know nothing about, you had better think twice before using this tip, because there is a good chance it is just a ploy to get you to buy something. Also, if someone or some website is telling you that you if you pay them a steep monthly fee they will give you quality Forex trading tips or advice, you should probably consider it a scam. There is a big difference between paying for quality Forex training and paying for simple trading tips. Most trading tips should be free Forex tips, as a tip is not really an in-depth or comprehensive Forex trading education, thus it really is not worth paying for.
Finally, the best Forex tips might be the ones that come from your own research and education, trading is a profession that requires much self reliance and self confidence. You cannot expect to rely on other people for quality Forex trading tips and think you will make a full-time living as a trader. You need to invest in your own Forex trading training and then you can learn to trust your own Forex market analysis.
Trading strategy of ltcm
Trading strategies of ltcm, forex trading videos download.
The LTCM incident highlights a number of tax issues with respect to hedge. fund’s use of active trading strategies is closer to that of financial. In August/ September 2006, Amaranth, a multi-strategy hedge funds aren’t they all? lost $6 billion after massive natural gas trades went awry. Near-collapse of Long-Term Capital Management in 1998. r 2001 Elsevier. Convergence trading strategies were made popular by the hedge fund Long-.
Trading strategies of ltcm:
If you want to learn about Hedge Funds this is a great documentary on the techniques and strategies used by LTCM. Most Hedge funds lose. LTCM began trading in 1994, after completing a road show that, despite the. own book on option-based trading strategies and their effects on market volatility. LTCM was perceived as the master of relative-value trading, which involves buying. funds and bank trading desks were doing simplistic versions of its strategy.
forex trading videos download:
Strategy. It meant being able to borrow 100% of the value of any top-grade collateral, and with that cash. Trades typical of early LTCM were, for example, to buy. Strategy. It meant being able to borrow 100% of the value of any top-grade collateral, and with that. money just trading against LTCM’s positions. Under these.
When Genius Failed: The Rise and Fall of Long-Term Capital Management by Roger Lowenstein
Random House, September 2000, 264 pages
Review score: *** out of *****
The classic image of a Wall Street market trader is someone, usually a man, on the trading floor, shouting buy and sell orders, clutching a sheaf of trading tickets. Floor traders must have an instinctive feel for trading and get by on their quick wits. They are now a vanishing species and will soon join Mark Twain’s riverboat captains in extinction and myth.
Modern trading is now almost entirely paperless and takes place in the cyberspace of computers and computer networks. The instincts of market traders are being augmented and in some cases replaced by mathematical pricing models. Traders are being drawn from schools like MIT, rather than the City College of New York. A feeling for market dynamics and trends will always be important, but along side these skills modern traders have a command of statistics and probability theory.
John Meriwether gained a measure of fame in Michael Lewis’ book Liar’s Poker . where he is described by Lewis as a Salomon Brothers Uber-trader and master of Liar’s Poker. Meriwether was one of the top bond traders at Salomon Brothers and later became head of the fixed income securities department (which was responsible for mortgage security and bond trading). Meriwether was one of the first people on Wall Street to recruit mathematicians and physicists from schools like MIT and Cal. Tech and turn them into bond traders. Meriwether was a harbinger of the conjunction between Wall Street and the Ivory Tower.
Perhaps to the horror of the old Wall Street operators, academic financial theory provided a framework that allowed markets to function more effectively. One example of this is the Black-Scholes model for pricing stock options. Acceptance of the Black-Scholes model has become so wide spread that Web sites like Yahoo and E*trade that quote stock option prices also list the associated Black-Scholes values.
When Genius Failed . by Roger Lowenstein, is the true story of Wall Street traders, academics and hubris. It is the story of the failure of Long-Term Capital Management, a hedge fund founded by John Meriwether.
In 1991, when John Meriwether was the head of the Salomon Brothers fixed income security desk, a US Treasury bond trader in Meriwether’s department at Salomon falsified a US Treasury bill bid. The scandal that ensued when this came to light put Salomon in danger of losing their status as a Treasury bill broker. The head of Salomon, John Gutfreund was forced out and Meriwether went along with him.
This left John Meriwether unemployed and very wealty. But Meriwether, to use Michael Lewis’ term, was a Big Swinging Dick, a Master of the Universe, an Uber-Trader. Consignment to the golf course, even a very exclusive golf course, is not as gratifying as being a player in the market. In 1993 Meriwether took the first steps toward founding the Long-Term Capital Management (LTCM) hedge fund. As befits a Big Swinging Dick market trader, LTCM was to be a Big Swinging Dick of a Hedge fund, capitalized with two and a half billion dollars. For the privilege of having their money managed by Masters of the Universe, LTCM would also charge investors over double the usual management fees.
A hedge fund is an investment fund for wealthy individuals and institutions like banks and pension funds. The number of investors in a hedge fund is limited and they are restricted, in theory, to only those who can afford the risks which may be associated with the hedge fund. Unlike mutual funds, hedge funds are unregulated.
Although the story of the failure of LCTM and its subsequent bail-out, organized by the US Federal Reserve is inherently interesting, it is the stories of the people involved that make When Genius Failed difficult to put down. Lowenstein wrote a best selling biography of Warren Buffet and he excels at telling the stories of the people behind the events.
The Genius mentioned in the title refers to Robert Merton and Myron Scholes. Nine months before LTCM failed 1997, Merton and Scholes shared the Nobel prize in economics. Merton, Scholes and Stanford’s William Sharp (famous for developing the sharp ratio to measure risk) are some of the founders of modern finance, which attempts to apply quantitative techniques to market analysis. Merton and Scholes jumped at the chance to join LTCM where they could not only apply their theoretical work but make a great deal of money.
The trading cachet of the LTCM trading group, headed by Meriwether and the stellar academic reputations of Merton and Scholes was joined by the final pillar of LTCM’s power base: David W. Mullins who was vice chairman of the US Federal Reserve before joining LCTM.
As a Big Swinging Dick hedge fund with the most stellar partners and a huge capital base, LTCM was able to convince banks to lend them money at rates that were not available to lesser mortals (including investment banks like Salomon Brothers). LTCM used this credit to leverage their capital base by a factor of twenty to thirty times. In the first few years this allowed LCTM to make spectacular profits for themselves and their investors.
One of the flaws of When Genius Failed is that Lowenstein sacrifices the details of the investment strategies used by LTCM to tell the story (Nicholas Dunbar’s book Inventing Money does a better job explaining the details of the LTCM’s financial strategies). Many of the strategies that LTCM used involved derivatives. The term “derivative” has taken on an ominous cast because of the failure of hedge funds like LTCM. Derivatives are more innocent than their sinister reputation. A derivative is a security that derives its value from an underlying asset. A futures contract for corn, for example, derives its value from the underlying market price for corn. A stock option derives its value from the underlying price of a stock or stock index. Derivatives and the strategies traders use to make money on them can be complex and Lowenstein may have felt that these details would make the eyes of many readers glaze over. For example, Lowenstein never fully explains what exactly a “swap” is and incompletely explains LTCM’s “volatility” bets. As we will see below, LTCM lost most its money on swaps and volatility bets, so these derivatives play an important part in the story. I’ve included a footnote here on interest rate swaps and volatility bets.
In the epilogue Lowenstein summarizes LTCM’s losses:
Long Term Capital Management HBS Case Questions
1. Analyze different trading strategies of LTCM
LTCM engaged in primarily in convergence and relative value strategies.
Relative value strategy. It is a spread trade and it involves two assets whose prices or yields tend to converge with time. it involves long and short positions of similar instruments. This often happens when a company has more than one holding company listed in different markets (e. g. Royal Dutch and Shell). The price divergence in these different markets creates profitability. Although the price may not completely converge, but the premium tends to narrow over time.
Convergence Strategy: In case of convergence strategy the two asset prices or yields must converge. when there was a specifiable future date(usually medium-term fixed maturities) by which convergence of offsetting short and long positions in similar instruments should occur. An example would be a strategy consists of buying off-the-run high yield bonds and shorting on-the-run low yield bonds. Once the newly issued on-the-run bonds become off-the run, the yields on the two bonds converge and LTCM makes a profit. This is a simple strategy and not necessarily a risky trade since it is very likely that the yields will converge once the on-the-run bonds become off-the-run. Since the yield spread between on – and off-the-run bonds is very narrow, it is possible to make significant profits only with large positions.
It also involved in directional trades, which were un-hedged positions like long on French Government bonds. Their trading opportunities arose as a result of dislocations in the financial markets caused by institutional demand.
a. Swap spread trade: ( Case page -4: swap spread example)
Swap spread: the spread between the fixed rate on the swap and the yield on a treasury bond of comparable duration.
Ltcm trading strategies, understanding stock trading terminology.
Types of investment strategies that are common among hedge funds, and. the traders at LTCM needed to leverage their trade in order to magnify this return. Edit. The company used complex mathematical models to take advantage of fixed income arbitrage deals termed. Hedge Fund Trading Strategies – The Rise & Demise of Long Term. Explained Documentary Trading Strategies & Techniques of LTCM.
Ltcm trading strategies:
Did the Federal Reserve act prudently in engineering a rescue of LTCM. a trading strategy, of course, is not what is generally meant by “hedging”; that is, it. Why did such smart people–and the principals in LTCM are smart, even if some of them have. Their trading strategy, goes this story, was basically sound. Meriwether assembled an all-star team of traders and academics in an attempt to create a fund that. LTCM’s main strategy was to make convergence trades.
understanding stock trading terminology:
Among the PRMIA Case Studies, LTCM has some unique characteristics. trading strategies and dynamics of those markets, the motives and performance of. LTCM
Free forex learning
Welcome to Learning Forex Trade where we review my Heiken Ashi forex trading methods, profitable trades, how I approach the market and possible trading opportunities.
Sign up and get free access to the HA-30 training videos to see how I use this method to profit from the Forex
Just fill out the email subscription box to the right here on the site and you will receive the free training videos and as a added bonus you will also receive the custom indicator to install on meta trader that I use to trade along with the HA-30 strategy.
Learning Forex trading is one of the first things any new Forex trader must do before starting trading with real money. On this page you will get all needed resources to start learning online trading. The training materials you will find here will help you understand the market, learn how it works and start trading successfully.
1. Forex Trading Webinars
Today webinars are one of the most popular and effective ways to learn online. The Forex trading webinar below is organized and broadcast online by professional Forex traders to educate and teach other traders how to trade in the Forex market.
With a help of the live webinars, a Forex trading mentor can teach an unlimited number of traders from different countries in the wold simultaneously. During the training sessions beginner traders may ask questions and discuss trading aspects online with the mentor and other participants.
Click here to register for a FREE Forex trading Webinar now.
2. Trading Video Lessons
We invite you to visit our page Trading Training Videos to get a short free video course about online trading. This professionally done course consists of 6 lessons and covers the most important aspects of online trading in financial markets.
These training videos are created by eToros professional team. They cover such topics as psychology of online trading, fundamental and technical market analysis, trading strategies and approaches, signs for opening a trading position and closing it and many other useful information.
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3. Forex Trading E-course
Dont underestimate a Forex e-course. This is a great way to obtain more information about Forex market, trading strategies and trading tips. Written by professional and experienced traders, Forex training e-course is a great source of knowledge for any trader.
By signing up to an e-course below you will receive your Forex educational materials by email and will be able to cover them on your free time.
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4. Practicing on a Demo Account
If Webinars and e-courses provide us with the necessary Forex trading information, trading on a demo account is the best way to practice your gained knowledge about Forex market and develop your Forex trading strategy.
Most of the Forex brokers provide free demo accounts where every trader may trade in a Forex market with live currency rates imitating the real Forex trading. Practicing your Forex trading skills is the most important step to the successful online trading.
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1-2-3-4forex reversal trading strategy
1-2-3-4 Forex Reversal Trading Strategy
Written by Leslie Hampton
A 1-2-3-4 reversal chart pattern is build up of 4 definable points, known as point 1, 2. 3 and 4. A typical 1-2-3-4 chart pattern is best traded after a strong currency pair up – or downtrend and can be defined by an easy set of trading rules. A trader can confirm the reversal trade using a technical indicator such as DMI or MACD.
1-2-3-4 Basic Rules for Short Trades
Point (1): The high in an up trending currency market.
Point (2): A downward correction in the up trend, the lowest bar in the correction before the price moves back up to point (3).
Point (3): The high in the move up from Point (2) but a failure to make a new higher high(Point 1).
Point (4): Go short 1 pip below point (2)
1-2-3-4 Basic Rules for Long Trades
The reverse is true when applying these basic rules for long trades but now:
Point (1): The low in a down trending currency market.
Point (2): An upward correction in the downtrend, the highest bar in the correction before the price falls back up point (3).
Point (3): The low in the move down from Point (2) but a failure to make a new lower low(Point 1).
Point (4): Go long 1 pip above point (2)
1-2-3-4 Up Forex Reversal Strategy using MACD
1) Trade this reversal pattern only after a strong downtrend
2) Place points (1),(2) and (3) on your chart
3) Place a BUY order 1 pip above (2)
4) Confirm the trade using the MACD indicator (or another); the MACD must signal a buy or in buy mode already.
5) Target level: Calculate the distance between (2) and (3); if for example the distance between (2) and (3) is 50 pips, than 50 pips is your target level.
6) Place your stop 1 pip below (3)
1-2-3-4 Down Forex Reversal Strategy Using DMI
1) Trade this reversal pattern only after a strong up trend
2) Place points (1),(2) and (3) on your chart
3) Place a SELL order 1 pip below (2)
4) Confirm the trade using the DMI indicator (or another); DMI must signal a sell or in sell mode already.
5) Target level: Calculate the distance between (2) and (3); if for example the distance between (2) and (3) is 250 pips, than 250 pips is your target level.
6) Place your stop 1 pip above (3)
Forex trading risk vs reward
Risk/Reward Ratio in Forex What Is the Proper Risk and Reward Ratio in Forex Trading?
It is very easy to find hundreds of articles about risk/reward ratio in forex trading, but the problem is that most of those articles are not written by real traders who trade for a living or have been working as professional traders for a while. Most of them are written by freelance writers who are paid to write articles, or bloggers and webmasters who want to drive some traffic to their blogs and sites.
Most of these writers have never placed any order on the market throughout their lives. The bigger problem is that novice traders believe each and every word of these articles, just because they are published on the Internet, but they dont know that the directions that these articles suggest, are not applicable in live trading. After reading these articles, novice traders try to apply them in their trades and after such a long time of trial and error, they will think that they are not able to follow the trading rules and so they give up, whereas it is the information and directions of the articles that could not be applied in live trading.
For example, on most of the articles you read about risk/reward ratio, it is strongly recommended that novice traders should not even think about taking positions with a risk/ratio of as high as 1:1 or even 1:2 (I will explain what these numbers mean later in this article) and the minimum risk/reward ratio of the positions that new traders take should be 1:3. There is nothing wrong with it so far, but the problem is that these articles never clarify whether traders should have a low risk/reward ratio through having wide targets OR tight stop losses. As nobody likes to lose, specially new traders, they all think that they should make their stop loss as tight as possible to have a low risk/reward ratio trade, whereas this is a big mistake. No matter how tight or wide the targets are, a trader can not fool around with the stop loss. Choosing the stop loss has its own rules that can not be ignored and broken. If you set your stop loss tighter than what it has to be, you will be stopped out easily even when your position is correct.
Something that looks even stranger in these articles is that they emphasize that novice traders should not take positions with 1:1 or 1:2 risk/reward ratios. Does it mean that experienced traders can do it? Are there different trading rules and techniques for novice and experienced traders? Maximizing the profit and having 1:3 or 1:5 trades can be done by professional and experienced traders, but there are some technical and emotional difficulties in front of novice traders to do that. For example, to achieve a successful 1:5 trade, you may have several losing trades (I will tell you why), unless you know how to choose the strong trade setups. This is not a problem for professional traders at all, but for a novice trader who is learning the techniques and has to build his/her confidence at the same time, having losing trades can cause lack of confidence and excessive fear that prevents him/her from advancing to the next steps.
So we can not believe and apply whatever we read over the Internet. There are zillions of systems, techniques, indicators. robots and that are absolutely useless when it comes to live and real trading.
After the above introduction, lets see what risk/reward ratio is and why it is important in forex trading. Risk is the amount of the money that you may lose in a trade. If you have already read the money management article. you know that we should not risk more than 2-3% of our capital in each trade. It means when we find a trade setup and we find a proper place for the stop loss, we have to choose our position lot size in the way that if the market hits our stop loss, we lose maximum 2-3% of our capital. For example we have found a trade setup with EUR/USD that has to have an 80 pips stop loss. We have a $5000 account. If EUR/USD hits our stop loss, we should lose $150 which is 3% of our capital (0.03 x $5000 = $150). It means 80 pips equals $150 (you can use the position size calculator I have on the money management article ). This $150 is our risk. But what is the reward? Reward is the profit that we can make in a trade. In the above example, if we choose a 160 pips target for our trade and EUR/USD hits this target, we will make $300 (when 80 pips equals $150, so 160 pips equals $300). This $300 profit is the reward.
So what is the risk/reward ratio of this trade? 150:300 = 1:2
The larger the profit (target) against the loss (stop loss), the smaller the risk/reward ratio which means your risk is smaller than your reward. For example, if your stop loss is 20 pips in a trade and your target is 100 pips, your risk/reward ratio will be 1:5 in this trade.
What is the recommended risk/reward ratio in forex trading?
1:3 or 1:5 risk/reward ratio is achievable when the market trends after forming a too strong trade setup. and you succeed to enter on time. In most cases you should be able to hit the top and bottom of the trends, no matter on what time frame you trade. Or if you enter at the middle of the way, the trend should be strong enough to give you another big movement and make a profit which is 3 or 5 times bigger than your stop loss. You can do that. Why not? But there are just a few problems: 1. Markets form a trend in less than 30% of the cases; 2. Some trends are not strong enough that if you enter with delay and while they are at the middle of the way, they can hit your target which is 3 or 5 times bigger than your stop loss. 3. There are many cases that you miss the trends; you hesitate to enter and so you miss the chance; you think you have found a trend whereas you are wrong and it returns and hits your stop loss and. So you lose in many trades, because you want to catch a big one.
So in reality, you have to lose in many trades, or have many of your trades closed at breakeven by the stop loss (because you will have to move the stop loss to breakeven when you are in a special amount of profit), or not to trade for such a long time waiting for a strong trend, until you can have a 1:3 or 1:5 trade.
How is it possible to catch a 1:3 or 1:5 trade without losing so many other trades?
If you take a position with 1:3 or 1:5 stop loss to target ratio and then you wait for it to hit your stop loss or target, you will have so many losing trades before having a winning trade. The reasons are mentioned above.
One solution is in moving the stop loss. You should not let your stop loss remain at its initial position. To have a 1:3 trade, the distance of your entry and your final target should be splitted into 3 parts (at least), while each part is equal to your original stop loss value. For example if you have a 50 pips stop loss, you should have a final target for 150 pips which should be splitted into three 50 pips levels. Then you should move your stop loss in three stages (in this example I assume that you take a 3% risk in each trade):
1. If the price reaches to the first 1/3 level, you should move the stop loss to breakeven. At this stage, if the price goes against you and hits the stop loss, you will get out without any profit/loss, BUT you should consider that you had an initial risk of 3%.
2. If it reaches the 2/3 level, you should move the stop loss to 1/3 level. At this stage, if the price goes against you and hits the stop loss, you will get out with a profit which equals your initial risk. For example if your stop loss has been 3% of your account, you will get out with a 3% profit. Therefore, such a trade will be ended as a 1:1 risk/reward trade.
3. If it becomes so close to the final target, you should move the stop loss to 2/3 level. Then you have to wait until it hits the final target or returns and hits the stop loss. At this stage, if it goes against you and hits the stop loss, you will get out with a profit which is twice of your initial risk. For example if your stop loss is 3% of your account, you will get out with a 6% profit. Therefore, such a trade will be ended as a 1:2 risk/reward trade. If the price hits the final target, your trade will be closed with a 9% profit and so you will have a 1:3 risk/reward trade.
So, to have a 1:3 trade, you will have some -3% trades which are those trades that hit the stop loss at its initial position. You will also have some 0% trades that are those trades that hit the stop loss at breakeven. Some of your trades will be +3% trades which are those that hit the stop loss at 1/3 level. Some will be +6% trades which are those that hit the stop loss at 2/3 level. And finally, some trades will be +9% trades which are those that trigger the final target.
Another solution is in taking the too strong trade setups on the long time frames like daily, weekly and monthly. If you wait for the too strong trade setup, they are usually strong enough to move the price for hundreds of pips, and so you can have wide targets.
Now the question is what percent of your trades will be -3%, 0%, +3%, +6% and 9% trades?
It is impossible to answer the above question, because it depends on many things including the trading strategy and market condition. However, there is something that gives us a clue about the number of our 1:3 and 1:5 trades. It is the fact that says market trends only in 30% of the cases and it makes ranging, 70% of the time. To have 1:3 and 1:5 trades, we should have a strong trend, otherwise our stop loss will be triggered in one of the stages before reaching the final target, no matter what time frame you use to take your position.
No need to remind again that in any of the -3%, 0%, +3%, +6% and 9% trades your risk is the same which is 3%. The first conclusion is that taking the risk and the position is up to you, BUT it is the market that determines how your trade should be ended. This is something that all traders, specially novice ones should consider. When you read in different websites and web pages that your trades should only be 1:3 and 1:5 trades, you should consider that you really never know how many of your trades will be ended as 1:3 and 1:5 trades.
The stop loss of the positions that I take are chosen based on the technical analysis rules that I have for myself. I will never break any of these rules. Some traders think that my stop losses are too wide, but they are not. Unlike some other traders who have a constant value for their stop loss (for example any position they take, with any currency pair and any time frame, has a 120 pips stop loss), I mainly follow the rule of thumb we have for setting the stop loss. The rule says that you should place your stop loss in a position that becomes triggered only when the direction you choose is completely wrong. So when I want to set the stop loss, I ask myself under what condition the position I have taken is wrong. The answer I give to this question is the position of the stop loss. In one of the articles I published long time ago, I have explained about setting the stop loss and target orders.
If you are new to forex trading, then the most important thing for your to learn is that you know how to take the strongest trade setups on the longer time frames. Read this article carefully to save a lot of time and money and become a profitable trader as soon as possible: Become a Profitable Forex Trader in 5 Easy Steps
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The refco bankruptcy and its impact on retail forex trading
The Refco Bankruptcy and its Impact on Retail Forex Trading
The Refco IPO and Fraud Scandal
New York-based Refco Inc. was a large and well-known forex and commodities brokerage house that was one of the main futures brokers on the Chicago Mercantile Exchange. In 2005, the broker was forced into filing Chapter 11 bankruptcy from creditors in the wake of an announcement about fraudulent practices involving their CEO Philip Bennett hiding the companys bad debts. This fraud was facilitated by loans from Bawag P. S.K, the fourth largest bank in Austria.
Interestingly, this blow came just after an Initial Public Offering of stock for Refco was made, raising suspicions that the forex brokers management had been guilty of dressing its books to make the IPO more successful. The IPO shares were offered to the public at an initial price of $22 per share through a number of investment bankers that included Credit Suisse First Boston, Goldman Sachs, and Bank of America that were all supposed to have reviewed the brokers finances as part of their due diligence. Read our story about Goldman Sachs involved in a one billion dollar forex scam !
Refcos shares were traded publicly for just two months, and even hit a high of $30.12 on September 7 th of 2005, before the fraud was disclosed barely a month later on October 10 th. The announcement understandably panicked investors, sending the 26.5 million shares of the newly-public company crashing to just $0.80 a share.
Although the forex broker had previously boasted of annual earnings of 33% per year before being taken public, it was basically forced into declaring bankruptcy just two months later.
How the Bankruptcy Affected Refcos Accounts
Phillip Bennett was the CEO of Refco. In October of 2005, Bennett was accused of padding the companys finances by hiding $430 million in bad debts of a wholly-owned and unregulated subsidiary which he controlled by the name of Refco Capital Markets.
Refcos forex brokerage arm, Refco FX, LLC, was holding over 17,000 retail customer brokerage accounts at the time that Refco declared bankruptcy shortly thereafter. In the bankruptcy proceedings, Bank of America and other large creditors managed to convince the bankruptcy court that Refcos customers were actually unsecured creditors because of Refcos failure to segregate its customer accounts from their own general funds, despite telling customers that it had done so.
This legal maneuver resulted in the unsecured customer accounts being considered as creditors only after the secured customers in the distribution of whatever funds were left to be distributed. Although FXCM made a reasonable offer in late 2005 to purchase the RefcoFX accounts, it was rejected and most of the brokers 17,000 customers eventually received little or no compensation for the balances in their brokerage accounts at the time they were frozen by the bankruptcy.
The Refco situation perfectly illustrates how a forex brokers financial troubles can result in the loss of their clients money on deposit without their customers having any effective legal recourse just by having client accounts comingled with their own.
The Impact of Refcos Failure Today
Refcos wide-reaching failure continues to impact the retail forex and commodities market, not to mention the billions of dollars lost for the initial investors in its now virtually worthless stock. The total fraud has been estimated at $2.4 billion, of which less than half was recovered for creditors.
While Refco had had problems with its reputation as a broker before the fraud was exposed, many of their retail forex customers were unaware of this and lost all of the money in their accounts. The lessons of Enron, which were still fresh in peoples minds at the time, were not heeded.
Avoid Brokers Who Co-mingle Accounts
In light of the Refco debacle, it pays to have an idea of what to avoid to prevent what happened to Refco s forex clientele from happening to you. A number of simple considerations should be taken before opening a forex trading account with any broker, see more about forex demo accounts.
The big mistake made by the Refco customers was that. whether they were aware of it or not, their funds were held in co-mingled accounts. In other words the customer account money was placed in a larger account which held money from a variety of sources, primarily Refcos.
By having their money in co-mingled accounts, the customers could not claim their assets ahead of other creditors when the firm filed for bankruptcy. Accordingly, avoid co-mingled accounts.
Beware of Difficult Withdrawals
One item that seems to be missed more often than not is, once you have given the brokerage your money, how easy will it be to get it back. Many people open accounts without reading the fine print and are only made aware of key facts once funds are committed.
Basically, if a brokerage firm makes withdrawing money difficult, this could be a clear sign that they may not intend to give it back. Read all the fine print and make sure you can get your money out of your account without too much hassle.
The Refco scandal cost many people plenty of money. Remember, they were once fairly reputable and even boasted 33% earnings per year and issued millions of shares of stock while their CEO was committing a huge fraud for which he is now serving time. The Refco bankruptcy has taught everyone involved in trading forex a severe lesson.
Other interesting forex fraud stories:
Forex brokers in finland
Forex Brokers in Finland
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Risk Disclosure: Fusion Media will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible. Currency trading on margin involves high risk, and is not suitable for all investors. Before deciding to trade foreign exchange or any other financial instrument you should carefully consider your investment objectives, level of experience, and risk appetite.
Posted by Linton | Monday, 18 November, 2020 | 6 Comments
Not too long ago, I took a leap of faith and few to Helsinki, Finland from Singapore. I was going to volunteer on an organic farm in Myrskyla, 95 kilometres from the capital Helsinki. Never would I expect such a simple decision to change my life dramatically for the better. Simply put, I had a wonderful time and learnt so many things about life I would have never learnt in Singapore.
WWOOF-ing stands for World Wide Opportunities on Organic Farms. It started out in the 1970s as a lady who wanted to work weekends on an organic farm, and so the name was Working Weekends on Organic Farms. The small organisation gained much popularity over the years, and the name was changed to what it is today.
So anyway, I spent the whole of August 2020 in Finland and volunteering on the farm. In exchange for your services, the farm provides you food and accomodation. The reason why they dont pay you is because it complicates things. You might have to get a work visa, etc. I worked about 6 hours a day during the summer, helping to harvest blueberries and strawberries and basically just helping around the farm.
The farm I stayed on was called METSALAN LUOMUMARJATILA, owned by a lovely couple, Jukka and Verena. Jukka is Finnish, but had his university education in Germany, where he met Verena. They speak fluent German, Finnish, English and un peu Francais. They grow blueberries, American and Finnish (I will show you the American blueberry pictures below, theyre HUGE. typical american style). They also grow strawberries, which are the sweetest I have ever tasted in my life. A supermarket bought strawberry doesnt even come close. They also grow their own vegetables mainly for themselves, and they have a very beautiful herb garden with friendly bees pollinating it every day. They have 20 plus sheep, two donkeys, a dog and two cats. I will let the pictures speak for themselves.
The blueberry section of the farm
Member Since Feb 20, 2020 152 posts Wayne (SunnyDays) Apr 24 2020 at 08:10 (edited Apr 24 2020 at 08:13 )
I have been satisfied with fin fx, especially when it comes to doing manual trades through mt4. I don’t get errors and instant placement in most cases of trades. My atc or fxcm accounts often give me error messages when trying manual trades through mt4.
Its all about the bridge for mt4. atc use ‘avail’ for bridge and fin fx has different bridge (don’t know who?).
Finland is a good country for trading, but in my case being a US resident I am concerned about any overseas placement of my money as i have not tried to withdraw a substantial block of my funds. I think i will be fine however as i can find no negative press on this broker.
Tell Jani i sent ya. ha ha, just kidding.
This entry is reserved for our official review of the FinFX Broker. If you are interested in more information on this forex broker then check out the link or any comments below.
If real user reviews of the Fin FX Broker are what you are looking for, then check the comments below. They are real customer experiences with this product. If there are no comments, then be sure to come back frequently and check for updates as our review and discussion of this product continues to grow.
If you have experience with the FinFX Broker, or know something people might find important please feel free to share in a comment below. It may help someone save or make a lot of money so dont hold back.
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Forex strategies mentor
Have You Ever Heard Of The GANN Trading Method?
GANN (W. D. Gann the legendary Financial Prophet in the Early Twenties) is one of the most famous trading methods used by old school traders. This trading method is based on very complex cycles and theories. Google GANN numbers, or the GANN trading method for a deep dive. Now lets look at some basic patterns. Some basics: In numerology you want to find the number vibration by adding up the digits to bring it down to a single digit. For example if you have the number 2417 you. Continue reading
Trading With WATL An MT4 Trend Line Indicator
Vast majority of traders forget about importance of trendline nowadays. They keep searching for a Holy Grail in Forex robots and expert advisors, usually ending up dealing with a no-win situation. If you are a professional trader I believe you will get my point straight away. Trendlines are unavoidable component of each technical analysis. Therefore, it is quite tricky to avoid using them. Good performance of all the tools is conditioned with correct utility and it is not. Continue reading
How To Draw Fibonacci Retracement And Extension Levels
There are tens of Fibonacci indicator utility methods to trade at the stock market with. This post is not up and down the Fibonacci, but about the genuine, core, original method Fibonacci levels are drawn after. Number of traders does not know how to correctly use Fibonacci tool as they can’t make difference between Fibonacci retracement and Fibonacci extensions levels. Not nice to hear as this method is found in the very foundations of technical analysis itself. How To. Continue reading
Leonardo Fibonacci Italian Mathematician
As a great fan of technical analysis, I use Fibonacci indicators a lot. Even if you are a Forex beginner, you must have heard of Fibonacci by now. Let me introduce you to creator of Fibonacci numbers. Leonardo Pisano Bigollo, planetary popular as Fibonacci, lived between c. 1170 – c. 1250. Born in Italy, Fibonacci is one of the greatest mathematicians in history of human kind. Many agree about the fact he is the most talented western mathematician of the Middle Ages. How. Continue reading
The Custom KorDynamicFibonacci Indicator
In case you are familiar with Fibonacci trading method, and you fancy technical analysis at the same time, than you’ll love this indicator as well. I warmly suggest this one to the beginners due to its simplicity and automated drawing of Fibonacci levels. Thanks to Leonardo Fibonacci we get great trading tool. Beginners normally have quite heavy troubles with Fibonacci indicators (tool) embedded within their platform. Standard Fibonacci indicator, that comes as default on. Continue reading
Pakistan forex rates
The following text is courtesy of Wikipedia (the free online encyclopaedia)
The foreign exchange market ( forex . FX . or currency market ) is a global, worldwide-decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies.
The foreign exchange market assists international trade and investment, by enabling currency conversion. For example, it permits a business in the United States to import goods from the United Kingdom and paypound sterling. even though its income is in United States dollars. It also supports direct speculation in the value of currencies, and the carry trade. speculation on the change in interest rates in two currencies. 
In a typical foreign exchange transaction, a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market began forming during the 1970s after three decades of government restrictions on foreign exchange transactions (the Bretton Woods system of monetary management established the rules for commercial and financial relations among the world’s major industrial states after World War II), when countries gradually switched to floating exchange rates from the previous exchange rate regime. which remained fixed as per the Bretton Woods system .
The foreign exchange market is unique because of
its huge trading volume representing the largest asset class in the world leading to high liquidity ; its geographical dispersion; its continuous operation: 24 hours a day except weekends, i. e. trading from 20:15 GMT on Sunday until 22:00 GMT Friday; the variety of factors that affect exchange rates ; the low margins of relative profit compared with other markets of fixed income; and the use of leverage to enhance profit and loss margins and with respect to account size.
7winning strategies for trading forex download
7 winning strategies for trading forex pdf download
Published April 22, 2020 by . Filed under Uncategorized . Total of no comments in the discussion.
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Free live demo trading-practice account for indian stocks nse
Free Live Demo Trading Practice Account for Indian Stocks NSE/BSE
Free Live Demo Trading Practice Account for Indian Stocks NSE/BSE
Free Live Virtual Stock Trading Platform for Indian Stocks NSE/BSE
MetaBull is offering a Live Tick by Tick Demo trading platform and Practice Account for Indian Stocks for the first time.
They give a Rs. 100,000 limit for delivery and Rs. 10,00,000 (ten lacs) for intraday trading, which you have to close at 3.15 pm
For giving a real feel, the brokerage is charged as per market value, so that you can have the same feel of being trading live on the markets.
It’s a Beta Release with few bugs, but it’s pretty exciting as it’s live and very intuitive.
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this platform will train you for the real markets.
all the best and happy trading to all you guys.
Online trading academy-s ron de appolonia to host an-understanding the markets-workshop in cal
General Manager of Online Trading Canada Academy will be hosting a workshop in Calgary, Canada on January 17, 2020 and January 18, 2020
The World’s Most Trusted Name in Professional Trader Education
Online Trading Academy is centered on trading education
Calgary, Canada (PRWEB) January 09, 2020
Online Training Academy Canada, will host a live event to teach Canadians how to understand the financial markets. Ron De Appolonia will be providing two days of free professional trading education on Tuesday, January 17, 2020 and Wednesday, January 18, 2020 from 8:30 am to 4:30 pm. These workshops will take place at the Calgary Telus Convention Centre convention hall at 120 Ninth Avenue SE, Calgary, Alberta, Canada T2G 0P3.
De Appolonia, General Manager of Online Trading Academy Canada. will address the following topics at the workshop:
What does the public do to lose money?
How do the markets work?
What do large institutions do to generate wealth?
What are three things an individual must have to generate return?
How to make “buy and hold” work.
Online Trading Academy is centered on trading education and De Appolonia and has hosted numerous trading workshops for hundreds of active traders each year. His classes have covered a diverse range of topics including assets, stocks. options, currencies and futures. This vast experience in various markets provides a unique insight into the challenges traders face, and the tools available to them especially through his clear understanding of trading methodologies. De Appolonia’s strength is breaking down trading to its essential elements and getting those elements across to his audience in an entertaining approach. This is what gained him features in the Toronto Star. Globe and Mail, Financial Post, CBS National as well as several online articles.
For more information about or to register for this event, please call 1-866-691-8398.
About Online Trading Academy
Online Trading Academy helps their students by revealing the truth about what it takes to become a successful trader or investor. Their core strategy enables traders to identify market turning points, before they happen, with a high degree of accuracy. Students learn under the guidance of experienced professional traders in a hands-on, learn-by-doing classroom setting. In the Professional Trader course, students learn trading skills and then practice trading live, in the classroom, without paying commissions or risking their own capital by using Online Trading Academys money. With over 25,000 graduates, Online Trading Academy offers professional instruction from experienced Wall Street professionals, as well as a wide array of beneficial home study materials to supplement classroom study. Online Trading Academy locations include Phoenix, Irvine, Los Angeles, Concord, San Jose, Denver, Orlando, Tampa, Fort Lauderdale, Atlanta, Chicago, Kansas City, Boston, Baltimore, Detroit, Minneapolis, New York City, Secaucus, Charlotte, Philadelphia, Austin, Dallas, Houston, San Antonio, Seattle, Washington DC, Milwaukee, Dubai, London, Singapore, Mumbai, Vancouver and Toronto. For more information, visit tradingacademy .
Forex brokers that offer binary options
Best Binary Options Brokers 2020
Once youve decided to start trading binary options, the next step is to look for a binary options broker.
Our trading editors at BinaryOptions have announced the top 10 binary options brokers for 2020. Weve rated these brokers based on their account features, customer support, withdrawal times and payout percentages.
Scam Brokers/Brokers That Are NOT Recommended
Choosing The Best Binary Option Brokers
There are several criteria that traders must use to select a suitable binary options broker:
There is the issue of trade types. Some binary options offer all trade types, while others are more restrictive.
There is also the choice of trading instruments. Some brokers have great depth and are able to offer financial assets for trading that cover the forex, commodity, futures and bond markets .
There is also the issue of payouts, trading costs, bonuses, and trading conditions.
All of these factors will ultimately affect the way a trader plays the market, and ultimately, his profitability. The ideal situation is to get a binary options broker that offers several financial assets spread across several markets, offers a reasonable bonus with a good payout approaching 80%, and offers flexible expiration dates without boxing traders into very long expirations. For more information you can also read our article on choosing a binary options broker or watch this video which outlines some tips on how to open an account and deal with a binary options broker:
Keeping this in view, we have tried to use these criteria to draw up what we feel are the best binary options brokers that traders can do business with. The list is not very exhaustive, but we consider this a good place to start. So heres one great binary options broker.
24Option is one of the most unique trading platforms on the market today. They do have an unusual black background, rather than the white one that most other brokers have. This does not take away from the trading experience it offers to online investors. The good news is that this broker is available 24 hours a day, 7 days a week. If you want to learn more about a binary options broker with high outreach in online trading, then please read further.
Most traders we have had contact with said that this is one of the best brokers they have traded with, making it a top choice for 2020. The minimum deposit is $200, allowing all different types of people to begin their trading experiences easily. The black background of the website is objective, but it is quick to get used to. There are not so many options in the header and footer menus, which can be an advantage for traders who want to get straight to the point. There are various other options to click on throughout the website.
You may find the education features very useful to you. There is the Glossary. FAQ, Trader Manual, Binary Options Trading and Asset Index. These features are crucial for traders of all levels who want to get an inside look of what trading binary options and investing on the 24Option trading platform is really like.
If you have a mobile phone, then there is a mobile platform, allowing you to trade binary options on the go. Also, there are regular webinars which you are able to register to. To top this all up, you can easily start trading within minutes on the 24Option trading platform.
The trading platform offered by 24Option is very different from that of its main competitors. There are various different trading options, which you can take a look at yourself. These are the High/low, Touch/No Touch options and Boundary Options.
The High/low is rather simple. All the trader has to do is select high if he believes the option will expire above the purchase price, or below if he believes the binary option will expire below the purchase price at the time of expiry. First pick your favorite asset, then the High/Low direction, amount you want to invest, expiry time and start trading.
The One Touch options are offered by a number of binary options brokers. The trader needs the option to touch a certain price barrier prior to the expiry time. This means a lot of thinking is required to trade these successfully.
Boundary Options are offered by 24Option, where a trader buys a contract on whether or not the price of a specific asset will stay within a specific price boundary, or break out of that price range.
The payouts at 24Option can be as high as 89%, which is a high for the binary options market. This is a factor which has really attracted a lot of traders in recent times. The trading platform does not offer the most assets out there, but enough to give you the choice of trading the best forex, stocks and commodities out there.
What our team can say is that the overall trading experience was a memorable one. It was different from that at other brokers, but equally exciting. We can say that 24Option is one of the best binary options brokers in 2020. You need to visit their website to understand what binary options trading is all about.
Binary Options Trading in 2020
Binary trading in 2020 will only be enjoyable if you are trading with a reputable binary options broker. You also need to choose a broker that suits your trading style best. Read the above binary options brokers reviews carefully before making that crucial trading decision.
Trading strategies high frequency
High Frequency Trading: A Must for Every Portfolio
Mar. 19, 2020 3:35 AM
High frequency trading? Ironic that the best long term returns came from short term strategies. Like most people, my favorite holding period is forever in theory. In reality it is rarely feasible and never optimal when economic volatility, creative destruction, business innovation and global instability are permanent market phenomena. The previous post was on space – people should only invest in good alpha opportunities anywhere. This post is about time – buy and hold and low frequency trading do not diversify enough so investors also need higher frequency strategies in their portfolios. Different holding period alphas reduce total risk.
Best fund manager for this new decade? The chances are that fund is not yet in existence though I have visited some interesting start ups recently. What about the best strategy? That strategy has likely yet to be invented. However some future trends are certain, like the growth of the alpha vendor industry AUM from the currently tiny $2 trillion to at least $10 trillion by 2020. Some $100 billion funds will appear, many not established today. High frequency trading was the best strategy in the 2000s so it will not be the winner again with so many entering the field dragging down aggregate returns. The obscure is now mainstream but the top exponents will thrive, extracting alpha out of the many more high frequency wannabes.
To hedge or not to hedge? That is the question. Exactly ten years ago I presented at a conference on whether institutions should invest in skill-based absolute return strategies. Conversely the key takeaways from some financial gurus speaking were that investors didn’t need hedge funds and likely didn’t even need long only portfolio managers to select securities since cheap index funds were bringing in +20% a year and could be assumed to return +10% in the long term. Fundamental and quantitative analysis were apparently a waste of time as was paying the cost of hedging. Be satisfied with market returns. Asset allocation was risk management!
Higher frequency of investment decisions matters at all levels. We know from failed investment policies that static beta asset allocation is not sufficiently reliable if you have retirement liabilities to fund. What does work is the dynamic triple alpha process of ongoing portfolio structuring, strategy selection and manager due diligence. You would not exist were it not for the triple alpha of nuclear fusion and the chances are your portfolio will not perform over the long term without triple skill fusion. Absolute returns fuse into spendable cash unlike the relative return universe.
Apart from that, the public markets were efficient and so there was no such thing as investment skill; here are some other facts I noted down in March 2000:
the apotheosis of risky buy and hold to its exalted and unjustified status
hedge fund capacity was limited and $1 billion was too large AUM in one fund
high 1 and 20 fees were certain to drop. They are now typically 2 and 20
after a poor 1999, CTAs, global macro, vol arbs and short sellers were finished
long only private equity and real estate were independent of the stock market (!)
short term trading didn’t work and was unnecessary for long term investors (!!)
large cap equities in major markets were always efficiently priced so offered no opportunity for sustained alpha capture, so forget about high frequency trading (?)
Of course all those financial beliefs were ludicrous and skilled high frequency trading went on to be the best returning strategy in the 2000s. Long term performance doesn’t require a long term holding period. Most of the people in high frequency until a few years ago were good, but recently copycat rookies have started crowding into an area where they think they have the expertise to compete successfully. This creates more trading opportunities and capacity for the best players. Contrary to common advice, the more liquid and number of participants in a market the more inefficiently and wrongly priced the securities become. Irrationality does not cancel out so there are more anomalies and mispricings than ever before. Alpha is abundant but the skill to extract it is rare.
The evolution to very short holding periods is the logical progression of Grinhold and Kahn’s Fundamental Law of Active Management equation: IR=IC. TC. SQRT(breadth). Translating the formula, if you have an investment edge then apply it as often and as widely as possible. The transfer coefficient is how efficiently active bets can be implemented and lower trading costs help increase that. Breadth is the number of securities where you can apply your edge. The more skilled bets you can make, the better the information ratio. Ipso facto an active manager delivers the most value to clients by trading as many securities as frequently as their competitive advantage allows, provided they have talent, excellent execution and are unconstrained on longs and shorts and what they are mandated to do. Hire managers to make money for you how they see fit not to give you unhedged exposure to the ups and downs of an asset class.
Despite being considered new, temporal arbitrage has been utilized for centuries. There is nothing modern about exploiting time advantages. Didn’t the Nathan Rothschild credit hedge fund make money out of slower investors in 1814 with early news of the Battle of Waterloo outcome? Munehisa Honma’s managed futures hedge fund back in 1753 constructed a high frequency data transmission and execution platform by stationing village runners as information conduits from where rice was traded to where it was grown. Momentum, mean-reversion and statistical arbitrage have been around a long time and when applied skillfully work on numerous time frames.
Samurai trading: the time between the decision to trade and executing that trade must be minimized. The quicker and better you are at information gathering and analysis then the higher the performance. The edge in high frequency is often slippage minimization and better transaction technology. Bid offer spread capture blurs the line between market makers and market takers. The fractal nature of markets means that the main constraint on capturing opportunities from microstructure and macrostructure were trading costs.
Technical analysis supposedly doesn’t work so people employ semantic arbitrage and refer to it as pattern recognition instead. The seminal studies are correct: publicly disclosed charting methods are useless. However proprietary predictive black box models continue to perform outstandingly as many quantitative hedge funds have demonstrated over the long term.
The move from millisecond latency to measuring execution in microseconds was inevitable but now people are even talking about nanoseconds. Light takes more than one nanosecond to travel from the screen you are now looking at to your eyes. Picoseconds next? At least Planck time and Einstein relativity put a physical floor on how fast trading can ultimately get. With co-location competition, the time arbitrage arms race is reaching its zenith which puts the emphasis on developing better intellectual capital.
There is still plenty of money to be made out of the unskilled in high frequency strategies and capacity is expanding. Very liquid ETFs like SPY. QQQQ, EEM. IWM. UNG. EWJ and XLF already have most of their volume from shorter term strategies. The E-minis and KOSPI futures are probably the best trading vehicles on the planet and being ultra liquid, are, of course, the most wrongly priced, which creates a lot of alpha opportunities for talented traders.
When you buy a security you might hope to hold the stock for decades or the bond to maturity but the reality is that a short term outlook is usually optimal for risk management. Commodities and currencies are fantastic trading vehicles but never for buy and hold. The many gold bulls out there might recollect that GLD and SLV remain mired in a six hundred year old bear market and there are wiser ways of hedging inflation or for difficult times nowadays.
There is a strange idea circulating that short term trading serves no economic purpose. The investors that did allocate to high frequency are today better funded than those that concentrated solely on long term stocks and bonds. Alpha always has superior risk-adjusted returns than beta. Surely added liquidity is good for everyone. Those markets that heavily tax trading or ban short selling have deeper drawdowns and higher volatility than those that do not. Investors gain from lower transaction and slippage costs. The events of 2008 would have been worse were it not for the liquidity provided by automated and systematic traders. If you must make a fire-sale during a crash, the presence of buyers is essential. High turnover of a portfolio isn’t bad and is often essential to control risk.
Whether carbon-based or silicon-based, sapient beings of all kinds can succeed in quantitative short term investing if they work hard enough and spend many years building core expertise in the hard sciences without the luxury of a proper salary. Natural language processing and compressed sensing can help determine the probability of near future moves when you have models to analyze recent historical information and identify order embedded in chaos. Sparsity of data is an occupational hazard in the prediction of financial markets but tick data provides large information sets to detect hidden structure. Hidden to the ridiculous random walk ranters, that is. Low frequency managers need to invest for years before we can be sure it wasn’t luck. The more trades you do, the shorter the track record needs to be to demonstrate skill.
Rightly or wrongly, the world increasingly functions on short term factors. Therefore as an investor you have the choice of fighting the trend or accepting the high frequency attention span of most market participants and mainstream media. We live in a Twitter world where what is hot today is not tomorrow. Stock trading is already a level playing field. Algorithmic execution systems are arbitraged by better algorithms. Flash orders and sniper, guerilla or ninja algorithms are available to anyone prepared to pay the high price of access, hardware and software development costs. This also creates opportunity for long term investors that have the ability to find good securities amid the fluctuations. Make money from the volatility (HFT) or through the volatility (LFT)? Both, but one firm cannot be good at everything which is why broad manager diversification is necessary.
There are very few long term winning securities and price predictability declines sharply with time horizon. Consistently accurate forecasting is extremely difficult but investing with a 5 millisecond outlook has more probability of success than 5 years. Amazingly brilliant are the clairvoyants that know the stock market will definitely be higher in 2040 than today. Wish I also had a time machine that could look ahead that far. Considering the 1910-1940 and 1810-1840 eras I wonder why they are so confident this time around. They obviously know something I don’t.
I have heard it said you need 10,000 hours to get good at something. To get good at investing probably takes 10,000 separate trades or at least the thorough analysis and due diligence of 10,000 investment ideas. As a researcher at Renaissance Technologies recently noted, We try to find these very obscure patterns hidden in a lot of noise. There is also a vast amount of noise in portfolio construction and fund selection but one signal is clear: Strategy diversification with different managers whose holding periods range from femtoseconds to decades. The solution for consistent capital growth already exists and every investor needs high frequency trading strategies in their portfolios.
Forex spot trading vs forex trading with cfds
Forex Spot Trading vs Forex Trading with CFDs
If you are interested in trading on the currency markets, in recent years you have been given a choice of how to do this. You can open a Forex account at a broker, and there are many advertisements and websites encouraging you to do this. But you also have a choice of trading currencies using contracts for difference (CFDs), and there are some subtle differences that may influence which way you choose to go.
First, the similarities. Each type of trading allows you a great deal of leverage on your money. Leverage means that your investment can be less to control and profit from a certain amount of currency, or that you can increase the size of your trade for a given amount of money. Leverage is a double-edged sword, as it means that your losses can also mount up quickly, so when you are enjoying the advantage of leveraged products you must be careful to set limits to avoid the possible downside.
With both Forex CFDs and the normal Forex market there is an enormous amount of leverage available. Whether you get more leverage with CFDs or a Forex broker may depend on your relationship with them, but it may well be 100 to 1. Generally you won’t pay commissions, as the brokers profits come from the spread in price between the buying and selling figures.
The proud boast of the Forex market is that you can make money whether the currency is going up or down. This is true because you can either buy or sell the currency pair, and so take either side of the contract. This is no different when you use CFDs – one of the features of CFDs is that you can take a short position as easily as a long position, and this applies whichever market you’re trading in, whether stocks, commodities, or Forex.
This actually highlights one of the advantages of CFDs. You only need to have one account with a broker to be able to trade in many different markets, including the Forex market. You can choose to trade whatever financial security you think is currently offering the best chance of a profit, and you don’t need to open accounts at different brokers to have this facility.
One of the features offered by many CFD dealers is a guaranteed stop loss. This is something which is not available with conventional trading, and it depends on whether your dealer is a market maker or offers direct market access. If you can trade with a guaranteed stoploss, then this gives you an advantage over the normal stoploss, where the sell order becomes the market order when your stop level is reached. A guaranteed stoploss means that your trade will be liquidated at the price you request.
As you’ll find when you use CFDs, they offer more flexibility in the size of your position than other alternatives and are user friendly. Your contract is simply to gain or lose from the difference in value between the contract price and the market price.
Fx trader resume
FX Trader Resume
Highly motivated and resourceful FX Trader seeking an opportunity in a fast paced corporate environment, where there is a need for a variety of financial duties especially in foreign exchange.
Summary of Qualifications
Deep knowledge of the G10 market
Deep knowledge of foreign exchange
Enthusiasm for markets and trading
Strong sense of motivation
Excellent organizational and time management skills/
FX Trader, January 2007- Present
UBS Financial Services, Stamford, CT
Analyzed and studied the diverse aspects that have considerable effects on the economy and exchange rates.
Executed and performed duties such as buying and selling of diverse foreign exchanges.
Held accounts and learned various reports created on each working day.
Kept and maintained updated of the chief economies around the world.
Executed and performed duties such as communicating over the phone or working on the internet and to travel and spent money to get the currency of the country.
FX Spot Trader, May 2004- December 2006
Interbank FX, Salt Lake City, UT
Established markets in foreign currencies ad foreign exchange products within authorized commitment limits.
Executed and performed trades in accordance with established trading strategies and risk parameters.
Worked on sales and trading strategies with the institutional client base.
Provided technical and product support to more junior staff.
Executed and performed large FX transactions in a timely and professional manner.
Master’s Degree in Financial Management, 2004
Bachelor’s Degree in Financial Management, 2002
Tff financial markets online tradingthe home for serious traders
TFF FINANCIAL MARKETS ONLINE TRADING. THE HOME FOR SERIOUS TRADERS
TFF-ONLINE TRADING provides TFF clients with the opportunity to become successful Independent Traders and achieve that Financial Freedom they have always dreamed about.
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Forex trading using emas,slow stochastic and rsi
Forex Trading Strategy Combining Average Directional Movement Index and EMAs »
Forex trading using EMAs, Slow Stochastic and RSI
This lesson will cover the following
If you have any questions or suggestions you are welcome to join our forum discussion about Forex Trading Using EMAs, Slow Stochastic and RSI .
In this article we will present to you a fairly simple but reliable trading strategy. It includes two exponential moving averages in conjunction with the Relative Strength Index and the Slow Stochastic Oscillator.
We will be using a 15-minute time frame, although this strategy is applicable to any other. We will use a combination of a 5- and a 10-period EMa. The Relative Strength Index uses the default lookback value 14 periods, with its overbought and oversold levels being set at 75 and 25 respectively. The slow stochastic oscillator uses the same overbought and oversold levels 75 and 25, a 14-period trackback setting and Slow K and D periods of 3. To learn more about the Relative Strength Index and the Stochastic Oscillators variations, read the articles Relative Strength Index and Stochastic Oscillator
Entry and exit rules are quite simple and straightforward. You need to enter the market when the 5-period EMA crosses the 10-period EMA, RSI is above the level of 50 and the Stochastics fast and slow lines are heading in the same direction, but are not in the oversold or overbought levels. For example, if the 5-period EMA penetrates the 10-period EMA from below and edges higher, you need to enter long, if RSI is above the level of 50 and the Stochastic lines are headed up but are below the overbought level of 75. Short entry signal is triggered in the opposite scenario.
Once the 5-period EMA crosses back beyond the 10-period EMA and it is confirmed by a close beyond the latter, you need to close your position. You should also exit the trade, if the Relative Strength Index drops below the 50 level. The several conditions which must be met in order to execute a trade render this strategy a good filter for trade entries. However, the small-period EMAs also have a drawback they can get choppy and generate false exit signals. On the screenshot below you can see displayed both successful and failed signals.
As you can see, the first EMA crossover was done at (1) . with the stochastic lines moving downward, while RSI was slightly below 50. The position was exited at the confirmation of the next EMA crossover, at (2) . Entering immediately a long trade was abstained as RSI was still below 50.
The next scenario when all of our strategys conditions were met was at (3) and it is indicative how EMA trading systems can fail during trading ranges. We shorted below the close of bar (3) . which confirmed the EMA downward crossover, but the market reversed almost immediately and stopped us out at the next bullish crossover at (4) . incurring a minor loss. We decide to reverse our position since the stochastic rebounded from the oversold level, while RSI was right at the level of 50, and we exited at the next crossover at (5) . The small gain offset our previous minor loss. At (5) we abstain from entering short because stochastic is already near the oversold area.
Our next entry is at the crossover at (6) . followed by an exit at the crossover at (7) . The last trade is another example of a failed signal during a trading range, more particularly a barbed wire. We entered on the first close below the bearish crossover at (8) . supported by a bearish stochastic and RSI below 50, but the market almost immediately shifted direction and we were forced out at the next crossover at (9) . which was also the point of RSI rising over 50.
If you have any questions or suggestions you are welcome to join our forum discussion about Forex Trading Using EMAs, Slow Stochastic and RSI .
Options 101: Pairs Trading
In today’s column, we’re going to dissect option pairs trading . which allows investors to profit in both up and down markets without committing a significant amount of capital.
Who should tune in? This strategy is best suited for traders who are bullishly or bearishly biased toward a certain stock, but remain nervous about industry – or market-wide shakeups. The investor is hesitant to risk precious capital by purchasing a lone call or put, and wants to hedge his or her bets.
How does it work? First, the pair trader would purchase a call on a stock with the potential to move higher. However, to protect against sector volatility or an unexpected move in the wrong direction, the investor would simultaneously buy a put on a different stock within the same sector. The trader would allocate roughly the same amount of money toward the call and put purchases, with both legs typically managed as a single trade.
What’s in it for me? The best-case scenario is for the underlying stocks to move in the respective directions predicted, placing both the call and put positions in the money. However, the pairs trader can also profit if the returns on the call trade significantly exceed the losses from the put trade, or vice versa. In addition, the investor can guarantee a profit if one of the two options more than doubles in price by expiration.
Aside from the appeal of a better night’s sleep, part of the beauty of this strategy is that traders can make money from significant moves in either direction. Furthermore, compared to a stock owner or the average option player, the pairs trader is less vulnerable to the unexpected, and the hedge helps to reduce the investor’s average loss compared to buying a lone call or put.
What do I have to lose? With most hedging strategies, the “insurance” and peace of mind don’t come free. In pairs trading, the initial premium paid for the two options is (obviously) more than what the trader would pay for buying a single call or put. But, the losses typically tend to be small, since the investor is hedging a directional view.
The worst-case scenario is for both stocks to go against the trader’s initial predictions, making the call and put worthless at expiration. However, the investor’s maximum losses are limited to the initial cash paid to purchase to two options.
Let’s look at an example
Meet Pierre, who thinks the shares of tech titan AAA will rally in the near term. However, since it’s the heart of earnings season, Pierre is worried about a near-term pullback within the sector. Because he’s usually a conservative trader, and due to his industry-wide fears, Pierre is wary of buying the shares of AAA outright, or a lone call on the stock, for that matter.
As such, he opts to initiate a pairs trade. Since he’s bullish on stock AAA – which is currently trading around $50 – he buys an at-the-money September 50 call for $2.50. To hedge this purchase, he singles out stock BBB – a recent laggard in the tech sector – to buy a put. More specifically, with the shares of BBB flirting with the $160 level, Pierre purchases an at-the-money September 160 put on the stock for $5.
His net debit on the play is $7.50 ($2.50 + $5), representing the most he stands to lose, should AAA and BBB both defy his predictions by expiration.
Let’s say Pierre’s forecast for both stocks flops, with the shares of AAA falling to the $40 level, and the shares of BBB rallying to the $200 level by expiration. In this case, both the AAA call and the BBB put would expire worthless, and Pierre would be out the $7.50 paid for the two options.
On the other hand, let’s assume that both stocks backpedal into the red by expiration. The shares of AAA have fallen to the $40 level, rendering the September 50 call worthless. On the other hand, the shares of BBB have trended lower as predicted, falling to the $152 level by expiration. The BBB September 160 put would harbor an intrinsic value of $8. Minus the initial net debit of $7.50, Pierre’s pairs trade still comes out $0.50 ahead.
In other words, though his original forecast for AAA fell short, the profit from BBB’s decline overshadowed the losses from his worthless call. Had Pierre only purchased the AAA call, he would be out $2.50 by now. Had he simply purchased the stock outright when AAA was trading at $50, his portfolio would be down 20% following the decline to $40.
Finally, let’s look at the best-case scenario for Pierre: the shares of AAA skyrocket to the $55 level, and the shares of BBB decline to the $150 level by expiration. The 50-strike call would now be worth $5, while the BBB put would harbor an intrinsic value of $10. Subtracting his initial premium paid for the two options, Pierre stands to make a profit of $7.50 on the trade ([$5 + $10] – $7.50). In other words, he’s doubled his money since implementing the strategy – and all while sleeping soundly at night.
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Forex vs stocks the ultimate showdown
Forex vs Stocks: The Ultimate Showdown
Sorry to disappoint, but theres no showdownits more like a back-alley beat down. Im a Forex trader, whatd you expect? But really, when it comes to Forex vs stocks there isnt a ton of competition.
I digress, stocks still have their place in the world. Heck, I still invest in stocks every month, but when it comes to trading I choose Forex over the stock market every day of the week.
Here are the top 5 reasons why I like Forex over the stock market.
Market Hours and Overlap
Being able to trade the Forex market 24 hours a day and 5 days a week can be a great advantage over the stock market, which is only open 8 hours a day and 5 days a week. The real advantage here is not being able to trade around the clock, but rather having 5 days of trading where there are no opening gaps in the morning. This means you can hold a trade overnight in the Forex market without worrying about a huge gap in the morning, which can and does happen in the stock market.
While the around the clock trading ability of the Forex market can be a major advantage, to the untrained Forex trader it can be an absolute curse. It can easily turn into long nights of staring at your screen watching every tick, biting your nails with anxiety. Trust me, Ive been there!
I developed my forex price action trading course to help traders avoid falling into this all too common trap.
Major Pairs Make Trading Simpler
When it comes to Forex vs stocks and simplicity, theres no comparison. This is because the eight major currency pairs account for the majority of market volume. This is compared to the more than 2,000 listings on the NYSE alone!
This allows traders to focus on fewer trading instruments while still providing plenty of trade setups.
Money Movement: Forex vs. Stock Market
When comparing Forex vs stocks . the volume traded in the Forex market is substantially higher than that of the stock market. This means that under normal circumstances orders are filled with ease and there isnt a large bid-ask spread. Now, unless youre trading Warren Buffets bankroll you arent going to have an issue getting your order filled in terms of market liquidity. However, this does mean that the bid-ask spread will tend to be lower in the Forex market than the stock market. This is critical especially as your position size increases
Being able to get in and out of the Forex market without worry is a huge advantage over the stock market. Take a look at the image above to get a feel for the massive discrepancy in liquidity between the Forex market and stock market.
Yet another disparity between Forex vs stocks where Forex takes the day. The volume in each market is moving to opposite ends of the spectrum. In other words, volume in the Forex market is flourishing while volume in the stock market is slowing. Forex has been growing steadily for the past 15 years, while the stock market has returned to pre-2006 volume.
#5 Profit Potential
Forex vs Stocks
Leverage in the Forex market can turn small moves into large profits, and large losses if you arent careful. This is why having a coach to teach you how to trade price action is critical to your success as a trader. Take a look at the graph below. This shows two $2,500 investments one a stock investment in Tesla Motors, Inc. and the other in AUD/USD utilizing 20:1 leverage.
In the image above, we can see that Tesla rose by 234%, which is extraordinary, while the AUD/USD currency pair changed just 11%. However, due to leverage in the Forex market the profit was the same between the two instruments.
As stated above, the leverage in the Forex market can be a great asset, but only if you know how to use it properly. Far too often I hear about traders abusing leverage which usually leads to losing more money than they bargained for.
#6 Long or Short (Buy or Sell)
Anyone who knows me will tell you that I like to save the best for last. This is by FAR my favorite aspect of trading Forex vs stocks. The ability to make money regardless of which way a particular Forex currency pair is trending is a great asset to the Forex market. What this means is that while you may need 20 stocks to make up a decent watch list, you may only need 10 currency pairs. This is because, due to the fact that Forex currency pairs can be traded long or short, they essentially give you twice as many trade setups as a single stock in the stock market.
While you can go short in some cases in the stock market, youll need to jump through a few hoops with your broker to do so. Going short on a stock is also viewed as unethical by many, since you are essentially hoping that a company under performs. An extreme example of this was the shorting that took place to Lehman Brothers stock in 2008.
When it comes to the Forex market, the debate of whether to go long or short is irrelevant; the only thing that matters is finding the right price action trading strategies to trade.
In closing, when it comes to Forex vs stocks I think Forex beats the stock market hands down. Im obviously a little biased being a Forex trader, but when you compare the advantages over disadvantages I think youll find that Forex wins out. Whether you decide to trade Forex or the stock market, I strongly urge you to find an experienced coach who is actually trading using the strategies he/she teaches.
To your trading success!
Strategies and secrets of high frequency trading(hft)firms
Strategies And Secrets Of High Frequency Trading (HFT) Firms
Secrecy, Strategy and Speed are the terms that best define high frequency trading (HFT) firms and indeed, the financial industry at large as it exists today.
HFT firms are secretive about their ways of operating and keys to success. The important people associated with HFT have shunned limelight and preferred to be lesser known, though that’s changing now.
The firms in the HFT business operate through multiple strategies to trade and make money. The strategies include different forms of arbitrage – index arbitrage, volatility arbitrage, statistical arbitrage and merger arbitrage along with global macro. long/short equity. passive market making, and so on.
HFT rely on the ultra fast speed of computer software, data access (NASDAQ TotalView-ITCH. NYSE OpenBook. etc) to important resources and connectivity with minimal latency (delay).
Let’s explore some more about the types of HFT firms, their strategies to make money, major players and more.
HFT firms generally use private money, private technology and a number of private strategies to generate profits. The high frequency trading firms can be divided broadly into three types.
The most common and biggest form of HFT firm is the independent proprietary firm. Proprietary trading (or “prop trading”) is executed with the firm’s own money and not that of clients. LIkewise, the profits are for the firm and not for external clients.
Some HTF firms are a subsidiary part of a broker-dealer firm. Many of the regular broker-dealer firms have a sub section known as proprietary trading desks, where HFT is done. This section is separated from the business the firm does for its regular, external customers.
Lastly, the HFT firms also operate as hedge funds. Their main focus is to profit from the inefficiencies in pricing across securities and other asset categories using arbitrage.
Prior to the Volcker Rule. many investment banks had segments dedicated to HFT. Post-Volcker, no commercial banks can have proprietary trading desks or any such hedge fund investments. Though all major banks have shut down their HFT shops, a few of these banks are still facing allegations about possible HFT-related malfeasance conducted in the past.
How Do They Make Money?
There are many strategies employed by the propriety traders to make money for their firms; some are quite commonplace, some are more controversial.
These firms trade from both sides i. e. they place orders to buy as well as sell using limit orders that are above the current market place (in the case of selling) and slightly below the current market price (in the case of buying). The difference between the two is the profit they pocket. Thus these firms indulge in “market making ” only to make profits from the difference between the bid-ask spread. These transactions are carried out by high speed computers using algorithms .
Another source of income for HFT firms is that they get paid for providing liquidity by the Electronic Communications Networks (ECNs) and some exchanges. HFT firms play the role of market makers by creating bid-ask spreads, churning mostly low priced, high volume stocks (typical favorites for HFT) many times in a single day. These firms hedge the risk by squaring off the trade and creating a new one. (See: Top Stocks High-Frequency Traders (HFTs) Pick )
Another way these firms make money is by looking for price discrepancies between securities on different exchanges or asset classes. This strategy is called statistical arbitrage , wherein a proprietary trader is on the lookout for temporary inconsistencies in prices across different exchanges. With the help of ultra fast transactions, they capitalize on these minor fluctuations which many don’t even get to notice.
HFT firms also make money by indulging in momentum ignition. The firm might aim to cause a spike in the price of a stock by using a series of trades with the motive of attracting other algorithm traders to also trade that stock. The instigator of the whole process knows that after the somewhat “artificially created” rapid price movement, the price reverts to normal and thus the trader profits by taking a position early on and eventually trading out before it fizzles out. (Related Reading: How The Retail Investor Profits From High Frequency Trading )
The firms engaged in HFT often face risks related to software anomaly, dynamic market conditions, as well as regulations and compliance. One of the glaring instances was a fiasco that took place on August 1, 2020 which brought Knight Capital Group close to bankruptcy–It lost $400 million in less than an hour after markets opened that day. The “trading glitch,” caused by an algorithm malfunction, led to erratic trade and bad orders across 150 different stocks. The company was eventually bailed out. These companies have to work on their risk management since they are expected to ensure a lot of regulatory compliance as well as tackle operational and technological challenges.
The Bottom Line
The firms operating in the HFT industry have earned a bad name for themselves because of their secretive ways of doing things. However, these firms are slowly shedding this image and coming out in the open. The high frequency trading has spread in all prominent markets and is a big part of it. According to sources, these firms make up just about 2% of the trading firms in the U. S. but account for around 70% of the trading volume. The HFT firms have many challenges ahead, as time and again their strategies have been questioned and there are many proposals which could impact their business going forward.
Algo trading with python
Algo Trading with python
One of the practical goals in my education plan is:
Develop programming skills that will aid in my trading
I believe trading to be more art then science. Still back testing rule based strategies is necessary, but it is a lot of work if you do this manually. And that’s where programming comes in handy. Also monitoring markets and signal creation is something that I would want to automate.
So last Friday I registered for Jev Kuznetsov’s Trading with python course. I have been keeping an eye on Jev’s blog for some time know, as he seems to be doing exactly what I intend to be doing. And that is: back testing trading strategies algorithmically using python. Be sure to check out his blog if you are interested. You can register for his course here. In below video Jev explains what the course is about.
In the course Jev will be using a book that was already on my wish list:
So I have gone ahead and bought the ebook version of the book. Googling for the author Wes McKinney, I came across this blog post:
And from there I found out about Quantopian. a community driven online algorithmic trading platform. Check out below video to learn more.
Quantopian uses the Zipline python library for back testing. The library is available from github: github/quantopian/zipline
I installed zipline and made an account on Quantopian. So now I can start playing around with some algos on my machine and in the browser. Quantiopian seems to be a great place for quickly testing new ideas and for practicing. In the future they will also be offering the ability to paper trade and to trade live on selected brokers right from their platform.
Then finally I watched this presentation: Intro to algorithmic trading models by Prof. Ahmed Namini. Below video and slides go hand in hand. I embedded them both below so it is easy to watch the presentation.
If you found this post helpful, please be sure to share.
Forex-libor-swaps-the recent banking scandals explained
Forex – LIBOR – Swaps – the recent banking scandals explained
The highest fines ever have just been imposed on banks by regulators in the US and UK for dishonest manipulation of the foreign exchange index. This Forex scandal comes hot on the heels of the LIBOR scandal and interest rate hedging product misselling.
The Financial Conduct Authority (FCA) has imposed a financial penalty of ?284,432,000 on Barclays for failing to control business practices in its foreign exchange business in London. This is the largest financial penalty ever imposed by UK regulators. At the same time US regulators have fined Barclays $2.3bn, by far the largest fine imposed, because it did not settle with regulators last year. It is also reported that Barclays has admitted criminal charges relating to Forex manipulation.
” Put simply, Barclays employees helped rig the foreign exchange market, ” said Ben Lawsky, New York’s superintendent of Financial Services. ” They engaged in a brazen ‘heads I win, tails you lose’ scheme to rip off their clients. “
Essentially the banks colluded to share confidential information to fix benchmark foreign exchange rates.
As described in somewhat more neutral tones by the UK regulator, the FCA:
“ This involved traders attempting to manipulate the relevant currency rate in the market, for example, to ensure that the rate at which the bank had agreed to sell a particular currency to its clients was higher than the average rate at which it had bought that currency in the market to ensure a profit for Barclays.
Barclays’ control failings also meant that traders had the opportunity to benefit Barclays’ trading positions in FX options by attempting to manipulate fix or spot FX market rates to prevent Barclays’ clients from receiving pay-outs from the options they had purchased from Barclays. ”
In this way the banks could arrange trades before the FX rate became fixed to ensure that those foreign currency transactions were profitable for the bank – to the detriment of their customers.
It is a scheme with strong similarities to the LIBOR rigging scandal.
In this, banks colluded to fix the London Inter-Bank Offered Rate of interest, and then arranged trades either side of the LIBOR rate, always to ensure that when the rate moved (whether up or down) their interest rate swap trades were profitable. This scandal affected many parties with loans pegged to LIBOR, across the entire lending sector, even extending to mortgage borrowers. The rate of interest paid was being falsely manipulated for the banks’ own profits, yet because the LIBOR was rigged as much to bring it down as to raise it (any movement would do for the banks to make a turn) it can be difficult to show clear losses from that manipulation. Borrowers in some circumstances may, perversely, have benefitted from rate dips as much as lost out from hikes.
Interest rate hedge misselling scandal
Forex has fewer similarities with the interest rate hedge misselling scandal. Here the banks sold complex derivative products to all sorts of businesses, large and small; any business with a commercial loan. These were parties who did not know what a derivative was, but these ‘hedges’, designed to protect against interest rate swings, left borrowers stranded paying interest rates up to 5-8% when the Bank of England base rate fell to 0.5%. With no realistic ability to exit the swap/hedge, harm in these cases is clear to show. The FCA imposed a scheme of redress covering smaller businesses. The irony that we have identified, though, through the work we have done in this arena is that the businesses most badly affected by these products have disappeared into insolvency. In these cases there is no entity left to benefit from the FCA scheme or pursue damages.
As to redress, with Forex, court action is underway in the US. Large pension funds issued claims against the banks in late 2020. It seems that there is likelihood of showing relevant duties of care and/or contractual breaches and loss in England too. Whilst it is expected that most claimants will be hedge funds and pension funds who had large sums invested in foreign currencies and were thus vulnerable to dishonest manipulation, there may also be corporates who had significant investments in foreign currency or who dealt in currency to manage exposure to currency fluctuations. They may also have suffered loss and the clear admissions of guilt by the banks may be the trigger that these parties have been waiting for.
With interest rate swaps and LIBOR compensation there was a test case, Graiseley, but that settled in April 2020. This settlement will have frustrated many claimants who, too large to fall within the FCA redress scheme, were keen for a precedent to be set by that case for them to follow.
With these latest fines and, crucially, admissions we expect a rush to review all relevant transactions and a renewed vigour in the pursuit of redress across all forms of bank misbehaviour. Limitation needs to be considered and advice must be sought at the earliest opportunity.
About the author
Hacking, cybercrime and fraud in property transactions – can you recover from your solicitor?
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BIGBEN INTERACTIVE : Marked increase of 2020/19 interim result
26 November 2020, 18:00
Marked increase of 2020/19 interim result Current operating profit: + 45.4% (8.7 M€ i.e. 8.2% of Sales) Net profit: +45.6% (6.2 M€ i.e. 5.8% of Sales)
BIGBEN INTERACTIVE (ISIN FR0000074072) today releases its audited consolidated interim results for the financial year closing on 31 March 2020 as approved by its Board of directors on 26 November 2020.
|Consolidated highlights in M€ ( IFRS)||09/2020||09/2020||Change|
In % of sales
|Current operating result
In %of sales
In % of sales
Of which currency gain (loss)
|Earnings before tax
In % of sales
|Result for the period
In % of sales
Growth from high value products.
Over the whole first half of 2020/19 (from 1 April to 30 September 2020), consolidated sales of the Bigben group amounted to 106.0 M€, a decrease of 3.7% compared with the first half of the previous fiscal year.
This contrasting activity is explained on the one hand by the development of both the high potential trade represented by video game Publishing and innovative products for premium brands of the group and on the other hand by the downward trend of the classical products of the “Mobile” or “Audio” business segments.
Gaming sales grew by 27.5% to 47.5 M€ in this context while Mobile sales decreased by 17.7% to 48.0 M€ and Audio sales by 27.7% to 10.5 M€.
Further improvement of operational indicators
In the first half of 2020/19, the Bigben group showed a clear increase in operating performance thanks to a better mix of products and a proactive cost control policy.
EBITDA amounted to 19.5 M€ i.e.an increase of 60.9% compared to the first half of 2020/18.
The EBITDA rate thus represented 18.4% of sales, an increase of 7.4 points. This performance was made possible by a strong increase of the gross margin in the Publishing segment, a more favourable product mix in the other segments and a relative decrease in operating expenses.
Result for the period amounted to 6.1 M€ in the first half of 2020/19 (5.8% of sales) up 45.6%, after including a financial result with a 0.8 M€ surplus (compared to a 1.4 M€ deficit attributable to net foreign exchange losses in the previous fiscal year) and tax expenses of 2.6 M€.
Strong balance sheet structure
As at 30 September 2020, Bigben’s balance sheet shows shareholders’ funds of 149.2 M€ compared to 130.3 M€ as at 30 September 2020, a 18.9 M€ increase mainly resulting from the increase in capital related to the acquisition of Cyanide for 10 M€ and from the profit generated over of the last twelve months.
Net indebtedness of € 36.3 M€ amounts to 24.4% of shareholders’ funds, to be compared to 12.4% on 30 September 2020. This 20.2 M€ increase is mainly due to the new loans received during the period under review in order to fund the latest acquisitions and the development costs of the new games.
Strategy and Outlook:
The Group has set the goals of its “BIGBEN 2022” plan for the next 3 years:
-Gaming Segment: “Full Gaming experience“
· Capitalizing on the latest acquisitions allowing the Group to become an important developer/publisher in the AA market and to follow the business model already chosen by AAA players 10 years ago.
· Developing in-house 50 to 60% of Bigben future games thanks to the talents of the current 285 employees and those who will join them.
· Using all distribution channels, physical and especially digital.
· Leveraging strategic partnerships already concluded and coming up with first-line players for Gaming accessories.
-Mobile Segment: ” Accessory as a service”
· Consolidating and developing our premium brands.
· Accelerating internationalization as one growth vehicle.
· Acquiring customers and developing their loyalty by offering a wide range of revenue generating services.
-Audio Segment: ” Innovation for all”:
· Valuing innovation and differentiation for a wide audience.
The Group thus anticipates 350 M€ sales as at 31 March 2022 and targets a current operating margin of 12%.
For the remainder of the current fiscal year, Bigben will continue its strategy of converting to the developer/publisher business while further strengthening its market share for the proprietary brands related to other businesses.
In this context, the Group is confident about its prospects and specifies its 2020/19 annual targets as follows:
· Sales between 240 M€ and 255 M€
· Current operating margin between 8.7% and 9.0%
3 rd quarter sales 2020/ 2020: Monday 21 January 2020
Press release after close of the stock market
ABOUT BIGBEN INTERACTIVE
over 600 employees
12 subsidiaries and a distribution network in 100 countries
Bigben Interactive is a European player in video game development and publishing, in design and distribution of smartphone and gaming accessories as well as in audio products. The Group, which is recognized for its capacities in terms of innovation and creativity, intends to become one of Europe’s leaders in each of its business segments.
Company listed on Euronext Paris, compartment B – Index : CAC SMALL – Eligible SRD long
ISN : FR0000074072 ; Reuters : BIGPA ; Bloomberg : BIGFP
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